James O'Connor (Cork East, Fianna Fail)
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71. To ask the Minister for Finance if he will provide this Deputy an update on the expected budget surplus in 2023 to 2024; and if he will make a statement on the matter. [21547/23]

Michael McGrath (Cork South Central, Fianna Fail)
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Economic and budgetary forecasts covering the period 2023-2026 were set out in the Stability Programme Update which was published and submitted to the European Commission and Council last month.

For this year, my Department is forecasting a general government surplus of €10 billion, the equivalent of 3½ per cent of modified gross national income.

For next year, the general government surplus is expected to increase to €16.2 billion, 5.4 per cent of modified gross national income.

The headline surpluses in prospect for this year and next are largely the result of ‘windfall’ corporate tax receipts, in other words receipts that cannot be explained by underlying economic conditions. These windfall receipts are highly concentrated among a small number of multinational firms, and cannot be relied upon to continue indefinitely.

Windfalls are estimated at almost €12 billion this year, meaning an underlying deficit of €1.8 billion for this year. This is a better metric for assessing the resilience of our public finances.

The Government has repeatedly warned that it would be inappropriate to build up permanent fiscal commitments on the basis of transitory, windfall revenues. Accordingly it is my intention to establish a longer-term savings fund, capitalised by these windfall receipts. The fund will be used inter alia to partly finance the budgetary costs associated with an ageing population.