Jim O'Callaghan (Dublin Bay South, Fianna Fail)
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190. To ask the Minister for Finance the action taken to ensure sustainable public finances since July 2020; and if he will make a statement on the matter. [29315/24]

Jack Chambers (Dublin West, Fianna Fail)
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Reflecting both the wider economic recovery and the success of Government fiscal policy, our public finances have rebounded strongly despite facing a number of unprecedented challenges, including Brexit, a global pandemic and the energy price shock. The steady growth in income tax and VAT revenues have been a clear indicator of the fundamental resilience of our economy.

However, as Government has repeatedly warned, the headline fiscal position remains exposed to volatile corporation tax receipts. The strong performance of this revenue stream has increased the risk of relying on ‘windfall’ revenues, i.e. receipts not linked to the domestic economy, to fund permanent expenditure commitments.

The inherent volatility of this highly concentrated tax base has been apparent over the last number of months, with volatile year-on-year swings, in both directions, seen in several key payment months.

Government has taken steps to address the risks around ‘windfall’ corporation tax revenues. The establishment of two new long-term investment vehicles, the Future Ireland Fund and the Infrastructure, Climate and Nature Fund, will enable Government to invest windfall receipts to help prepare for future fiscal challenges while, at the same time, helping to ensure that they are not used to funding permanent spending.

Ultimately, of course, the best way to ensure the sustainability of the public finances is to maintain a sensible and balanced budgetary strategy.