Today’s transfer is the consequence of the Dáil’s approval of a motion brought by the Minister for Finance on Budget night, Tuesday, 27 September 2022.
The approach of capitalising the reserve fund is endorsed by the Department of Finance in its analysis entitled “De-Risking the Public Finances – Assessing Corporation Tax Receipts” published in September 2022. It is also supported by IFAC and all other institutions that provide economic advice to Government.
Today’s transfer means that €6 billion has now been transferred to the NRF. The decision to replenish and further bolster the Fund following the withdrawal of €1.5bn from it in October 2020 towards the Government’s pandemic response, improves the resilience of the public finances and allows the State to deal with future crises.
Commenting on the transfer, Minister McGrath said:
“On Budget day, the Government committed to putting aside additional resources, from excess corporation tax receipts to prepare the public finances for future challenges. This commitment was made while also providing over €11 billion in economic support to households and businesses in Budget 2023 to help individuals, families and businesses deal with the rising cost of living.
While we have acted to deal with this immediate challenge, there are future costs which we must be prepared for including the consequences of an ageing population, the digital transition and climate change. Recent history has taught us that we must also be prepared for unforeseen challenges, which are becoming more frequent and increasingly impactful.
The transfer of €4 billion to the National Reserve Fund today is an important step in that preparation. Today’s transfer comes after the €2 billion transfer made in 2022 and brings total transfers to the Fund since Budget night 2022 to €6 billion. This means that the NRF will have a strengthened position to respond to the type of unforeseen challenges that the Fund was established to deal with in 2019.”
