€4 billion transferred to National Reserve Fund
€4 billion has been transferred into the National Reserve Fun by the exchequer.
It follows a decision in the budget in September to bolster the State’s reserves.
“On Budget day, the Government committed to putting aside additional resources, from excess corporation tax receipts to prepare the public finances for future challenges,” said the Minister for Finance, Michael McGrath.
“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.”
The move follows the transfer of €2 billion last year and brings to €6 billion the total amount of cash now sitting in the so-called rainy day fund.
€1.5 billion was used from the pile in October of 2020 in order to help cover the cost to the State of dealing with the fallout from the pandemic.
It wasn’t necessary to draw from it last year to cover the cost of the cost of living measures, because the exchequer’s finances were in such a healthy situation.
“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,” the minister added.
“Recent history has taught us that we must also be prepared for unforeseen challenges, which are becoming more frequent and increasingly impactful.”
The fund was set up in 2019 with the first tranche of €1.5 billion coming from the Ireland Strategic Investment Fund that year.
Under legislation, the minister is required to put in at least €500m a year into the fund, but more can be lodged subject to Dail approval.
However, between 2019 and 2021 a proposal was brought before the Dail to not make the €500m payments.
In addition to the €500m for this year, the Dail approved a further €3.5 billion for the fund in the budget.