Ireland has a “once in a generation opportunity to make the nation’s finances safer," according to the Minister for Finance.
With a huge public finance surplus, the Irish government's Cabinet has been meeting to prioritize its options with debt reduction, the establishment of a new sovereign wealth fund, and targeted spending projects on the table.
The surplus is mainly due to record levels of corporation tax that are expected to be collected.
According to the government’s own economic forecasts the surplus will be €16.2 billion this year and it is predicted that it could reach €65 billion by 2025.
Minister for Finance Michael McGrath said the position the government found itself in was “a wonderful opportunity."
He added: “I think we do need to use these resources now. To make provision for the future, for future paths that we know are coming your way and also to reduce the debt, which makes the country’s finances more sustainable."
However, Taoiseach Leo Varadkar cautioned: “We have an aging population and a growing population. While we might be in surplus now, that’s not going to be the case forever. And it’s better to plan ahead than find the future Government facing difficult decisions when the economy turns, as it will inevitably.”
One of the challenges facing the country is the cost of housing refugees, Varadkar admitted.
“But the biggest difficulty we’ve had in recent weeks and months is just being able to find more accommodation because we have a rising population and then roughly 100,000 refugees and asylum seekers who have come here.”
The financial surplus in the Republic is in stark contrast to the dire economic situation across the border where a British government “punishment budget” has seen cuts across all departments, except health, and strike action across the public sector.
Alliance leader Naomi Long said the budget will “decimate public services."
“And to be really clear, some of the changes that are being made, some of the cuts that are being imposed, are cuts that will not be able to be redressed in weeks or months if an Assembly is restored, which is why it’s critical that we have an Assembly now.”
