State must learn lessons of ‘boom-bust approach’ to public investment, McGrath tells Dáil

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Dail-Eireann News

Michael-Mcgrath,Pearse-Doherty

Dáil passes legislation to create two new funds to deal with future spending pressures and potential economic shocks

An annual €2 billion will be invested from 2024 to 2030 in a new Infrastructure, Climate and Nature fund. Illustration: Paul Scott

Under the Bill a new sovereign wealth fund, the Future Ireland Fund, will be created with 0.8 per cent of gross domestic product generated from corporation tax receipts invested annually, starting this year, to support State spending from 2041 onwards. He added that “an alarm bell is ringing and we must take heed of it and take on board all of the expert advice that we are getting in that respect”.

“It is the last thing a government should do. When the economy is weak we should invest through the economic cycle, lean against the wind, invest in housing, transport and all of the infrastructure we need. That is what the second fund does.” The Donegal TD said the State is projected to run an Exchequer deficit in 2026 and 2027. “Under this legislation, the State would, while running a deficit, transfer €4.3 billion into the fund in 2026 and €4.5 billion in 2027.

 

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