Cabinet to hear suggestions for €65bn corporation tax surplus

The paper, to be laid out by Finance Minister Michael McGrath, is expected to set out a number of possible strategies, including the establishment of a long-term focused national reserve fund. File picture: Damien Storan.

Ireland could use windfall corporation tax to set up a State investment fund.

A paper to be discussed by ministers on Tuesday will give a number of options for how to handle the budget surpluses expected to be run in the coming years due to hyper-normal corporation tax receipts. 

According to the recently published Stability Programme Update, Ireland is set to have significant budget surpluses amounting to some €65bn between now and 2025.

The paper, to be laid out by Finance Minister Michael McGrath, is expected to set out a number of possible strategies, including the establishment of a long-term focused national reserve fund.

It is envisaged this would pursue a diversified investment strategy aimed at generating a positive long-term return, drawing on the experience of similar funds which have been set up internationally in Norway, Australia, and Japan. 

The existing national reserve fund currently has €6bn invested in low-risk Government bonds.

It is understood the paper also explores the options of paying down the national debt and a targeted increase in infrastructure expenditure, in addition to the existing capital budget. The paper is not expected to make a recommendation at this stage as to how to allocate the expected surpluses, which is likely to be the subject of intense discussion at Government level.

Other Cabinet business

Elsewhere at Cabinet, Enterprise Minister Simon Coveney will seek government approval to draft a national industrial strategy for offshore wind.

Children's Minister Roderic O'Gorman is due to update his Cabinet colleagues on measures being taken to address the accommodation needs of those arriving here. He will bring an expenditure update memo to Cabinet which outlines the cost associated with supporting those arriving here from Ukraine and other countries as well as the transfer of disability funds to his Department from the Department of Health. 

Tuesday's update will show that the Department of Children has spent €266m on supports for those fleeing the war in Ukraine in the first three months of this year. A further €144m was spent on supporting international protection applicants up to the end of March.

Meanwhile, Tánaiste Micheál Martin and Justice Minister Simon Harris will ask Cabinet to note their intention for Ireland to take part in an upcoming diplomatic conference in Slovenia.

The conference will negotiate the adoption of a new multilateral convention on international cooperation when it comes to the investigation and prosecution of international crimes, such as genocide, war crimes, and crimes against humanity. The objective of the draft convention is to strengthen the fight against impunity for such crimes.