Micheál Martin: Corporation tax receipts 'may not be there forever' 

Taoiseach notes 'concern' at an over-reliance on a single revenue stream

Taoiseach Micheál Martin: 'I notice from the opposition every single proposal is how we spend more money. I think I would ask the entire Oireachtas and society to reflect on that.' File picture: PA 

Taoiseach Micheál Martin has expressed concern about Ireland’s over-reliance on corporation tax and has cautioned against “every single” opposition proposal calling for increased spending.

Mr Martin added that the Government is balancing its “over-dependence” on corporation tax by investing at an unprecedented level in infrastructure.

The Taoiseach was speaking to reporters in Kinsale on Friday at the sod-turning of a five-storey expansion of the local community school.

With corporation tax takes up by a third to €2.8bn last month when compared to August of last year, Mr Martin conceded that there was “a concern” at an over-reliance on a single revenue stream.

“We have to be very mindful of the fact that quite a significant amount of that may be windfall, may be once-off, and may not be there forever,” he said.

“Parallel with that, public expenditure has grown very significantly since 2020, particularly with the onset of covid and the unprecedented subventions that we made, so it’s on a higher plateau now than it would have been prior to that era.” 

He added that it was important to note that Government has put funding aside, in the form of the Future Ireland Fund, to prepare for future costs relating to an ageing population.

“To balance the fact that we are over-dependent on corporation tax revenues, we are using it for the productive capacity of the economy, we’re investing in an unprecedented way in infrastructure, which is necessary for the future of the economy and the future of society,” he said.

“For example, the Metro is key, and the Cork Commuter Rail project is another example of infrastructure projects that will have a transformative impact on climate, decarbonisation, and in terms of a growing population.” 

Asked about calls by Sinn Féin for a “meaningful” cost of living package in the budget, Mr Martin said that parallel with the increase in revenue, public expenditure had also increased, and in some areas, this was above budgetary targets that had been set for individual departments.

“I notice from the opposition every single proposal is how we spend more money. I think I would ask the entire Oireachtas and society to reflect on that,” he said.

“We need value for money, we need to make sure that where we are spending money that there are outcomes. I would put down that marker also.” 

Budget and cost of living

Mr Martin said Budget 2027 would contain an income tax reduction package which will help workers to deal with the increased prices.

“We are also looking at the childcare area to reduce the cost of childcare for families in particular.

“We are looking at the whole area of disability costs and other measures to reduce the pressures on families arising from the cost of living. That will be the target of the budget and that is what we are going to try to do.” 

Asked whether the October 6 budget will contain supports around heating costs for households, Mr Martin said the issue had to be looked at in terms of the budget generally.

“There can’t be any one specific item taken in isolation. The budget in the round will be about easing pressure on families,” he said.

“We will be looking at the wider energy situation. It’s because of the war in Iran and the earlier outbreak of war in Ukraine some years ago, the energy markets have been very volatile. The fundamental way we have to go is decarbonisation and renewables and there’s a time lag in between both.”