Corporation tax payment: Wise decision to divert funds

It is barely a week since Finance Minister Paschal Donohoe was forced to defend his budget for 2019 in the face of trenchant criticism from the Irish Fiscal Advisory Council.

In its strongest rebuke yet to any finance minister, the council described spending increases announced in the budget as not prudent economic management.

It criticised the minister for allocating possible one-off corporation tax receipts to plug a €700m gross spending overrun in healthcare this year.

Mr Donohoe insisted his budget was prudent, but, at the same time, he promised to take on board the advice of the council.

It looks like this is one political promise that is being kept as Mr Donohoe has said that a surge in corporation tax payments last month will go reducing our national debt.

Exchequer returns for November show corporation tax receipts brought in almost €500m more than anticipated. But while the economy is booming, we cannot ignore the fact that we have a national debt in excess of €200bn, which costs in the region of €500m a year to service.

It would have been tempting for the minister to use that extra bounty to address ongoing social needs during what many political pundits believe will be an election year.

The fact that he has chosen instead to reduce Ireland’s overall indebtedness is a welcome sign of wise and cautious judgment on his part.