Irish Examiner view: €65bn could help future-proof Ireland

Spending on age-related matters could be a prudent target for Ireland's budget surplus

Finance Minister Michael McGrath is bringing a note to Cabinet about Ireland's significant budget surplus. File picture: Damien Storan

The ghosts of ministers for finance long gone must surely be stirring these days as they contemplate the choices facing the incumbent, Michael McGrath.

The approach of those in charge of State spending has always been dictated by the nation’s coffers, which have rarely been overflowing.

However, McGrath now finds himself in just such a situation, with Ireland set to enjoy significant budget surpluses amounting to some €65bn between now and 2025 due to corporation tax receipts. Accordingly, the Cabinet is to discuss a paper from the minister outlining where that surplus might best be spent.

Some of those options have already been aired, ranging from the allocation of funds for debt reduction to investing in capital budgets for infrastructural projects, and on from those to the establishment of a new sovereign wealth fund.

Clearly these revenues should be used in a way that benefits the State’s citizens to maximum effect, but what is the best option?

It was interesting, for instance, to read the comments of the minister himself when housing was mentioned as an obvious focus for funding — he pointed out that funding was less of a challenge in this area than issues of planning, labour, and materials.

One particular sector in which the minister has expressed an interest in the past is age-related spending, and with good reason.

His own departmental officials have estimated that, by the end of this decade, spending on age-related matters will be €7bn to €8bn higher per annum than it was in 2020; there is no guarantee that corporate tax receipts will be as high then as they are now, so it would be no surprise to see the minister invest in future-proofing measures here.

It would be a prudent move if he did so, and one that all his predecessors in the hot seat would surely approve of.