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Updated 3pm
FINANCE MINISTER PASCHAL Donohoe has defended the establishment of a ‘rainy day’ fund which aims to give Ireland some financial cushion against future economic shocks.
First mooted in 2016 the Government announced today that it approved drafting of a bill to set up the fund.
Minister Donohoe said money will start going into the fund next year.
The initial deposit will be €500 million next year. Further annual contributions 500 million will be added to the pot in 2020 and 2021. These amounts are on top of the €1.5 billion in seed funding which has already been committed to.
It will be managed by the National Treasury Management Agency (NTMA).
The monies will be diverted from the Ireland Strategic Investment Fund (ISIF), which was set up to support economic activity.
Donohoe defended this monetary reassignment saying that later this year he expects there will be more people working in Ireland than ever before and tax revenue will reach record levels.
“With those kind of developments we need to plan for how we can look after living standards, retain jobs and invest in the future in our public services,” he said.
The quantity of money that we had in the ISIF has helped get our economy to a point of nearly full employment and, with that in mind, it’s appropriate to look at how we can use that funding in a new and better way.
Donohoe has said that the medium-term plan is to get the fund up to approximately €8 billion.
Minister Paschal Donohoe says the irony isn’t lost on him that he’s announcing the rainy day fund on this sunny afternoon.
— TheJournal Politics (@TJ_Politics) May 23, 2018
He says there will be triple lock mechanism for withdrawing from the fund pic.twitter.com/0pLm0UeYYR
He said the fund will go towards protecting Ireland’s economy from “external shocks”.
The legislation, which brings the rainy day fund into effect, sets out that subsequent governments will have to continue to pay into the pot up until 2021. After that three-year period, the government will have to change the law to amend the amount of money it wants to pay.
The minister said the fund will not be used to fund pensions into the future, stating that any monies to deal with pensions will be a separate fund.
The fund has been criticised by opposition parties with Sinn Féin finance spokesperson, Pearse Doherty, describing it as “ill-thought out and ill-timed”, while earlier this year Labour leader, Brendan Howlin said is was “useless”.
“Paschal Donohoe has been told by the Fiscal Council among others that his rainy day fund can’t operate as they would like,” Howlin said, explaining that the fund would have no real impact in the event of another crisis because it will take too long for it to generate a sufficient amount of money.
Fianna Fáil welcomed the announcement of the fund saying it has been endorsed by the European Commission, the Irish Fiscal Advisory Council and the International Monetary Fund.
“Establishing a ‘rainy day fund’ is the responsible thing to do when the economic tailwinds are positive,” Finance spokesperson, Michael McGrath said.
Additional reporting Christina Finn
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And who pays the bill?
Half a story here on the journal
Tom Feely will pay in bitcoins
The €47k that the residents paid last year to Kildare Co Co in LPT would more than comfortably cover the cost of lighting and sewage…
With no street lights how will the kids ever know when it’s time to come in?
I heard the post was late in another estate today. Where’s the journal on that one? One would think someone in the journal lives in the above estate.
I think there’s a pothole being filled in Dingle today also.
Damn it. Dingle gets everything.
Electricity for kilcock…. The future is now…..! Them swans in the canal must be delighted…!
No it’s not a “piss take” …
Yes a lot of ppl have no street lights at all…. The difference with this estate is there are street lights – which have been switched off without notice – why should the next estate have lights and not this one??
It is a built up town not two houses on a five mile country road! It needs lights for various reasons!
There are many estates like this which did not make the news – as no one bothered to stand up and make it happen!!
I’m sure the rate payers of Kildare will be happy.
This has to be a piss-take.
I’s hopes that youse can still see the stars ..lol lol
At last, some light at the end of the tunnel!
Such a relief
Um, what about the sewage plant? The maintenance of the lighting? Who will be paying to ensure services are maintained for the people living there?
The residents in the form of their Local property tax….. Its just a shame that the sheeple of Ireland are not prepared to stand up for what is their LEGAL rights.. When big Phil announced the LPT he justified it by saying it paid for street lighting. Chambers Park residents paid €47k last year in LPT, this would power the sewage system and pay for street lights for 3 YEARS.
You misunderstand, Pa. I was asking which body would be responsible, the local authority? The article never even touched on such questions.
As far as I can see, and your figures back it up, estate dwellers pay far more in LPT than they draw down.
Yet another reason that ghost estates should be treated more equitably.
have your say