There’s a €65 billion jackpot in expected surpluses coming down the line before 2026 but let’s not get too excited – it will not cover the costs of pensions, healthcare and the other needs of an ageing population.
That’s the essence of what Ministers were being told at Cabinet on Tuesday.
It seems that if Ireland has won the corporation tax lotto, PRSI increases will still be necessary to meet the increased costs of going grey in the years ahead.
As Pat Leahy, Jack Horgan-Jones and Cliff Taylor report in our front page story, figures published by the Government in recent weeks showed that a €12 billion surplus is expected this year, rising to €16 billion next year, though some of this money is likely to be spent in additional budget spending measures.
Department of Finance officials have warned consistently that some of these revenues are “windfall” in nature, and cannot be relied upon to continue at present rates.
Minister for Finance Michael McGrath and his ally Minister for Public Expenditure Paschal Donohoe are known to favour saving as much as possible for future needs.
Mr McGrath will publish a paper today outlining options for using the budget surpluses.
He is planning to bring forward legislation in the coming weeks to establish a long-term savings vehicle, similar to sovereign wealth funds that have operated in Norway, Australia and Japan.
However, Ministers were told that drawdowns from such a fund would be insufficient to meet the entire cost of demographic change, which is estimated to cost an extra €7 billion to €8 billion a year by the end of this decade and to continue to climb afterwards.
It is understood that Cabinet was told that under scenarios modelled, drawdowns from the fund would not be sufficient to cover the increase in ageing-related costs by the middle of the 2030s, with a need to complement this income with other reforms, such as increases in PRSI.
The other options for using the billions expected to come in over the next few years are paying off some of the national debt and boosting Government capital investment.
While much of the Opposition parties would put some, or even the bulk, of the expected windfall into a rainy-day fund – they have some other ideas for how to use the money as well as we set out here.
In his analysis, Taylor looks at how the €65 billion can be spent with four options “from safe to risky”, here.
Jury rules that Donald Trump sexually abused E Jean Carroll in New York civil suit
It was just last week that former US president and 2024 White House hopeful Donald Trump was swinging golf clubs and making defiant statements at his Doonbeg golf course in Co Clare.
In our print lead, US Correspondent Martin Wall reports today on how court proceedings in New York on Tuesday saw a jury find Mr Trump liable for sexually abusing and defaming magazine columnist E Jean Carroll.
The jury did not accept that he had raped her but found that Mr Trump should pay $5 million in total damages to the writer arising from both the findings of sexual abuse and defamation.
The latter finding came after comments by Mr Trump calling Ms Carroll’s case a “hoax and a lie”.
It is expected the former president will appeal the finding by the jury.
Wall looks at what it could mean for Mr Trump’s ambition to return to the White House here.
Best Reads
Ahead of a meeting between Government and retailers on the high prices being charged for groceries, Miriam Lord writes that junior minister – and keen rugby player – Neale Richmond is “all togged out” for today’s scrum.
For fans of European geopolitics and international votes, there was heartbreak for Ireland’s Eurovision contenders Wild Youth as they failed to make this weekend’s final in Liverpool. Our London Correspondent Mark Paul reports from the host city on last night’s events.
Elsewhere Michael McDowell tackles how the decline of the House of Windsor has implications for Ireland. He asks how unionists will feel if the British monarchy adopts a Scandinavian style: appearing in casual gear and bicycle clips?
Playbook
The action starts in the Dáil at 9.12am with an opportunity for TDs to raise ‘Topical Issues’.
Leaders’ Questions is at noon.
Government Business in the afternoon includes The Civil Defence Bill 2023 and the Agricultural and Food Supply Chain Bill 2022.
The weekly Dáil votes are due to take place from 9.29pm.
In committee-land, Minister for Enterprise Simon Coveney will update the Enterprise Committee on his Department’s priorities from the start of the year at 9.30am.
Later representatives of Cork, Dublin, Rosslare and Shannon Foynes ports will brief the Transport Committee on long-term strategy and future development from 1.30pm.
