Sinn Féin warn Ireland is becoming too reliant on foreign investment
As the government has announced an 11-month exchequer surplus for the first time since 2007, opposition TDs have been calling for caution, prudential planning, and the appropriate use of the additional funds.
Latest exchequer returns show that the state surplus stands at roughly €350m – an improvement of close to €6bn on the same time last year.
The government's been told it should spend its extra tax income to end the housing crisis - instead of paying the national debt.
Figures published today show that the coalition has taken in €3bn more in taxes than expected since the start of 2015.
The vast bulk of the windfall comes in the form of Corporation Tax, which has provided receipts some €2bn ahead of expectations, and VAT.
The boost to state coffers mean Ireland can likely stop borrowing by 2017 – one year ahead of schedule. However there have been calls for the money to spent on solving more immediate issues.
Richard Boyd Barrett of People Before Profit has called for the cash to go to solving the housing crisis, or supporting the healthcare system. He has said the choice to spend the money on debt is “quite extraordinary.”
“I think it’s absolutely shocking that we ahve 3bn extra in tax revenue and instead of using that to solve an absolute disastrous situation with housing and homelessness, or putting it into our health service, which is an absolute mess,” he said.
“The government are going to use this money to pay off even faster the odious and illegitimate debts of bankers and bondholders. It’s quite extraordinary.”
Others in opposition today hummed a tune of caution towards the celebratory government benches – with both Fianna Fáil and Sinn Féin calling for a measured, cautious response.
Fianna Fáil finance spokesperson Michael McGrath has called for a rainy-day fund, to be swelled as unexpected revenue comes in, and kept to hand in the event of another economic collapse.
“There is now a need to start considering a fund which would be ring fenced which could not be dipped into for day to day expenditure,” he said.
The fund would be added to with “unexpected receipts from corporation tax (and) from other revenue sources” to be accessed “to deal with future downturns in the economy which inevitably will happen,” he added.
Sinn Féin meanwhile have warned that the State is becoming too reliant on one sector, Foreign Direct Investment, and is “becoming increasingly imbalanced and exposed”.
“The revenue commission stated that 146 companies made up 70% of the corporation tax intake last year, and we also know that 90% of exports in this state are from the FDI sector,” Sinn Féin TD Peadar Toibin said.
“So the economy is becoming increasingly imbalanced and exposed.”
The Revenue has confirmed that €1.2bn of this year’s surplus has come from a number of corporations paying over €100m each in tax.
In November the European Commission said it was not sure how Ireland was raising so much money in corporation tax, with inspectors from Brussels saying it still “needs to be ascertained” exactly how the corporation tax was then 60% above the corresponding 2014 figure.
“The increase is being financed by much higher-than-expected government revenue,” a statement from the EC said.
“However, the factors underlying the very buoyant and generally volatile corporate tax receipts still need to be ascertained,” it added.
Earlier this month the Chariman of the Revenue Commissioners wrote to the Minister for Finance advising him that some €300m of this year’s corporation tax should not be accounted for in next year’s forecasts.