Ireland last year recorded a budget surplus for only the second time since the economic crash.

The Taoiseach revealed the surplus of €100m following this morning’s meeting of Cabinet ministers.

Leo Varadkar said the excess funds are the result of a €250m under-spend and a “very big increase” of between €1bn and €2bn in corporate tax income.

He said the under-spend was largely related to service costs for the national debt.

"In 2018 we recorded a budget surplus of just over €100m," he said.

"So we have achieved a budget surplus a year ahead of schedule and this is the first time we have recorded a budget surplus in a decade – with the exception of the year in which the AIB shares were sold and that was kind of a one-off effect."

Mr Varadkar said the government expects to run a budget surplus once again in 2019 – and claimed that the extra funds mean Ireland is better prepared for an economic shock than many other countries that are still running deficits.

Housing and health

Following the announcement, Labour Party finance spokesperson Joan Burton called on the Government to invest in essential public services, noting that the "continued failure to address social housing needs is difficult to understand."

"The Exchequer surplus of nearly €100 million is good news, but it stands in stark contrast to the ongoing crisis in housing and health," she said.

"This Government is at risk of squandering the recovery by its failure to invest in housing and health.

"This Government should not forget that this economic recovery is as a result of hard sacrifices made the public, and public sector workers, during the recession.

"Leprechaun economics continues to haunt Ireland as Minister Donohoe sits on his 'Rainy Day Fund' while there is clearly need to invest now, in the public sector."

Ringfenced funds

This evening the business group Ibec warned that without the "unexpected surge in corporate tax" last year the Government would be running a deficit and "would be spending €5.3 billion more than we are bringing in."

“To date, much of the volatility in corporation tax receipts was positive, but were it to move in the other direction, government finances would be left very exposed as most of this unexpected revenue was used to finance unplanned supplementary estimates," it said.

"Any future surge in resources should be ring-fenced for one off capital projects as opposed to day to day spending.”

Investment

It comes as IDA Ireland warned that multinational companies that are considering investing in Ireland are "keenly aware" of the housing shortage. 

The agency's CEO Martin Shanahan said the shortage is not putting investors off as yet as they have listened to the Government's claims that the housing crisis is top of its agenda.