Opposition TDs have condemned a Government decision to introduce a resolution on budget night to allocate €6 billion to the National Reserve Fund with just two minutes of debate for each party and group.
People Before Profit TD Richard Boyd-Barrett said it was the final item of debate on Wednesday night to dispose of €6 billion. “It’s a big decision to put it into the rainy day fund when it could have gone to housing.”
The Dún Laoghaire TD told the Dáil that at the very least there should be a proper debate on the matter.
The argument arose ahead of the first Dáil vote when TDs backed by 85 to 67 a move to extend a reduced VAT rate on petrol ( 21c), diesel (16c) and marked gas oil (5c) to the end of February next year at a cost of €281 million.
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The Dáil also accepted the extension of the reduced 9 per cent VAT rate on electricity and gas until the end of February at an estimated cost of €45 million. Labour finance spokesman Ged Nash called for the reduced VAT rate on energy charges to be maintained until the end of 2023.
TDs also approved the 50c increase in a packet of cigarettes, and the pro rata increases on other tobacco products, despite criticism that the tax financially punished particularly older and more financially vulnerable people.
Minister for Health Stephen Donnelly said the annual increases worked and the numbers smoking had dropped from 29 per cent in 2012 to 16 per cent currently, but Independent TD Michael McNamara said he would like to see the figures for such claims.
Former smoker and Independent Rural TD Richard O’Donoghue said a tax at this time was not the right thing to do when for many it was the only comfort they had.
In the row over the rainy day fund Labour leader Ivana Bacik said her party had written to the Ceann Comhairle to express their concerns about the issue being so briefly considered and without notice. She said “it is a huge amount of money” and that it was not a financial resolution that needed to be taken before midnight.
Labour’s Brendan Howlin said it was “unprecedented” to discuss such a move on budget night. It was a “huge amount of public money”, and he called for it to be deferred for a full debate.
Sinn Féin whip Pádraig Mac Lochlainn said although his party agreed in principle with the fund it had a “real concern” about dealing with the motion without the necessary full debate.
Minister for Finance Paschal Donohoe in his budget address to the Dáil announced a plan to put funding aside “for future challenges”.
He said he would put €2 billion into the National Reserve Fund this year and €4 billion in 2023 as he cited “very costly” challenges for future generations including an ageing population, digital transition and climate change.
Mr Donohoe added there were also “largely unforeseen challenges” that were “becoming increasingly frequent and increasingly impactful”.
Such a move would ensure that a large share of additional corporation tax revenues would be “banked” and do not fund permanent expenditure. They will supply the exchequer “with additional firepower to respond to challenges over the coming years”, the Minster said.
In the last vote of the night TDs accepted by 92 to 62 the motion to approve the transfer of funds under the National Surplus (Reserve Fund for Exceptional Contingencies) Act.
