Right now, the State is awash with cash but an ageing population and climate change will require higher spending in the medium term and possibly higher taxes
Pre-budget figures show the exchequer awash with cash, due in part to the Apple tax money but also strong corporate and income taxes
Second, the exchequer will be in surplus to the tune of €11.8 billion next year, before account is taken of budget day announcements. So there is plenty of leeway for the planned budget tax and spending measures, while also keeping the figures in surplus; and allocating €6 billion to two investment funds for the future.
The Apple money will boost the sums significantly. But the real key is the strength of corporation tax, now expected to be €29.5 billion this year, before counting in the Apple money, up from the midyear estimate of €24.5 billion. Again excluding the portion of the Apple cash expected to arrive next year, the Department of Finance is expecting a similar level of underlying corporation tax next year.
All of this is, as ever, vulnerable to economic shocks but for now there is significant room in the public finances to absorb a period of slower growth. As well as the surpluses and the Apple money, the NTMA has cash balances of around €26 billion - and that is before the Apple money arrives.
Jack-Chambers Paschal-Donohoe Apple
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