The Minister for Finance, Michael McGrath TD and the Minister for Public Expenditure, NDP Delivery and Reform, Paschal Donohoe TD, have published the Future Ireland Fund and Infrastructure, Climate and Nature Fund Bill 2024. The purpose of the Bill is to provide for the establishment of two new funds to support future expenditure by the State.
The Future Ireland Fund (FIF) is i is intended to support future expenditure as the economy is likely to face increased pressures associated with climate change, digitalisation, and an ageing population. It will support State expenditure in any year from 2041 in a consistent and sustainable manner. It
The Infrastructure, Climate and Nature Fund (ICNF) is intended to support State expenditure from 2026 or in any year thereafter, in the event of a significant deterioration in the economic or fiscal position of the State, and between 2026 and 2030, to support State expenditure on certain environmental projects.
The Bill also provides for the control and management of those funds by the National Treasury Management Agency, and for the dissolution of the National Surplus (Exceptional Contingencies) Reserve Fund and the transfer of the assets of that Fund to the Future Ireland Fund and the Infrastructure, Climate and Nature Fund.
Annual contributions of 0.8 percent of GDP will be made to the FIF from 2024 until 2035, after which further contributions can be provided through a Dáil resolution. Approximately €4.1 billion will also be transferred from the dissolution of the National Reserve Fund in 2024.There is no limit on the potential size of this Fund. €2 billion will be invested in the ICNF each year from 2024 to 2030.
Commenting, the Minister for Finance, Michael McGrath T.D. said:
“Ireland’s public finances are currently in a strong position, underpinned by record Corporation Tax receipts, which last year reached nearly €24 billion. It is essential that we take action now to secure the public finances over the long term to ensure we can meet the future expenditure requirements we know will arise.
This landmark Bill will establish the Future Ireland Fund. The Bill provides for an annual Exchequer contribution from 2024-2035 to the Future Ireland Fund which will ultimately provide a revenue stream to help meet demands posed by a wider range of issues including demographic changes, digitalisation, de-carbonisation and de-globalisation.
With annual contributions, GDP growth and potential return from investments, there is a potential for the fund to grow to around €100 billion by 2035, which will give the State substantial firepower to manage the increased demands on expenditure in the decades ahead.
In addition, the Bill will establish the Infrastructure, Climate and Nature Fund, which will provide an essential buffer for expenditure by the State during an economic downturn. This will help smoothen the investment cycle and help support employment at a critical time of economic distress. The fund will also provide support to designated environmental projects that will contribute to a range of climate, water and biodiversity objectives.”
Further information is available on gov.ie.