Minister for Finance statement on the Government Surplus for 2025

The Minister states:

My Department is projecting a general Government surplus of €8.7 billion in 2025.

This surplus is heavily dependant on highly volatile corporate tax receipts. My Department, the Central Bank, the Fiscal Council and numerous others have highlighted that these receipts are not guaranteed into the future.

My Department estimates the revenue-at-risk to be around €13 billion this year; this estimate is broadly similar to that of the Central Bank and Fiscal Council. Excluding these revenues-at-risk, there would be a deficit of over €4 billion this year.

Government is very conscious of threats to Ireland's economic model arising inter alia from the possibility of additional tariffs being imposed on trade between the US and EU. Few countries are more exposed than Ireland and it is imperative that we keep our powder dry so that budgetary policy can respond in a counter-cyclical manner if needs be.

Over the medium-term, age-related spending is set to increase sharply while facilitating the digital and climate transactions will also involve large fiscal costs. Drawdowns from the future Ireland fund and the Infrastructure, Climate and Nature Fund will only partly offset some of these budgetary costs.

I am, of course conscious of the costs facing households and businesses. That is why we provide billions in direct support since the onset of inflation in the last number of budgets to help mitigate the worst impact of rising prices. However, while the Government is very conscience that higher prices persist, as inflation is now back at normal levels, and we find ourselves facing new challenges, continuing to provide these levels of support is not possible nor appropriate.

As a small, open economy, Ireland's exposure to changes in the international trading environment has been brought into sharp focus in recent months. This is, clearly, a deeply uncertain time for our economy: it is now more important than ever that we maintain a cautious and balanced approached to fiscal policy.