‘We’ll dip into €6bn rainy day fund if needed next year’

THE Government cannot rule out dipping into the €6billion rainy day fund early next year to help people struggling with the cost-of-living crisis, the Public Expenditure Minister has said.

Michael McGrath said it was ‘prudent’ of the Government to set aside the funds, despite not intending to use them.

‘It is a sensible thing to do, it is the right thing to do,’ Mr McGrath said.

‘We don’t know what will happen with the terrible war in Ukraine. But it’s a good thing that we have that reserve. We have that funding there if we need it.

‘We don’t intend to use it but we cannot rule anything out. It all depends on circumstances. And we will use our best judgment as time goes by, as to what is the right decision or course of action to take.’

Mr McGrath made the remarks after answering questions from listeners during RTÉ Radio 1’s Today with Claire Byrne annual Budget phone-in show.

He was there alongside Finance Minister Paschal Donohoe who said the Government had ensured there was a Budget surplus so that it has ‘the ability to help if conditions changed’.

He added: ‘Michael and I have been united, as has the Government, in saying we’ve brought forward measures that go into a sixmonth period to provide as much certainty as we can.

‘We hope we’ll be in a better place at that point. But the reason why we have a budget surplus is to be able to respond back to conditions that are changing.’

Mr Donohoe described the measures unveiled by both ministers as ‘fair’.

‘The Budget showed very clearly that those who have the least get the most... in the round, this is a very, very fair Budget,’ he said.

They made the remarks after Tánaiste Leo Varadkar said the Government will reassess the country’s financial situation in the new year to see whether it needs to intervene again to help people.

But he said he did not envisage a minibudget being implemented.

‘Ultimately, this Budget is about helping people with the cost of living, reducing the amount of tax you pay, increasing welfare payments and pensions, [putting] more money in people’s pockets and reducing some costs that are very high in Ireland, like childcare or public transport or the cost of putting children through college,’ Mr Varadkar told the Morning Ireland programmeon RTÉ Radio.

He added that the Government had the ‘financial firepower’ to intervene again, if needed.