Brendan Howlin says ‘rainy day fund’ should not lie idle

Labour leader Brendan Howlin has criticised the inclusion of a rainy day fund in the Government's summer economic statement.

“When we have an urgent need for investment in infrastructure, whether it be broadband, schools, health services or roads, apparently the Government will effectively put money on deposit,’’ he said.

“Even if it could be used to pay down debt, it would be more reasonable than simply leaving money on deposit.’’

Mr Howlin, a former minister for public expenditure, suggested investment in urgently needed infrastructure made much more sense than simply creating the fund.

Taoiseach Enda Kenny said there was a commitment in the programme for government to provide for a rainy day fund.

Ministers with responsibility for financial issues had pointed out €1 billion annually would go to the fund in the period 2019 to 2021, with a commitment to bring forward proposals for discussion in the Oireachtas, he said.

Mr Kenny said it would be a matter for the government of the day as to whether that should continue beyond 2021 and how it should be used, depending on the circumstances that applied internationally or from an economic perspective.

Mr Howlin said a new budgetary architecture had been promised in the programme for government. He asked how there could be an agreement in respect of next year’s budget if its parameters were determined without consultation with anybody.

Mr Kenny said the summer statement would be discussed for four hours tomorrow.

“The national dialogue will take place next week and the committees of the House will do their business on the preparation for the budget running into October,’’ he added.