The annual cost of interest payments alone on Ireland’s national debt equates to about €650 per person living in the country, the Dáil’s public spending watchdog has been told.
The “ballpark” figure was provided by Department of Finance chief economist John McCarthy, who said the interest bill for the €223 billion national debt will be €3.4 billion in 2023.
The Public Accounts Committee (PAC) was told that, overall, the national debt equates to about €45,000 for every individual in the State.
Senior Department of Finance officials were before the committee to answer questions about various issues, including the exchequer out-turn for 2022.
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Comptroller and Auditor General (C&AG) Seamus McCarthy told TDs that the exchequer surplus was just under €5 billion in 2022, “significant improvement” from the deficit of €7.4 billion reported in 2021.
He said this improvement of almost €12.4 billion was “driven largely by increases in tax revenue in 2022 and a decline in Covid-19 related expenditure”.
He said the national debt stood at €231.2 billion at the end of 2022.
Mr McCarthy said it will be €223 billion at the end of this year.
He outlined how the debt had gone up by €180 billion after the last economic crash, with two-thirds of this due to the gap between the State’s revenue and expenditure from 2008 onwards and a third due to bank debts.
PAC chairman, Sinn Féin TD Brian Stanley, asked about the impact of the Covid-19 pandemic on the national debt.
Department of Finance secretary general John Hogan said that over the last 10 years the National Treasury Management Agency (NTMA) has elongated and reduced the cost of parts of the debt by refinancing, particularly when interest rates were very low.
He said costs to the State during the pandemic were “quite substantial”, highlighting support measures such as the Employment Wage Subsidy Scheme (EWSS) and the Pandemic Unemployment Payment (PUP) and adding: “We ran deficits through that period.”
Mr McCarthy said the increase to the national debt was “actually not that large”. He later put it at an increase of about €13 billion across the pandemic years.
He said: “Obviously there was a lot of expenditure but actually what we had was a good Covid, if I could use a horrible expression, because we had a number of pandemic-proof sectors that did really, really well”.
He pointed to the pharmaceutical and tech industries and said corporation taxes “essentially doubled between just the year before the pandemic and 2022″ and he said this offset much of the expenditure that Mr Hogan had mentioned.
Mr McCarthy said one thing to “bear in mind” was that there were balances in funds that actually were drawn down during Covid.
He said the Social Insurance Fund had about €3 billion in it at the beginning of Covid and “nothing at the end”.
Mr Stanley remarked: “We can’t keep raiding the Social Insurance Fund.”
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