Huge Budget surplus must be spent in a way that benefits us all

Finance Minister Michael McGrath has some very important decision to make. Photo: Damien Storan — © PA

Editorial

Some political wag or other said it would be nice to spend billions on schools and roads, but right now that money is desperately needed for political ads.

Given our chequered history with bumper revenues and a dangerous tendency to be wasteful, some people might not find the remark all that funny.

One would hope we are all a little wiser following challenges from the relatively recent past right up to the present: a crash, a pandemic, a downturn, and a cost-of-living crisis.

That old Charlie McCreevy line – “When I have it, I spend it, and when I don’t, I don’t” – holds water.

For Finance Minister Michael McGrath, the choices that come with anticipated Budget surpluses of €65bn in the years up to 2026 are a good headache to have.

Mr McGrath has brought a paper to Cabinet on the proposed next steps in future-proofing the public finances.

With interest rates rising and global uncertainty worsening, we are very fortunate to have such an economic buffer zone.

It would be foolish to imagine such a favourable financial outlook lasting forever, and utterly crazy to squander it. For example, it is always hard to argue against setting aside funds for the future.

Warren Buffett may have become something of a caricature for folksy capitalism, but his strike rate is nonetheless impressive.

For Buffett, caution is key. He advised: “Do not save what is left after spending, but spend what is left after saving.”

Finding a solution to best use the resources for the greatest public benefit has to be the top priority. There is talk of repurposing the existing National Reserve Fund with a view to implementing a more diversified investment strategy, generating long-term returns.

In truth, there are any number of ways in which the money can be spent.

There is a strong argument for paying down the national debt, with interest rates rising after a period of historic lows.

It currently stands at over €225bn having risen sharply during the pandemic.

This breaks down to €44,000 per head of population. Anything that can be done to ease the burden would make sense.

The housing emergency is impacting families all over the country. On top of that, the shortage of accommodation is also proving a threat to foreign direct investment.

If companies cannot find affordable living quarters for their workers, they will simply locate elsewhere.

A State-driven national housebuilding scheme must be considered if the requisite number of homes are to be delivered.

Nor should we forget that there are almost 670,000 people in Ireland living below the poverty line.

Their pressing needs must be factored into how the revenue is used if we are to build the just ­society we pay such lip service to.