Irish Fiscal Advisory Council warns borrowing needed for savings funds as debt set to rise

The Irish Fiscal Advisory Council (IFAC) has issued a stark warning that two government-backed savings funds, intended to hold a portion of corporation tax revenue from multinationals, will require borrowing for partial funding. This development arises because the government intends to spend the majority of the corporation tax it collects.

The IFAC projects that Ireland's national debt will climb from €220 billion to €250 billion by 2030 as the government borrows money to cover payments for these savings funds. "This departs from the original purpose of those funds, which was to save, rather than spend, risky corporation tax receipts," the council stated, highlighting the added cost of interest payments on the borrowings.

“

This departs from the original purpose of those funds, which was to save, rather than spend, risky corporation tax receipts.

In its latest report, the council urged the government to prioritize running larger budget surpluses instead. IFAC chair Seamus Coffey expressed concern that corporation tax earmarked for these funds is "actually being spent," noting that approximately €5 out of every €6 collected is now being consumed. This situation unfolds against a backdrop of growing unease about Ireland's increasing reliance on volatile corporation tax receipts, with pharmaceutical giant Eli Lilly and tech firms Microsoft and Apple being major contributors.

“

The key concern is that corporation tax that was planned to be put in these funds is actually being spent.

The IFAC also criticized government overspending, pointing to "sizeable overruns" already apparent for 2026, including a €0.7 billion increase in the expenditure ceiling due to education costs and energy support measures. The council forecasts that spending between 2025 and 2030 will grow at an annual rate of 7%, significantly exceeding the economy's sustainable growth rate of around 5%. This trajectory positions Ireland as having the fastest net spending growth in the EU, according to the council's medium-term plan.

Consequently, the IFAC is calling for the government to implement budgetary policies that mitigate economic cycle fluctuations and introduce a national rule to guide spending growth. The council believes such measures are crucial for ensuring fiscal stability and sustainable economic management.

“

Sizeable overruns are already apparent for 2026.