Ireland is officially closing its 103-year-old rainy-day fund

PUBLIC EXPENDITURE MINISTER Jack Chambers will today update government ministers on plans to close a 103-year-old rainy day fund. 

The 1923 ‘contingency fund’ was set up in the early years of the Irish state, with £20,000 initially put into it for unforeseen emergencies. 

It hasn’t been used in the past 22 years, and with a €1.2 million balance, officials recommended using other budget mechanisms for contingency funding.

The outstanding balance is set to be returned to the Exchequer.

Meanwhile, Finance Minister Simon Harris, who returns to work this week after taking paternity leave, will seek cabinet approval to add an additional €1 billion to the Future Ireland Fund (FIF) next year. 

Set up in 2024, the FIF is designed to help the State meet the growing costs associated with an ageing population, demographic change and other financial pressures from 2041 onwards. 

The decision to allocate an additional €1 billion to the FIF will see the total amount put into the fund reach €22.77 billion by the end of 2027.

The FIF is one of two long-term savings funds currently in operation by the government.

The other fund, the Infrastructure Climate and Nature Fund (ICNF), is projected to reach €8 billion by the end of next year.

It is designed to help protect government spending during an economic downturn and to support investment in environmental projects.

Together, it means the State will have transferred more than €30 billion into its two long-term savings funds by the end of 2027.

Today’s top-up comes after the State’s spending watchdog, the Irish Fiscal Advisory Council, warned earlier this year that the State would have to borrow money to continue investing in its wealth funds.