Ireland’s finance minister Michael McGrath laid out plans to launch a sovereign wealth fund targeting some €100 billion 9£86 billion) in assets under management by the mid-2030s on Tuesday.
In a budget speech, McGrath said the fund would help “protect living standards and public services,” being set up with capital collected through corporation tax.
Ireland has benefitted from global tax reforms over the past decade which sought to clamp down on countries that did not charge corporation tax.
As a result of its relatively low rate of 12.5%, Ireland’s take from corporate tax jumped from an average of €4 billion between 2009 and 2014, to over €22 billion last year.
This led to Ireland being one of the few European Union members to pen a budget surplus in 2022, with this likely to reoccur in the coming years.
"This is a realistic and achievable plan for Ireland and the window of opportunity will not remain open indefinitely. We must seize it now," McGrath said in his speech.
A smaller €14 billion climate and infrastructure fund will also be set up, McGrath announced, designed to provide capital for Ireland to cut emissions, even in the event of an economic downturn, over the coming years.
Climate group Friends of the Earth described the move as a “landmark development”.
“It means that whoever is in government after the next election will have funds to invest in getting off fossil fuels and reducing pollution, no matter what happens to tax receipts,” the group’s chief executive Oisín Coghlan said.