How to spend our €65billion surplus? Let’s ask the people in referendum

THERE is a scene in the seminal 1980s Liverpool drama The Boys From The Blackstuff which has stayed in my mind for 40 years.

Likeable family man Chrissie, worn down to a shell by poverty, unemployment and lost self-esteem, kicks the sofa in his living room in frustration and anger, and uncovers a long-lost fiver.

He has just eaten the last of the bread earmarked for his kids, and we viewers implore him to spend this surprise windfall wisely.

Chrissie’s face goes through a kaleidoscope of emotions as he ponders what to do... then a look of determination; his mind is made up. He goes out and buys a half-bottle of whisky, four cans of lager and a bag of chips (simpler - and cheaper! - times), sits on the broken sofa, and drunkenly sings Memories Are Made Of This.

The scene gets to the heart of one of those common barstool or water-cooler debates: What would you do with a surprise windfall? How would you spend a lottery jackpot? Would you be wise and do the right thing? Are you sure of that? Or are you already humming Memories Are Made Of This?!

Well, Finance Minister Michael McGrath has just had one of those back-of-the-sofa moments, except he found a bit more than a fiver. To be precise, he found €65billion, give or take a billion.

Now his face is going through a kaleidoscope of emotions, as he ponders what to do with it...

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In his spring economic forecast last month, Cork TD Mr McGrath was able to deliver some very good news. This year, the state will collect €10billion more in taxes than it spends.

And the good news doesn’t end there - these surpluses are forecast to amount to a sum of €65billion by 2025.

Where has this money found down the back of the Exchequer’s sofa come from?

Quite simply, the vast windfall is almost completely down to our Corporation Tax system, by which we lure some of the world’s largest and wealthiest companies to our shores with our low rate.

Yes, yes, our well-trained, highly-motivated workforce and our lovely scenery help... but, ultimately, er, low tax rate!

This is all, of course, spiffing news for the country and for the Government, who can now blow huge sums of money on making Ireland the best little country in the world, while also cutting our taxes to Dubai-style levels. Right?

Where do you want your second conference centre, Cork?! And did someone suggest a monorail?!

Er, reality check. That is not going to happen, and for a number of reasons.

The main one is that, as Mr McGrath has cautioned, the ballooning Corporation Tax is not a tap that will pour money into our coffers forevermore. It is likely to be a temporary spraying of money that could slow to a trickle very quickly - before the monorail has even been costed.

So, we don’t want to factor this into our day-to-day spending in case we are left high and dry when the tap turns off.

Another reason to avoid a splurge is by recalling the fabled - possibly apocryphal - words of the Celtic Tiger Finance Minister Charlie McCreevy: “When I have it, I spend it, and when I don’t, I don’t.”

You may recall, that whole spend, spend, spend era turned sour when the property taxes that had fuelled it dried up overnight.

Furthermore, injecting billions into our economy will only fuel higher inflation at a time when it is already at a worrying level.

The gut reaction is to hurl as much money as possible at the housing and health issues to fix them, but that has shades of Chrissie’s alcohol-fuelled frenzy.

Anyway, Ireland Inc is doing nicely enough on the finance front, with large sums of money already set aside for housing and health. Just because our Government cannot fix the problems in those areas doesn’t mean more money is needed.

So, Mr McGrath is left with a puzzle, albeit a happy one. What to do with that €65billion?

Sure, there has been no shortage of advice, from allies and enemies in politics and from the media, and I am going to add my tuppence worth. Neither of my ideas are particularly sexy or eye-catching, but they strike me as the best ways to use a €65billion windfall.

1. Defuse our pensions timebomb.

2. Pay off a hefty chunk of our national debt.

They may be ultra-sensible, but future generations would thank us profusely for our farsightedness.

The first solution would address a problem that Ireland faces in the coming decades, when we have too few young people paying taxes for too many pensioners. The easiest solution, to increase the state pension age as our people live for longer, has, unfortunately proven to be a political no-no.

I reckon €65 billion would go a long easy to heading off this pending crisis, and just about everyone alive today, and who is born for years to come, would benefit.

The second solution here is even less sexy. but bear with me!

Our national debt is an astounding €226 billion, which works out at around €44,000 for every man, woman, and child in the Republic - one of the highest per capita levels in the world.

Some of this is Covid-related, but some of it is down to the fact that even the so-called centre and right-wing parties in the state now spend money like a drunken sailor on leave, and neither politicians nor the electorate seem to care that what we borrow, we have to give back.

That €65 billion would swallow up a vast amount of our debt, and reduce interest charges too.

Next time a global recession hits, our relatively low national debt should insulate us from the worst of the fall-out.

These two solutions are surely the best way to use a surprise windfall - but there is a problem.

Politicians would rather flash the cash now than squirrel it away for a rainy day; how many votes are there in a sensible plan that is good for the country in the long-term?

This is why I have a suggestion on how to solve Mr McGrath’s €65 billion headache.

We hold a referendum and let the people decide.

The Government gets to choose which options to put on the ballot paper, and then abides by what the public says.

The ballot could offer multiple options:

a) Pay off some national debt.

b) Put towards future pension shortfall.

c) Spend on one of these public services today

1. Housing

2. Health

3. Transport

Then, either the winner takes it all, or you divvy up the cash in line with the vote - for example, if 55% vote for national debt, 55% of the money goes to that, etc.

How about it?

What an engaging referendum campaign that would be, the turn-out would be huge!

How would YOU spend the cash?