Save the Apple billions and reap the rewards
Investing €14bn would provide the government with an annual dividend of €700 million
CHRISTMAS came early for the government this year in the form of a €14 billion boost, thanks to Apple, which, it would appear, the government never wanted. In fact, it spent €10 million of our money trying to defend why it should not be obliged to accept this money.
If ever we needed proof that a politician can explain practically everything, we got it last week, when there was no shortage of takers to step up to the mark to justify spending that €10 million and also to justify the Irish stance in not believing we were entitled to the money in the first place.
This was tax money the EU was arguing Apple should have paid to the Irish government, but both Apple and the Irish government were arguing otherwise. As we all know, the matter ended up in the courts in Europe, but a definitive verdict was handed down last week stating we had to accept this gift horse.
Next comes the thorny issue of how all this money should be spent. Do it too quickly and instead of helping the Irish economy, it could do the complete opposite.
Norway, which has the largest wealth fund in the world, found that out to its cost when oil was first discovered in the North Sea. They used revenue from this lucrative source to fund day-to-day spending in the country, but instead of improving their lot, the Norwegians found the opposite was happening.
Eventually they did the complete opposite and started salting away the North Sea oil revenue (forgive the pun) for a rainy day – to such an extent that it now has the largest wealth fund in the world, bigger than Saudia Arabia and China.
Just to put some perspective on the size of this gift to Ireland, we should remember that this state currently spends about €100 billion annually, give or take a few billion.
In the current year, it is estimated that the government will spend about €12 billion on capital projects, including the infamous children’s hospital as well as other developments. So what happens to the rest of the money? About one-fifth of that entire sum goes on just three areas of spending. For every €100 spent, €9.34 goes on funding the state pension, hence the worry that over the next ten to 20 years, Ireland is facing a huge time bomb in this sector. But as we all know, there are no votes to be garnered by major changes to that sector, so although there were efforts to tweak the retirement age, that move seems to have stalled, at least until after the upcoming general election.
Out of that same €100, another €7 goes to fund acute hospitals, but ask many people, especially those having to use Limerick University Hospital, if value for money is being achieved in this area and they will quick shake their heads.
Who can blame them? I had a personal experience last week where, after four months of numerous phone calls and unbelievable wait times on the phone, I eventually managed to get though to someone who genuinely cared and scheduled an appointment for a scan in advance of a prearranged face-to-face meeting with a consultant to discuss said scan. Otherwise, we would have all turned up to look at one another without anything to discuss. In other words, a complete waste of time.
Slightly less that €5 of that same €100 is also spent on welfare payments to the ill, those with a disability and carers, but as anyone familiar with that system knows, carers, who actually save the state a small fortune, receive slightly more than the minimum wage for the invaluable work they do.
All we can really hope for is that sense will prevail and those who have the power to make the big decisions will see the light and perhaps defer raiding this newfound cash and opt to leave it where it is and instead collect €700 million in interest forever and amen, which could then really become the golden goose that continues to give again and again and again.
But don’t hold your breath, remember the rainy-day fund started by Charlie McCreevy back in the day, which was supposed to be used to offset the pension timebomb? Does anyone really know how many times that has been raided? Granted, we had the Celtic Tiger meltdown and Covid to contend with, which our leaders will tell us would have been far worse if we didn’t have that fund to dip into. But as anyone knows, when you start dipping into your savings, it is a major ask to start the process all over again. Thankfully, most of the work has already been done on the upcoming budget, but it is next year and further down the line that we should worry about to ensure we make the most of this early Christmas present.
