The Minister for Finance Michael McGrath has said it is "blindingly obvious" to him that the Government needs to set up a fund to save some of the billions of euro expected through a windfall of corporation tax in the coming years.
The Minister was speaking at the publication of a report setting out the options for what is expected to be €65 billion in corporation tax receipts over the next three years.
An ageing population and climate change will require billions more in public spending over the next few decades.
Not all of this cost will be covered by the current bonanza in corporation tax, but it would make a big dent in future bills.
The Minister for Finance Michael McGrath said today that the current windfall of corporation tax presents a "once in a generation" opportunity to make the public finances safer and more sustainable into the future.
The options set out in a report from the Department of Finances include an investment fund, paying down some of the national debt and using some of the receipts for targeted infrastructure projects.
The Minister said today a more detailed proposal on these options will be brought to Cabinet before the summer recess.
Michael McGrath also said today he is considering a recommendation to increase contributions this year to the existing National Reserve Fund.
He is also considering merging this fund, which has a maximum level set at €8 billion and currently holds €6 billion, into the newly proposed fund.
The report today makes clear that drawdowns from the new fund in the future will not be enough to cover age-related costs. Other reforms, "including increases in rates of PRSI" will be required.
Today's report says the decision to keep the qualification age for the State pension at 66 will cost "around €50 billion by 2050".
Other costs around climate change and digitilisation are more difficult to quantify.
If all of the calculated "windfall" portion of corporation tax were saved every year and the current National Reserve Fund is included, the report finds that by the end of this decade contributions to the new fund could total €90 billion.
That is before any return on the accumulated fund is factored in. It also assumes that today's levels of corporation tax returns are continued.
The report also runs various scenarios on what returns could accrue to the fund and from what year drawdowns might begin.
The rates of return are between 3-5% while the drawdown dates are between 2030 and 2035.
It calculates a wide range of between 16% and 102% of projected ageing costs which could be covered depending on how long the fund is invested and what the returns are.
