Taoiseach Leo Varadkar has confirmed the Government decided at this morning's Cabinet meeting to introduce legislation to set-up a Rainy Day Fund.
He made the announcement in response to questions from Labour Party leader Brendan Howlin, who suggested that fiscal rules will prohibit the deployment of such a fund.
"The whole idea of having a reserve fund is to deploy it when you need to. But the fiscal rules work counter to that," he said.
In his Budget speech last October, Minister for Finance Paschal Donohoe said that the Rainy Day Fund will be established in the coming year, with at least €1.5bn transferred to it from the Ireland Strategic Investment Fund.
Mr Donohoe said the establishment of the fund is "another important step in strengthening the national finances in a changing and risky world, especially in light of Brexit".
Today, Mr Varadkar said that €500m will be added to the fund every year.
In response to Mr Howlin, the Taoiseach said the fund will be established in 2019 so legislation will need to be in place before the end of next year to allow the fund to be established.
The Labour leader asked if it was more logical to spend money now in preventing the need to use the Rainy Day Fund, "by ensuring we have an investment in infrastructure and the deficiencies that have been identified over the last few years."
In response, Mr Varadkar said that a balance is required.
"Yes we need to invest in infrastructure in Ireland, in order to allow our economy to continue to grow, in order to allow our society to develop and in order to remove bottle necks," he said.
The Taoiseach said that there will be a 25% increase in public infrastructure in 2019 alone, and warned about not going back to the policy of the past which was "when I have it, I will spend it".
