Editorial: Republic's €65 billion surplus could be shared with north

It is difficult to imagine how the gulf between public finances in the north and south could be any deeper.

In the Republic, finance minister Michael McGrath and his cabinet colleagues are considering what to do with the vast €65 billion budget surplus expected to accumulate between now and 2026. The sum is so enormous that it seems like a form of fantasy economics; no wonder Mr McGrath has described it as a "once in a generation opportunity to make the nation's finances safer".

In Northern Ireland, it is the hope that there might even be a government which seems fantastical. While the DUP continues to boycott Stormont for its own narrow and selfish interests, secretary of state Chris Heaton-Harris's punishment budget has cast unelected civil servants in the invidious position of finding £800 million in cuts and additional revenue this year.

At the same time that the Dublin government was examining options of what to do with its swelling coffers, in Belfast the Department for Communities became just the latest to warn the public about its funding gap.

The Stormont department, whose responsibilities include social security delivery, employment support and culture, arts and leisure, says its allocation is £111.2 million, or 15.5 per cent, below what it needs.

This means it may be able to support only 1,400 new social housing units this year, instead of its 2,000 target. The department says it has almost 600 staff vacancies, but will now only undertake essential recruitment. Discretionary support grants look likely to be cut. And so it goes on.

The Republic's good fortune is mostly the result of a corporation tax bonanza, largely from the giant US firms like Apple which have based themselves in the Republic.

International tax policy is a vexed area, but there is little doubt that courting multinationals has been key to the south's success. This emphasises the importance of seeking out and maximising any advantage in a globally connected economy.

The Brexit disaster – as championed in its hardest form by the DUP, of course – was the exact opposite of this, although the Windsor Framework has the potential to repair some of the damage by putting Northern Ireland businesses in a unique position.

Sensible options for Mr McGrath include building homes to meet the Republic's dire housing shortages.

But infrastructure should be in the mix too. Boosting the Shared Island fund could see Dublin fund much-needed strategic projects, including those which are well beyond Stormont, such as upgrading the A5.

Transforming relations across Ireland could be the biggest legacy of the Republic's budget surplus.