Gavan Reilly: The Apple ruling is the start of the iProblem

Well, well, well. What a time to be alive: three weeks before a Budget, the last one of a coalition fraying apart, and now the powers-that-be order it to take a €13 billion windfall…that it doesn’t actually want!

Those hoping for 36,000 new luxury bike sheds around the country might need to pause for breath. Back in 2016, even as Ireland began its legal appeals at the European courts in Luxembourg, Michael Noonan raised two caveats. Firstly, he said, the Commission believed other countries might also have a claim to some of the money: if revenue from sales across Europe was inappropriately funnelled through Ireland, other countries might argue that much of the cash now being taxed should have gone through their national tax systems instead. A maze of other transnational claims could now follow.

Secondly; under fiscal rules that we adopted in the referendum of 2012, one-off windfalls like this (even if it’s just the delayed processing of what should have been routine tax) are considered just that - windfalls - and the revenue has to be channeled towards debt reductions. That rules out the idea of simply splurging the cash on other pre-election niceties, or even on long-term infrastructure.

In America, they call pre-election bombshells like this the ‘October surprise’ - something unexpected that materially changes the political mood. Don’t be at all surprised if this makes a dent in the opinion polls: the biggest grievance about the Sinn Féin housing plan is its sheer cost, it’s hard for the government to counter it when it has just mounted an eight-year campaign to resist an extra windfall. The budget was already going to be a tricky exercise in expectations management. Now, simply any unmet demand will simply be labelled as ‘something Apple could have paid for’.Danger here…