Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I recall Deputy Doherty proposing this amendment on Committee Stage of the Finance Bill earlier this year. His colleague, Senator Reilly, raised it as a Seanad recommendation. I recall also that we had a long and interesting discussion on this issue on the last occasion. Fundamentally, my position remains unchanged and I do not believe there is a great deal of difference in principle between us. Analysis can play a very important part. It should not, however, be applied to everything, particularly in instances where we do not deem it necessary. If the cost in terms of time and resources is totally disproportionate to the yield from the analysis, we do not do it.

This Government has carried out more economic impact assessments in respect of tax proposals than any other. Of course, there is also a concept in politics and public administration which is generally summed by the phrase, "the paralysis of analysis". We do not want to get into that situation. The Government must govern. We can look at things all our lives but there is a principle of proportionality. The level of resources invested in carrying out the analysis should be commensurate not only with the scale of expenditure involved but the scale of resources available, not least the demands already placed on those resources in the preparation of budgets and finance Bills. Therefore, I am not in a position to accept the amendment. We do review budgetary measures periodically. We had a full review of the research and development tax measures, the film industry incentives and the building and development tax incentives. In this budget, I announced a full review of all those tax incentives for farming and the agriculture sector so we have reviews.

The ESRI does a lot of very good work, which we very much appreciate, but its model does not take all budgetary decisions into account. It gives a partial analysis of the budget and people taking the ESRI model attribute too much to it. The Deputy is probably aware that the programme for Government contains a commitment to require all public bodies to take due note of equality and human rights in carrying out their functions. Furthermore, the Cabinet handbook requires a statement on the likely effects of the decision sought on equality and persons experiencing or at risk of poverty or social exclusion to be included in memoranda to Government. Consequently, the Government does consider each of those important issues at an individual policy or programme level. Furthermore, I remind the Deputy that the State and its bodies take the provisions of equality legislation into account in the development and delivery of policies and services.

I would also like to inform the Deputy that distributional analysis of taxation measures is performed based on various income levels for the different categories of income earners. These categories include single individuals, married one-earner couples with no children and married one-earner couples with children. A distributional analysis which models the impacts on disposable income by income decile using SWITCH, the ESRI tax benefit model, is also undertaken in evaluating various taxation options. Illustrative examples continue to be included in the budget documents.

In future, as part of our annual budget, Ireland will submit a draft budgetary plan to the Commission no later than 15 October. This is a requirement of Regulation (EU) No 473/2013, which specifies that all euro area member states not in a macro-economic adjustment programme will be required to submit this plan. As part of the materials supplied, Article 6(3)(d) requires that, where possible, indications on the expected distributional impact of the main expenditure and revenue measures should be included. This distributional analysis will be conducted using the SWITCH model, as has been the case in previous budgets. Information contained in the draft budgetary plan sent to the Commission will also be included and the budget booklets will be distributed to Members of the Oireachtas. As the Deputy said, European policy is moving in the direction he advocates and we will be moving in that direction as well and submitting some of the elements he is requesting in his amendment in our submission to Brussels before the 2015 budget not later than 15 October 2014.

Last Friday, we had the first meeting in Brussels on the new arrangements. We were not included in the review because we are still a programme country but 13 states were included. Only two of them got a completely clean bill of health on what they submitted. There will be some post-programme supervision of Ireland but it will generally be the same as that which applies to all members of the eurozone. The movement is in the direction advocated by the Deputy. I do not have a big difference of opinion in principle with what he is saying. My difference of opinion relates to issues like cost-effectiveness and taking a sledge-hammer to crack a nut. It relates to whether we can get the information without a major cost-benefit analysis and some of this is readily available both from Revenue and the ESRI.