Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I thank the Chairperson and the committee for the opportunity to discuss the current framework for parliamentary engagement in the budgetary process. I welcome the opportunity to discuss the committee's report and look forward to the discussion we will have.

At the outset we can all agree that there has been much progress in our broader approach to the national fiscal framework over recent years and I want to assure the committee that I and my Department will continue to play a constructive role going forward, both formally and informally. To put this in context, it would be useful to briefly highlight the main reforms to our budgetary framework.

I have spoken on many occasions about the importance of our institutions. Independent, analytically-robust and respected institutions perform an invaluable role in any democracy. In this regard, perhaps the most important reform to the fiscal framework in recent years has been the establishment of the Irish Fiscal Advisory Council, IFAC. The council provides a crucial input to the budgetary process, providing an independent assessment of my Department’s economic and budgetary forecasts, the stance of fiscal policy and compliance with the fiscal rules. In terms of the economic projections that underpin Government policy, a transparent, rigorous process precedes both the budget and the stability programme update forecasting rounds. Additionally, the scrutiny of Government policy provided by the council is now firmly embedded within our budgetary architecture. I know that this committee’s deliberations with the council have provided a broader context for my engagement with this committee.

Another important reform initiated in recent years is the national economic dialogue. This is now firmly part of the annual budgetary cycle although, unfortunately, it was interrupted this year. The dialogue is normally preceded by the publication of the summer economic statement which sets out the main parameters of the budget. I will say more about this later. The dialogue provides an opportunity for all stakeholders to participate in an open and inclusive exchange on the competing economic and social priorities facing the Government.

Each summer my Department also oversees the circulation of the tax strategy grouppapers to the relevant sectoral Oireachtas committees. This group comprises representatives from various Government Departments, political advisers and politicians in government. The papers that are published on our website are a stock take of existing tax measures and include issues for discussion and costed options for change. Finally, the establishment of this committee itself is also an important reform to the budgetary infrastructure.

Turning now to the committee’s interim report, many of the issues raised have been covered by my colleague, the Minister for Public Expenditure and Reform, and I will not repeat what he has already said. As the committee will be aware, the programme for Government outlined the Government’s objective of developing better measures of quality of life and well-being. Connected to this is the Government’s commitment to expand equality budgeting. In this regard, I am engaging with my colleagues, the Minister for Public Expenditure and Reform and the Minister for Children, Equality, Disability, Integration and Youth, on next steps in this area.

In terms of the further development of well-being measures, this will be guided by an expert group convened through the Department of the Taoiseach. My officials have been engaging with their counterparts in the Departments of the Taoiseach and Public Expenditure and Reform in order to further develop the technical aspects of this work. My Department published a paper entitled Wellbeing and the Measurement of Broader Living Standards in Ireland alongside budget 2021. The paper examined the development of international approaches to well-being and looked at options for national well-being measurement in Ireland. The purpose of these measures will be to complement existing economic tools and measures and not to replace them. It is hoped and anticipated that these new measures can serve over time as a useful reference for a range of policy and budgetary reform initiatives which are currently under way, including performance budgeting, equality budgeting, spending reviews and proofing of policy proposals against environmental and other goals. On green budgeting, the Department of Public Expenditure and Reform has already incorporated green budgeting practices into its expenditure analysis in recent years.

I will conclude on the summer economic statement as it concerns one of the recommendations in the interim report.

In a nutshell, the summer economic statement is a vehicle in which the available level of resources for the year ahead is communicated to the Oireachtas and to the general public, taking into account the need to ensure sound budgetary practice.

I am aware of the views of the committee on the fact that it was not possible to produce this document last year. I wrote to the Chairman outlining the reasons for this. I believe the SES is an important staging post in advance of the annual budget and I have been in front of the committee on many occasions to discuss it. I will continue to accommodate the committee in terms of future attendance. It is my expectation that the SES will be published over the summer. We will have to engage in government on the format and role of the SES. I look forward to engaging with the committee at the appropriate time.

Having said that, it is important as we look at the SES to highlight the voluminous amount of economic and fiscal analysis published by my Department over the course of any year. For example, we recently launched the annual debt report some weeks ago to highlight the many issues, positive and negative, associated with the accumulation of public debt.

In conclusion, I believe it is fair to say that the budgetary processes have evolved significantly in recent years. Notwithstanding the challenging times we are in, the Government shares the committee's view of ensuring we have an open, transparent and engaged budgetary process. Sound, counter-cyclical budgetary policy is at the heart of a well-performing economy and a fit-for-purpose budgetary framework is a key part of this. I remain committed to assisting the committee in its work and look forward to engaging with it.