Oireachtas Joint and Select Committees
Wednesday, 22 September 2021
Committee on Budgetary Oversight
Pre-Budget 2022 Scrutiny: Irish Fiscal Advisory Council
I welcome the council members, as usual. I just have one criticism to make. I have enjoyed reading the report but we got it far too late. Maybe they do not expect us to read anything beyond the summary but there are 70 pages in it. I got an opportunity this morning to start reading it. I found it really interesting.
The summary captures it. Mr. Barnes managed to incorporate what I saw as some of the key elements into his opening statement.
There is so much in this. I have said to the Chair previously that I like to take a non-partisan approach in the Oireachtas Committee on Budgetary Oversight and assume the role of an outside onlooker who is trying to represent the best interests of all of the people. Terribly noble and all as that sounds, I mean not to take a political approach to it.
Here we are again. This is the fifth annual pre-budget report stating we cannot rely on corporate tax. It is truly appalling that governments have failed to deal with this. The first steps were taken in budget 2020. That is very regrettable.
The rainy day fund had been suggested in 2016. Even the worst critics of the former Minister, Mr. Charlie McCreevy, would say he had the special savings interest account, SSIA, scheme developed to try to stop people spending and to put some of their money away so that it would not boost the economy. There was €20 billion in the National Pensions Reserve Fund which helped to reduce the impact of the crash, although not by much. We have no such measures in place at present.
They mentioned human resource shortages and challenges. I do not know if we are fully across that yet or if we fully know what the impact of material shortages will be. It seems to be much more acute in terms of materials in some other countries and I am wondering why that is.
There is so much to respond to but I want to make one point to the Irish Fiscal Advisory Council, IFAC. I think IFAC could help the budgetary oversight considerably in this. It was a suggestion made by Mr. Mark Little, the former RTÉ correspondent, Washington correspondent and general bright guy. IFAC is covered to comment on this under its role of assessing the fiscal stance. We have, as a budgetary oversight committee, in the past number of years looked at gender-proofing budgets. The only way to politically protect decision-making in budgets is a suggestion Mr. Little made, not for that reason but to future-proof budgets. Ministers of the day need to be held to account for budgetary decisions they take now that will have a negative or disproportionate impact on generations coming down the track. If that became an institutionalised requirement, it would help to head off some of these things that IFAC has pointed to.
Personally, I will be looking for spending on MetroLink and all the rest of it, and fighting for the budgets that are available. That is the politics side of the House and I accept that. I do not see any contradiction in it. To be quite honest, nobody anticipated tax cuts after the year and a half we have been through. They see the State heading for a €250 billion debt. They see the State having honoured that unwritten contract between itself and its citizens and their families and non-citizens to protect them when times get really tough. The State stood up to that challenge and the public recognise there was a huge cost to that.
I would like to see the future-proofing of budgets. I will return to this theme. Every Minister for Public Expenditure and Reform, every Minister for Finance and every Department head and Minister will have to ask what will be the impact of this decision on an 18-year-old, on a 25-year-old, on a 30-year-old, etc., and whether it will incur a disproportionately heavy debt burden on them on top of the climate action burden that is already on their shoulders to carry. I am off my soapbox there but I will come back to it.
Mr. Barnes does not mention Brexit. He might comment on that. I was very taken with his final comments about climate action that this could end up being much more costly than we anticipated. Mr. Barnes gives some figures there and some context to it. There are three issues I would like responses on. What are IFAC's views on Brexit, the future-proofing of budgets and the climate action piece? I ask Mr. Barnes to develop that theme a little more.