Vice Chairman (Deputy Liam Twomey):

I welcome the Minister for Finance, Deputy Michael Noonan, and his officials. The purpose of the meeting is to consider the Fiscal Responsibility Bill 2012 which was referred to the select sub-committee by Dáil Éireann on 11 October. Is it agreed to conclude consideration of the Bill today? Agreed.

Liam Twomey (Wexford, Fine Gael)
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Amendments Nos. 1 and 2 are out of order.

Pearse Doherty (Donegal South West, Sinn Fein)
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I am disappointed that the amendments have been ruled out of order. This goes to the crux of the Bill, regarding the requirements contained therein to enshrine in domestic law the austere rules contained within the austerity treaty. I had tabled a proposal that instead of committing the Government to imposing such budgetary rules, in the future it would have an option to impose them. This is bad practice and members should be aware that, with the Government, they are binding the hands of future Governments, of whatever shape, composition or political persuasion, to implement these rules. This is a sad day for democracy because the people will no longer have the say on whether they will adhere to or deviate from these rules as the legislation will bind their hands.

Michael Noonan (Limerick City, Fine Gael)
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The people, in a referendum, accepted the stability treaty on 31 May. Any amendment that would allow the Government to choose not to abide by the fiscal rules would run counter to a decision of the people. Consequently, it is the Deputy's amendments that are anti-democratic, rather than the position being taken in the section.

Pearse Doherty (Donegal South West, Sinn Fein)
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I query the reason amendment No. 2 has been ruled out of order and seek an explanation.

Liam Twomey (Wexford, Fine Gael)
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There is a general note which states the purpose of the Bill is to give legislative effect to key provisions of the stability treaty which has already been ratified by the State related to fiscal policy rules, a budgetary rule, a debt rule and a correction mechanism, if there is a significant deviation from the budgetary rule. This requirement is binding and mandatory on the State as a consequence of ratification of the treaty.

Pearse Doherty (Donegal South West, Sinn Fein)
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The legislation goes further than implementation of the rules of the austerity treaty. As members are aware, the Irish Fiscal Advisory Council is part of it, as the reporting mechanism and what the Government would be obliged to do in responding to the advice of the council also are included. I am not questioning the ruling but simply seeking clarification of the rules. However, the Minister has stated the people passed the treaty in a referendum. He is correct in stating this and I do not dispute that the austerity treaty was passed in a referendum. However, this legislation has not been put before the people and in amendment No. 2 I sought the inclusion of the proviso, "so long as such compliance is conducive to the social and economic development of the state”. I cannot understand the reason parliamentarians would not agree to include such a measure. The outworking of not accepting the amendment is that the rules should be implemented, even when it would not be "conducive to the social and economic development of the state".

Liam Twomey (Wexford, Fine Gael)
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I will read the notes on these two amendments for the Deputy.

Pearse Doherty (Donegal South West, Sinn Fein)
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My question was directed to the Minister.

Michael Noonan (Limerick City, Fine Gael)
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When a change to the Constitution is accepted by the people and the Constitution is amended, obviously the constitutional amendment restricts the type of law that can be proposed by the Executive to the Parliament. Moreover, it restricts the type of law that the Parliament can endorse because it must accord with the Constitution which, as I understand from what the Vice Chairman has read, is the principal reason the Deputy's amendment has been ruled out of order. In addition, there is no question of doing anything of which the public was not aware. As the Deputy will recall, the general scheme of the Bill was published in the course of the debate on the treaty.

The public were aware of the detailed legislative consequences if they voted "Yes" in the referendum and the Bill is the legislative consequence.

Pearse Doherty (Donegal South West, Sinn Fein)
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By not including the text that we would implement the rules only if it was conducive to the social and economic development of the State, it is an admission that we will implement them regardless of whether it is conducive to the social and economic development of the State. This is a big problem concerning the path the Government has been following. We have been focused very much on targets, irrespective of the damage caused to the domestic economy, including employment. This has encouraged more young people to leave the country and is causing hurt to families and communities. Not only is the Minister ensuring we will continue to follow these strict targets, but he is also binding the hands of future Governments, irrespective of whether it is conducive to the social and economic development of the State. It is appalling that parliamentarians would enshrine in law such austere rules that do not take into account the impact on citizens whom we are elected to represent.

Michael Noonan (Limerick City, Fine Gael)
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The purpose of the legislation is exactly to bind the hands of this and future Governments in so far as the fiscal rules are concerned. It is to ensure future Governments will not go crazy, as it was alleged a previous Government had. Fiscal rules that are subject to subjective interpretation by individual parties or Deputies are absolutely useless. The criteria must be objective and subject to objective tests, otherwise rules are of no use. The Deputy's formula is so subjective that it is a matter of opinion whether a particular measure is conducive to the future economic or social development of the country. In particular, once one introduces the idea of social development, one can have many varying views of what is in the best interests of social progress in the country. However, it does not provide a set of fiscal rules which bind the hands of future Governments when preparing budgets. That was the purpose of the referendum and the treaty and is the purpose of the legislation.

Pearse Doherty (Donegal South West, Sinn Fein)
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My final point-----

Liam Twomey (Wexford, Fine Gael)
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I am sorry, but I do not want to hear too much more. I will read the note on section 2. It sets out the mandatory duty of the Government to endeavour to comply with the fiscal rules set out in Articles 3 and 4 of the treaty. Amendments Nos. 1 and 2 proposed to modify this obligation to delete the words "shall endeavour to secure the fiscal rules" and substitute "may decide to secure the fiscal rules so long as doing so is conducive to the social and economic development of the state". The amendments have been ruled out of order.

Pearse Doherty (Donegal South West, Sinn Fein)
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I accept that, but I am speaking to section 2, not the proposed amendments. The Minister has said the purpose of section 2 is to bind this and future Governments to rules in order that we do not go crazy in the future. There is no doubt that there was an element of craziness to what happened during the boom time. The Fianna Fáil-Green Party Government inflated the property bubble. Meanwhile, the Financial Regulator was asleep as the banks were giving easy money. In addition, the European banking system had low interest rates. Therefore, there was an element of craziness.

Further to what I said on Second Stage, will the Minister clarify which one of the rules which will be binding in domestic legislation to tie the hands of future Governments would have prevented the catastrophe into which the State entered? Our debt-to-GDP ratio was well below the 60% target and up to 2008 we had a structural surplus. Therefore, which one of the rules would have stopped the craziness, as the Minister describes it, in 2008? The reality is that none of them would have prevented the crash. There would still have been a property bubble and Ministers would still have spent money like crazy because there was a structural surplus at the time. The Minister has presented the figures to me in the Dáil.

Michael Noonan (Limerick City, Fine Gael)
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The remarks I made were about the Bill as a whole and its connection with the treaty; they were not founded particularly on section 2. I will read the speaking note on the section to illustrate its scope. It requires the Government to endeavour to comply with the fiscal rules set out in subsequent sections. It also provides that the official macro-economic and budgetary forecasts prepared by the Department of Finance shall include all the data needed to assess if the Government is complying with the budgetary rules.

As regards the Deputy's question, the legislation is for the future, it is not to correct past mistakes. However, we can learn from the past when designing the rules. That is what has happened. There is now general agreement that what were deemed to be surpluses when one thought the country was going very well were not structural surpluses at all. There were so many transactional taxes in the mix that one was looking at structural deficits. There was a misunderstanding of what was the actual position. The concept of structural surpluses and deficits has only recently come into the general debate in the Dáil. If it had been included in the debate at the time arising from fiscal rules, the Government of the day might have had a different take on what was happening. There was no doubt it genuinely believed things were going very well. On a structural basis, however, they were not because so much of the revenue was based on transactional taxes which would rise and fall with the property bubble.

Pearse Doherty (Donegal South West, Sinn Fein)
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This goes to the core of the section which, as the Minister said, will stop the craziness. Up to 2008, before the economic collapse, the State was in compliance with the rules enshrined in domestic legislation. The Minister has a valid point in questioning whether there was an actual structural surplus at the time, given the volume of transactional taxes. The figures were accepted by the European Union; they were not questioned. It is a false premise to argue that this section which deals with the two basic rules of the austerity treaty - the debt rule and the deficit rule - would have prevented the collapse. It would not have done so. Up to 2008 we were being cheered on by the European Union because we had surpluses. The Minister has made a valid point about the structural surplus, which was not actually a surplus and should have been calculated differently. During the treaty debate the question was asked many times as to how one could define a structural surplus or deficit. That is what we are seeking to include in the Bill in order that we reach a structural deficit target of 0.5%. Who will define the model to be used in calculating the structural deficit? Will it be the Department of Finance's or the European model that will be applied? Will the Minister make public the model he will use to calculate the structural deficit or surplus in the future?

Michael Noonan (Limerick City, Fine Gael)
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I do not think there is much point in my spending a Thursday afternoon relighting the referendum campaign. The fiscal treaty was not designed to correct bad practice in Ireland; rather, it was designed to provide fiscal rules across the eurozone and has now been endorsed by all parliaments in the eurozone. It is not designed specifically to fit an Irish case. The rules are important, but they are part of a general sequence of events. We have the six pack, the European semester, the two pack and the stability treaty. As views develop across Europe, we are moving all the time towards a tighter set of fiscal rules. That is because the looseness of the fiscal position in countries on the periphery is deemed to be the primary cause of the current crisis. Therefore, there has been a reaction to this. Part of the wholesale reform package is the six pack, as well as the introduction of an expenditure benchmark to limit growth in general government deficits.

Pearse Doherty (Donegal South West, Sinn Fein)
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My question was how would we define the model to be used in calculating the structural deficit. Will it be defined by the Department of Finance or will the European model be used? Will the Minister publicise how the structural deficit will be defined?

The Minister has suggested that the structural deficit, in how it was calculated in 2007 and previous years, was probably inaccurate. He is asking to enshrine in domestic legislation - forget about the treaty debate - a rule here and I want to know how that rule will be calculated in future.

Liam Twomey (Wexford, Fine Gael)
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That is the last contribution because we are drifting a little too much here.

Pearse Doherty (Donegal South West, Sinn Fein)
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The structural deficit is central to this section.

Liam Twomey (Wexford, Fine Gael)
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I want to bring in other members as well.

Pearse Doherty (Donegal South West, Sinn Fein)
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That is fair enough.

Michael Noonan (Limerick City, Fine Gael)
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Deputy Pearse Doherty is trying to justify what many thought were fairly ludicrous positions he took during the referendum campaign. Once the people have decided, I see no point in having a replay. There is no possibility of a replay. It is over and now we are legislating.

Pearse Doherty (Donegal South West, Sinn Fein)
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Will the Minister answer the question? How will we calculate the structural deficit? Section 2 refers to compliance with "the requirement imposed by section 4 (the debt rule)," and the budgetary rule. How will the Government calculate them? If the Minister does not know how he will calculate the structural deficit, he need only tell us. I do not want to replay the referendum but this is about the legislation that the Minister is asking us to pass on Committee Stage. How will the Government calculate the deficit rule? The structural deficit is central to the Bill.

Michael Noonan (Limerick City, Fine Gael)
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The Deputy will be aware since the referendum campaign that there is a harmonised European methodology which will examine and estimate the structural deficits or surpluses for all countries in the eurozone, and we will comply with that.

Michael McNamara (Clare, Labour)
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As I understood it, the referendum was an enabling clause that the State may ratify. Is there anything to prevent a future Government led by Deputy Pearse Doherty or somebody else from rescinding the treaty and repealing this legislation? There is much talk about democracy and lack of democracy. Surely it is a matter for future Governments to rescind or change any Finance Act if it chooses to.

Michael Noonan (Limerick City, Fine Gael)
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One could do so but one would have to go back to the people if one wants to change the Constitution. Then there is no problem.

Michael McGrath (Cork South Central, Fianna Fail)
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I have one question on the issue that was being discussed, the structural balance. The Minister made some interesting observations with which I largely agree about the interpretation of structural balance during the boom years. The key question is this: is the Minister now satisfied that the understanding of what a structural balance means has evolved to the point where if a situation prevailed where one had transient taxes and the revenue base was clearly inflated by a bubble-type scenario, the structural balance would identify that and strip it out as such? Can he give us the reassurance that such is now built into the methodology?

Michael Noonan (Limerick City, Fine Gael)
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Sufficient methodology has been developed to identify and quantify the problem. Stripping it out would require political will, and that is another day's work.

Michael McGrath (Cork South Central, Fianna Fail)
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I mean in the calculation.

Michael Noonan (Limerick City, Fine Gael)
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Yes.

Michael McGrath (Cork South Central, Fianna Fail)
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There is a definition of exceptional circumstances, which is in the treaty which was ratified by the people and which is in the definitions in Part 1 of the Bill. It is central to the matter in that if exceptional circumstances exist, then the Minister is allowed to deviate from the requirement to move towards a structural balance of 0.5% of GDP. Can the Minister give us the sense of what would be deemed to be exceptional circumstances in the case of Ireland? Also, based on the current projections, over what period of time will we be moving towards a structural deficit of 0.5% of GDP?

Michael Noonan (Limerick City, Fine Gael)
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Usually exceptional circumstances are difficult to foresee. If one takes a recent exceptional circumstance, who would have foreseen that an earthquake in Japan would have led to a tsunami which led to a nuclear accident? Exceptional circumstances, by their nature, are hard to foresee. If they were foreseeable they might not happen because one would take preventative measures.

As outlined in the interpretative section of the Bill, "exceptional circumstances" refers to a period where there occurs an unusual event which is outside the control of the State and which has a major impact on the financial position of the general Government. The phrase can also refer to any unusual economic circumstances such as those in which we currently find ourselves. It is further specified that "exceptional circumstances" must be defined within the meaning of the Stability and Growth Pact to ensure we are complying with the essence of the pact.

In the event of a situation occurring which we believe is exceptional circumstances, we will set out our case to the Commission in our stability programme update. Our case will take full account of the assessment of the fiscal council under section 8(3)(a) as to whether exceptional circumstances exist. The process that follows is that the Commission, in its assessment of our special SPU, decides whether or not exceptional circumstances exist and ultimately includes a recommendation to ECOFIN, which is the final arbiter of whether the situation comes within the definition of exceptional circumstances.

It is very difficult to provide a clear and unambiguous definition of this phrase. Rather than creating a definition which would be inconsistent with the treaty definition, the best course of action was to follow closely the definition provided by the treaty.

The treaty and the legislation, and the other fiscal measures which have now been adopted in Europe, do not put the country on automatic pilot. The country must still be run by the Government and by the administration. Exceptional circumstances will be open to interpretation at the time but there is a methodology for working out and agreeing with, finally, ECOFIN whether exceptional circumstances exist or not.

Liam Twomey (Wexford, Fine Gael)
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Amendment No. 3 in the name of Deputy Pearse Doherty has been ruled out of order. Section 4 provides for the mandatory compliance with the debt rule requirement under Article 4 of the treaty. Amendment No. 3 proposes to modify this obligation by proposing that the debt rule be complied with "so long as doing so is conducive to the social and economic development of the State".

Pearse Doherty (Donegal South West, Sinn Fein)
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Section 4 requires us, in line with the treaty, to reduce that portion of debt above 60% of GDP by one-twentieth each year. My understanding is that this rule would come into force in 2018. Has the Department calculated projections of the growth rates and inflation that would be required for Ireland not to impose additional austerity budgets on the people? What level of growth is required in that period so that the one-twentieth rule would not have an impact on our budgetary calculations?

Michael Noonan (Limerick City, Fine Gael)
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Section 4 deals with the debt rule specified in Article 4 of the stability treaty. The requirements of the debt rule are already law under EU Regulation 1467/97, as amended under the European six-pack of reforms. However, as the debt rule is specifically included in the stability treaty, we are providing for its implementation in domestic law through this Bill. The text accomplishes this by direct reference to the relevant EU regulation. This eliminates the possibility of drafting a provision that could be inconsistent, and ensures better adherence to the regulation. The EU regulation states that debt in excess of the 60% debt-to-GDP ratio must be reduced by at least one-twentieth per year based on changes over the last three years. It goes on to provide for a transition period for member states, including Ireland, that were subject to an excessive deficit procedure on 8 November 2011. This transition period means that the general rule will only apply three years after the correction of the existing excessive deficit. Our existing excessive deficit will be corrected in 2015 when our general Government deficit is targeted to be just under 3% of GDP. This means that the one-twentieth rule will apply in 2019, not 2018. In the meantime, it is required that there be satisfactory progress in reducing the debt-to-GDP ratio and this will be assessed by the Commission and ECOFIN.

As to the Department's estimates of the future growth rates, it is difficult enough to forecast growth rates for a short period ahead.

There is quite a variation among the forecasts, even for the remainder of this year. The IMF forecast is 0.5% or 0.6% and our budgetary forecast is 0.7%, whereas the ESRI, which is a very reputable organisation, is forecasting 1.8% this year. That seems to be the outlier. When one projects out to 2019, it becomes difficult. The Central Bank and the fiscal council has conducted an analysis which suggests that complying with the budgetary rule will also ensure that we comply with the debt rule. In other words, they expect sufficient growth within the system to avoid the need for direct action as we approach 2019. These statements are tenuous, however, and if one examines the current position one will see a number of moving parts over a much shorter period than between autumn 2012 and spring 2019, which is a long stretch of time in the context of our current crisis.

Pearse Doherty (Donegal South West, Sinn Fein)
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Section 4 does not include the condition in section 3 which allows the budgetary rule to be waived in exceptional circumstances. There is no such provision in respect of the debt rule. Even in the event of exceptional circumstances involving significant increases in debt, slow growth or contraction of the economy we would still have to comply with the one 20th rule. We all hope there will be sufficient growth in the economy for the rule to take care of itself but in the event of requiring an exception in five, ten or 15 years’ time because of high debt to GDP levels or a contracting economy, we would have to set aside money in our budget to reduce that debt. Does the Minister believe that an exception should be allowed?

Michael Noonan (Limerick City, Fine Gael)
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Exceptional circumstances are provided for under article 3 of the treaty in respect of the budgetary rule. As the debt rule is not similarly provided for, we are reflecting the treaty position in the legislation. The debt rule is based on a three year average, which means it is not as absolute and there is thus less need to include the exceptional rule. I am not sure of the legal position but I assume the fact that it is not written into the treaty offers more flexibility. Under the budgetary rule states must prove that exceptional circumstances have arisen but if the treaty is silent on the debt rule and one decides that exceptional circumstances apply, there will be opportunities to enter into bilateral negotiations with the Commission and a decision by ECOFIN in a slightly looser arrangement.

The analysis by the Central Bank and the fiscal council indicates that if we meet our obligations under the budgetary rule, the debt rule will come right without further specific action. We are basing our work on that assumption at present and we will continue to do so until the evidence suggests we should take a different course of action.

Pearse Doherty (Donegal South West, Sinn Fein)
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Assumptions can be very dangerous. We are enshrining these provisions in domestic legislation and they will apply not just between 2019 and 2021 but indefinitely. We do not know what will happen to the economy or what type of exceptional circumstances will arise. I question the Minister’s judgment in regard to whether we will get more flexibility because it is not written into the Bill. While the provision is linked to the treaty, it will be on the Irish Statute Book if the Bill is passed by the Houses of the Oireachtas and signed by the President. It will compel us to reduce the deficit in line with regulations at European Union level. Exceptional circumstances are open to interpretation and if provision was made for them at least there could be scope for discussion with our European counterparts. I hope exceptional circumstances will not arise but I ask the Minister to consider introducing amendment on Report Stage that would comply with the treaty.

Michael Noonan (Limerick City, Fine Gael)
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The democratic sequence is that the people changed the Constitution by way of referendum to enable the treaty to be passed. As we legislate we must reflect the terms of the treaty. While exceptional circumstances are provided for in one article, they are not mentioned in the other. If we were to include exceptional circumstances in the legislation we would be going beyond the treaty. I am not saying that would be unconstitutional but there would be discordance between the provisions of the treaty and the legislation and it might be a source of temptation to those who want to go to the Supreme Court once more. We must be careful to mirror the treaty in the legislation and not go beyond it because the treaty is what the Irish people decided on.

Michael McGrath (Cork South Central, Fianna Fail)
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The medium-term budgetary objective is a structural deficit of 0.5%. The debt rule is prescriptive in requiring us to reduce the excess over 60% by one 20th every year. In order to keep to the adjustment path, the headline rate must reach 3% by 2015. What is the period over which we are going to reach the structural deficit of 0.5%?

Michael Noonan (Limerick City, Fine Gael)
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Our commitment is to be at less than 3% by 2015. The fiscal council examined this issue recently and suggested that, based on the current stability programme update and a number of technical economic assumptions, including tight expenditure control, Ireland may reach its medium-term budgetary objective as early as 2019. However, this forecast must be treated with caution because the council highlights the uncertainty in predicting the structural position that far into the future.

Michael McGrath (Cork South Central, Fianna Fail)
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Has a timeframe been agreed with the European Commission for reaching the target of 0.5%?

Michael Noonan (Limerick City, Fine Gael)
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It is part of the dialogue.

Michael McGrath (Cork South Central, Fianna Fail)
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Has a year or a date been agreed?

Michael Noonan (Limerick City, Fine Gael)
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Apart from what I have put on the record already, no.

Michael McGrath (Cork South Central, Fianna Fail)
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The Minister merely indicated that, in the opinion of the fiscal council, we may reach the target by 2019. That is not an agreed position between the Government and the European Commission.

Michael Noonan (Limerick City, Fine Gael)
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As I noted earlier, it is difficult to forecast so far ahead.

Michael McGrath (Cork South Central, Fianna Fail)
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What input will the Government have on the critical question of the length of time it is allowed to achieve the structural deficit target?

Michael Noonan (Limerick City, Fine Gael)
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We will be the prime movers and, as in all relationships with Europe, it will be a matter of dialogue. The final arbiter will be ECOFIN, as always, but usually matters are decided at subsidiary level. It is only in the event of disagreement that matters are decided by ECOFIN.

Pearse Doherty (Donegal South West, Sinn Fein)
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I understand the difficulties that are inherent to long-term forecasts but the IMF has produced long-term forecasts on the structural deficit for the years after 2015. I do not have the figures to hand but it has suggested that the structural deficit in 2016 and 2017 will be considerable.

Could the Minister comment on that? I know it is contrary to other advice and the Minister mentioned the Irish Fiscal Advisory Council.

Michael Noonan (Limerick City, Fine Gael)
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We have some material here and I will supply the Deputy with a copy because a tabular statement accompanies it. The text says that the IMF also calculated the structural balance for Ireland but was allowed to vary its methodology to take account of country-specific circumstances. The text states that its estimates show that by 2015, the actual deficit of 2.8% is still larger than the structural deficit of 2.5%, suggesting that the economy will still be operating slightly below potential at that point. It does not make sense for me to read out the tables but I can certainly supply them.

Pearse Doherty (Donegal South West, Sinn Fein)
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Is it after 2015 in terms of the structural deficit because that is the key point? My understanding is that we have three years in which to reach the structural deficit target.

Michael Noonan (Limerick City, Fine Gael)
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We will provide the Deputy with that information.

Pearse Doherty (Donegal South West, Sinn Fein)
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I have the information in my office.

Michael Noonan (Limerick City, Fine Gael)
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I think we have it to 2015 and possibly slightly beyond it.

Liam Twomey (Wexford, Fine Gael)
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Amendments Nos. 5 to 11, inclusive, are related and will be discussed together.

Pearse Doherty (Donegal South West, Sinn Fein)
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I move amendment No. 5:

In page 7, subsection (2), between lines 4 and 5, to insert the following:
"(a) prioritise the generation of economic growth, job creation and delivery of high
quality public services,".

Liam Twomey (Wexford, Fine Gael)
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Could the Deputy explain all of the amendments?

Pearse Doherty (Donegal South West, Sinn Fein)
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Amendment No. 6 specifies that the budget rule be achieved in a manner that is in compliance with economic growth, job creation and the delivery of high-quality public services.

Amendment No. 7 stipulates that the plan shall outline how any revenue and expenditure measures will contribute to the objectives of greater income equality, social inclusion and poverty reduction. This echoes what I have already said, namely, that we need to take cognisance of what is happening to people and that while it is all fine and well to attempt to reach these targets, we must also bear in mind how these measures will contribute to Government-stated objectives.

Amendment No. 8 seeks to insert in page 7 of the Bill, between lines 14 and 15, a subsection stipulating that all revenue and expenditure measures contained in the plan must be subject to equality and anti-poverty impact assessments, the details of which will be published as appendices to the plan. Under this legislation and the treaty to which we have signed up, the Government will be compelled to put this plan before the Houses of the Oireachtas. This plan will include the nature and size of the revenue and expenditure measures to be taken. This is similar to what is in the troika plan, namely, how much money will be raised in tax and how much money will be cut from spending. It will also include the sub-sectors where these revenue and expenditure measures will take place. Like the troika plan, it will identify either social welfare, a household tax or other measures. However, while plans may be inching towards reaching their targets, they are failing in respect of the wider economy and the citizens. Nobody should shy away from the idea of having such a plan equality-proofed and subject to an anti-poverty impact assessment, particularly in a week where the Department of Social Protection released a report showing that one in ten people are suffering from food poverty. It is crucial that this type of assessment be carried out regarding what is happening to individuals.

Amendment No. 9 is very simple and stipulates that the plan would require the approval of the Houses of the Oireachtas. There has been considerable discussion and fancy footwork about reforming these institutions and ensuring the Opposition has a role to play and functions are enhanced. As I said on Second Stage, this plan is very similar to the troika plan. With regard to specifying the period over which these adjustments will apply, will it be one year or two, three or four years? The plan is also very similar to the troika plan in that it specifies the annual targets, the revenue and expenditure measures to be taken and the sub-sectors in which they are to be taken. It is crucially important that this plan would have the support of the Houses of the Oireachtas so amendment No. 9 says the plan shall only be adopted following the approval of the Oireachtas. Again, it is not something anybody should shy away from.

Amendment No. 10 relates to subsection (5) which stipulates that if the Government considers that a failure to comply with the budgetary rule is likely to occur, it may, within two months, prepare and lay a statement before the Dáil, outlining the steps the Government intends to take to avoid such a failure. Given that previous amendments that have been ruled out of order, I am surprised this one has not been ruled out of order. This amendment deletes that line and changes the emphasis. It proposes to delete all words including "outlining" in line 32 down to and including "failure" in line 33 and substitute the following: "outlining the reasons it considers non-compliance with the budgetary rule to be in the best social and economic interests of the citizens and the state". It changes the focus and says that if we believe the rules are not to be complied with, a statement should be laid before the Dáil stating why the Government believes it is in the best interests of the State and the citizens not to comply with the budgetary rules at this point in time.

Michael Noonan (Limerick City, Fine Gael)
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The policy issues raised in these amendments are of a much wider scope than the substance of the Bill. The Deputy has identified some of the issues that any Government would have to consider in preparing a correction plan or any budgetary plan. However, it should be noted that we are talking about a plan and not the actual detailed legislative budgetary proposals that will have to be brought before the Oireachtas in the normal manner. A key purpose of the Fiscal Responsibility Bill and the stability treaty is to correct budget imbalances where we have deviated from converging towards our medium-term budgetary objectives or the adjustment pact towards it or failed to comply with the debt rule. Section 6 of the Bill was drafted on the basis of the common principles as required by the treaty.

While the Government, and I am sure future Governments, will always seek to promote economic growth, job creation and the delivery of high quality public services, it is highly likely the deployment of a correction plan could result in unpalatable choices which may not be in compliance with the suggested amendments, at least in the short term. Sustainable public finances are a key element of sustainable economic growth. Giving priority to economic growth, job creation and delivery could prove to be an obstacle or a limitation on a Government's choice of actions which are needed to ensure sustainable public finances. In working to ensure the sustainability of public finances any Government would have to have all possible levers of policy available to it. Additionally, each budget day the Government publishes illustrative cases showing the effect of major changes in revenue and certain social welfare payments on various categories of married, civil partners and single income earners.

With regard to requiring Oireachtas approval before adopting the plan, I note amendments which could result in the contravention of our treaty obligations cannot be accepted. The stability treaty requires the triggering of a correction mechanism if there is a significant deviation from the medium-term objective or the adjustment path towards it. Furthermore, non-compliance with budgetary rules would contravene the stability treaty.

Pearse Doherty (Donegal South West, Sinn Fein)
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I have tabled a number of amendments and I will try to deal with them. The Minister mentioned an adjustment plan could most likely result in unpalatable choices. This would not be in line with the amendment I tabled, which is that the plan should prioritise economic growth, job creation and high-quality public services. Perhaps we should prioritise the plan we are in at present. As recently as this week the troika stated while the plan may be reaching its targets it is failing, and there is no doubt it is failing people and the domestic economy. I do not know why there is stubbornness about changing the plan. I am afraid the Minister and the Government are focused on adjustments without recognising that if we were to prioritise economic growth or job creation - with more than the spin coming from the Government - and lift people out of unemployment, take them off social welfare and put them into the workforce so they would pay tax and increase their spending power in their local communities it would result in closing the deficit. It is very disappointing but not surprising that the issues of job creation, public services and economic growth do not get a mention in the plan.

With regard to requiring approval by the Houses of the Oireachtas, I dispute and challenge the Minister's assumption this would not be in compliance with the treaty that was passed. As the Minister rightly said, the treaty has placed an onus on us to trigger a correction mechanism to be decided by the Parliament. The treaty does not specify in what shape this correction mechanism would take, although it includes the four points laid down in the correction mechanism. It does not rule out the Houses of the Oireachtas being required to approve this correction mechanism. I challenge the Minister's assumption that the treaty subverts democracy and that a future Government or Minister for Finance can lay before the Dáil a troika programme committing the country to huge austerity through unpalatable decisions taken by a Government without seeking the approval of the Houses of the Oireachtas. This is a major retrograde step. I recall the four-year plan introduced by Fianna Fáil was forced to a vote in the Dáil. The Minister and his party called for approval by the Houses of the Oireachtas and the troika programme itself was put before the Houses. This would keep in line with what has happened so far. I challenge the Minister's assumption that this would not be in line with the treaty.

The Government is running scared of poverty impact analysis. One can see very clearly the adjustments made so far have hit hard on a section of society which is impoverished, and it is not only the stereotypical idea one has of people who are poor. There is now a huge squeeze on the middle. We are all aware of the "Liveline" programme and the piece on the news about an individual who stole food to feed his children. Very few Irish people have not at one stage in their lives sang "The Fields of Athenry" about a man who stole Trevelyan's corn so his children could see the morning. To think an individual is doing the same thing in 2012 as somebody did two centuries previously is appalling. Perhaps if poverty and equality impact assessments were done on the budget positions put forward by the Government we would not force people down this path.

I challenge some of the statements made by the Minister but I understand he will not accept these amendments. I will not press them.

Michael Noonan (Limerick City, Fine Gael)
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The Deputy's comments are interesting but they are well outside the scope and scheme of the legislation and outside the treaty. His claims about social and economic assessments are subjective and I do not blame him for this. My reading of the Sinn Féin economic paper suggests to me that it risks putting another 100,000 people out of work rather than creating jobs but Deputy Doherty will claim the contrary. The point I am making illustrates the difficulty of putting a subjective economic plan into a legislative framework. As it is outside the scope of the treaty I do not think even if we could agree on the terms it could be done.

I refer the Deputy to Article 3.1(e) of the treaty, which states, "The mechanism shall include the obligation of the Contracting Party concerned to implement measures to correct the deviations over a defined period of time." This is the objective as stated in the treaty. It is not an exercise in economic planning for good or ill; it is an exercise in correcting fiscal imbalances. This is the obligation under the treaty being reflected in the legislation. What the Deputy suggests goes well beyond the scope of this and introduces a range of considerations which might make it impossible for the Government of the day to take corrective action when the deviation occurs. I will give a simple example. Last February, the Department of Public Expenditure and Reform had an early retirement scheme across the public service and significant numbers of people retired and the public service was made much smaller. This runs contrary to any employment targets that Deputy Doherty would introduce because of the serious reduction in numbers. However, it reduced the payroll bill of the public service and was a measure to correct fiscal imbalances. Whatever about the rights and wrongs of Deputy Doherty's argument, in the terms of what we are doing it is not possible to include it here. This is why I will reject the amendments.

This not only a fiscal correction, but a programme designed by the European authorities and the IMF.

When we get out of the programme, it will be important that we have an economic and social development plan to carry us forward for several years. It is within this context that we can have a debate on the social and economic objectives the Deputy seeks to import by way of amendment. Although I disagree with many of the Deputy's remarks, my principal objection is that including the amendments would do violence to the section and the purpose of the Bill. There are other opportunities to develop economic and social programming in the Houses of the Oireachtas in order that it would incorporate Government policy.

Pearse Doherty (Donegal South West, Sinn Fein)
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I wish to make two brief points. As a number of amendments are grouped, I will focus on two and ask the Minister how they cause violence to the article. First, my amendment on equality and anti-poverty impact assessments reads: "All revenue and expenditure measures contained in the plan must be subject to equality and anti-poverty impact assessments the details of which will be published as appendices to the plan." The Minister's view of this is that, if an impact assessment's result was negative in terms of poverty or equality, namely, something would create more inequality or lead to more people being in poverty, he would be constrained with carrying on with the adjustment plan. The amendment does not state that. Rather, it requires that an assessment be done. If the assessment proves that a measure will lead to greater inequality, so be it. It will not stop the Government from meeting the four rules, (a) to (d). Nothing in the treaty states that the Government cannot have an equality assessment of the plan. Indeed, given Europe's long-standing work on equality, it would be bizarre if it told the Government that the latter could not have an equality impact assessment on a number of rules. Further equality and poverty proofing could be included in specific budget measures, but it is important to have an overall equality and anti-poverty impact assessment of the general plan to which we will all bow and from which everything will flow.

Second, my amendment No. 9 reads: "The plan shall only be adopted following approval of the Oireachtas." Nothing in the treaty's subsection to which the Minister referred denies the Oireachtas the right to vote on the plan. Is he afraid that some of his backbenchers would reject the plan? A Government will present a plan to the Houses on how to get back into line within two months of a warning from the Commission. Usually, if not always, a Government has a majority and should be able to carry the plan through. The requirement for approval by the Houses is to ensure the plan will at least be thoroughly discussed and that the Government and the Opposition will have a chance to tease out its merits. The idea that the plan would be rejected would require Government Deputies or Senators to jump ship. This is a question of the fundamentals of democracy.

I am sure that the promissory note issue has taken up much of the Minister's time. He knows there was no discussion in the Houses when that note was agreed, nor was there a discussion when the note's value was increased. Perhaps if there had been, we would not be in this position. My amendment requires approval by the Houses following a debate and a vote. Despite the Minister's comments, nothing in the treaty prevents us from doing so.

Michael Noonan (Limerick City, Fine Gael)
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There is a fundamental misunderstanding on the Deputy's side about what we are actually doing. This is not a train at the station to which we can keep adding carriages, that is, loading all economic and social policy onto it. There are several other opportunities to do that. This Bill is concerned with the corrections required by deviations from fiscal objectives. The methodology of correction is simple, in that it will either need to be done through the Estimates by reducing expenditure across certain Votes or by increasing taxes. As the Deputy well knows, the Parliament has a full debate on the Estimates and the budget and sees several votes. There is no question of the Parliament not endorsing the correction process. It must do so. These are the methods by which the deviations are corrected. Loading section 6 with a range of economic and social objectives weakens it when what the Deputy hopes to do can be achieved elsewhere in the work of the Houses.

The Deputy brings witnesses to bear on his debate. Pete St. John wrote "The Fields of Athenry", but it is not an historic ballad. It was only written in the 1970s. It is fiction. There was no such person. Regardless of whether Trevelyan's corn was stolen, no guy headed for the boat the following morning. The Deputy should not bring fictional characters forward as witnesses to social deprivation.

Pearse Doherty (Donegal South West, Sinn Fein)
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The Minister's answer may be clever, but there was no fiction about the person who telephoned "Liveline". Under the Minister's watch in 2012, a man stole so that his children could have breakfast in the morning.

Michael Noonan (Limerick City, Fine Gael)
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He never existed.

Pearse Doherty (Donegal South West, Sinn Fein)
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He existed. He exists today under the Minister's watch.

Michael Noonan (Limerick City, Fine Gael)
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Does the Deputy mean the guy from Athenry?

Pearse Doherty (Donegal South West, Sinn Fein)
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The Minister may claim that such people did not exist under British rule at the time of the Famine. Of course they existed, and they still exist. They are very real today. That is the Minister's legacy. There is no equality or poverty proofing of these measures. The Minister must admit that a man who shoplifted so that his children could have the bare necessities was convicted for doing so.

Liam Twomey (Wexford, Fine Gael)
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I would like to move on instead of getting into this sort of discussion.

Pearse Doherty (Donegal South West, Sinn Fein)
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I move amendment No. 6:

In page 7, subsection (2)(a), line 6, after "achieved" to insert the following:"in a manner consistent with paragraph (a)".

Pearse Doherty (Donegal South West, Sinn Fein)
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I move amendment No. 7:

In page 7, subsection (2), between lines 14 and 15, to insert the following:"(e) outline how revenue and expenditure measures will contribute to the objectives of greater income equality, social inclusion and poverty reduction.".

Pearse Doherty (Donegal South West, Sinn Fein)
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I move amendment No. 8:

In page 7, between lines 14 and 15, to insert the following subsection:"(3) All revenue and expenditure measures contained in the plan must be subject to equality and anti-poverty impact assessments the details of which will be published as appendices to the plan.".

Pearse Doherty (Donegal South West, Sinn Fein)
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I move amendment No. 9:

In page 7, between lines 14 and 15, to insert the following subsection:"(3) The plan shall only be adopted following approval of the Oireachtas.".

Liam Twomey (Wexford, Fine Gael)
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Amendments Nos. 11 to 13, inclusive, are related and will be discussed together.

Pearse Doherty (Donegal South West, Sinn Fein)
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I move amendment No. 11:

In page 8, subsection (4), between lines 15 and 16, to insert the following:"(a) provide an assessment of whether the fiscal and budgetary policy of the Government is contributing to economic growth, job creation, the delivery of high quality public services, greater income equality, social inclusion and poverty reduction,".

My amendment would put issues such as stimulating economic growth, job creation, delivering high quality public service and promoting income equality and poverty reduction into the remit of the council so that assessments of fiscal matters would detail the impact of various policy options in crucial social and economic indicators. I also support the amendments which Deputy Michael McGrath will speak to.

Michael McGrath (Cork South Central, Fianna Fail)
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I will deal with amendments Nos. 12 and 13. Amendment No. 12 is quite straightforward, asking that the Irish Fiscal Advisory Council would explicitly take account of the pension liability we are facing as a country. It seems that we are sitting on a pension time bomb and we know this from recent reports, including the KPMG review of the social insurance fund, which states that the State is sitting on a potential shortfall of up to €324 billion with regard to State pensions over the next 50 years or so. We know from the annual report of the Comptroller and Auditor General that the latest estimate provides that at the end of 2009, a total of €116 billion had accrued in respect of occupational pensions payable to public servants. It is the elephant in the room and there is not enough debate in the Parliament or committee about the pensions liability faced by this country. The fiscal council should specifically take that into account when completing its reports.

With regard to amendment No. 13, debt sustainability should be at the heart of what the fiscal council is about. In the report from last month it made some serious warnings that Ireland's debt sustainability is very fragile, indicating that there was a 40% chance that Ireland's debt to GDP ratio will not stabilise by 2015. I am proposing an amendment whereby the council would provide an assessment of the sustainability of the debt position of the State, taking into account the taxable base of the State and the ratio of deficit to GDP.

Michael Noonan (Limerick City, Fine Gael)
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I do not propose to accept the amendments proposed by Deputies Doherty and McGrath. The fiscal council has been established to address gaps in fiscal policy analysis and to provide assessments and recommendations relating to fiscal policy. Imposing a very wide mandate on the fiscal council would require much larger resources in terms of both staff and budgetary allocations. Expanding the mandate would be likely to impede the council's fulfilment of its core functions, including those specified in the treaty. Furthermore, some of the suggested functions are the job of the Government, and it is important to note that a number of bodies are supported by the State, such as the ESRI and the National Economic and Social Council, whose reports consider all aspects of policy development, including social impacts.

Additionally, we are not willing to assign other functions not outlined in this Bill to the fiscal council. We wish to ensure the fiscal council has the resources it needs to complete its core functions and expanding the functions would stretch the resources of the fiscal council to the point where its focus and attention would be taken away from its primary role, and we do not want that to happen.

Amendments adding requirements that are already covered by the requirements of the Stability and Growth Pact, and which are published in the annual stability programme update, are not necessary. Article 3 of section 2 of the 1997 surveillance and co-ordination regulation requires the State to take into account the future pension liabilities of the State, and this information is contained in the annual stability programme update. The fiscal council is required to provide an assessment of the official forecast, including an assessment of the stability programme update. There is no doubt that Deputy McGrath is aware that with this section, the fiscal council is specifically directed to the contents of the stability programme update. One of the elements is to consider the consequences of an aging population, and one of the primary consequences would be pension provision. Although it is not specifically part of the troika programme, it has become clear that it would like the Government to bring forward proposals on pensions, and we are considering that among our other options.

Michael McGrath (Cork South Central, Fianna Fail)
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I accept that the Irish Fiscal Advisory Council will take account of these issues in preparing the reports. For example, in the September report it addressed the question of debt sustainability. It seems that this is so central to what the council is about that it should be given a specific function to provide an assessment of debt sustainability. As long as it continues to do this in reports, I do not have a problem. Nevertheless, it should be given explicit recognition.

The Minister referred to the pensions issue, which must be dealt with, and indicated there have been some discussions with troika representatives. Was the Minister referring to State pensions or public sector pensions beyond changes already proposed?

Michael Noonan (Limerick City, Fine Gael)
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I was referring to pensions paid by the State.

Michael McGrath (Cork South Central, Fianna Fail)
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That is not in reference to public sector pensions. The Minister is referring to pensions paid through the social welfare code.

Michael Noonan (Limerick City, Fine Gael)
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The Minister for Public Expenditure and Reform, Deputy Howlin, has brought forward much change specifically on the age at which social welfare pensions would be paid. I am talking more about public service pensions.

Michael McGrath (Cork South Central, Fianna Fail)
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So the Minister is not talking about the State contributory and non-contributory pensions. He is building on the reforms in the Bill of the Minister for Public Expenditure and Reform.

Michael Noonan (Limerick City, Fine Gael)
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The Minister, Deputy Howlin, made a number of changes, with one dealing with the age of eligibility for social welfare pensions. Another involved the restructuring of public service pensions across the State, and there may be more amendments to bring forward.

Michael McGrath (Cork South Central, Fianna Fail)
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Is that in respect of pensions paid to retired public servants?

Michael Noonan (Limerick City, Fine Gael)
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No, it refers to pensions that might be paid to public servants who retire in future.

Michael McGrath (Cork South Central, Fianna Fail)
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Does the Minister wish to elaborate on what may be involved in that?

Michael Noonan (Limerick City, Fine Gael)
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No.

Michael McGrath (Cork South Central, Fianna Fail)
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The Minister does not want to take the opportunity to inform the committee.

Michael Noonan (Limerick City, Fine Gael)
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I am only signalling because I know the Deputy will make a speech about it. It is an input to policy.

Liam Twomey (Wexford, Fine Gael)
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We should stick to the amendments.

Michael McGrath (Cork South Central, Fianna Fail)
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I move amendment No. 12:

In page 8, subsection (4)(b), line 22, after “Pact” to insert the following:"taking in to account the future pension liabilities of the State".

Michael McGrath (Cork South Central, Fianna Fail)
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I move amendment No. 13:

In page 8, subsection (4), between lines 22 and 23, to insert the following:"(c) provide an assessment of the sustainability of the debt position of the State taking account of the taxable base of the State and the ratio of General Government Deficit to Gross Domestic Product,".

Michael McGrath (Cork South Central, Fianna Fail)
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I move amendment No. 14:

In page 8, subsection (4), between lines 22 and 23, to insert the following:“(c) whenever requested in writing by a Committee of Dáil Éireann established under the Standing Orders of Dáil Éireann, provide an assessment of a policy proposal.".

Michael Noonan (Limerick City, Fine Gael)
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I do not propose to accept the amendment. While it is an interesting proposal, it would not be acceptable under the common principles as this could be seen as a threat to the independence of the council. One concern expressed to the Department by the fiscal council during the preparation of the legislation was the possibility of a Minister allocating additional functions without additional resources. This concern was echoed by the troika. I took it on board by ensuring that the functions of the fiscal council, as stated in the Bill, do not provide for additional functions to be given to the council. The allocation of additional functions will require amending legislation, which will ensure an opportunity to discuss appropriately matching resources. The same point applies to this amendment.

On the question of abuse, most Oireachtas committees have a government majority, and a malign Government could abuse this amendment by directing its members on a committee to vote in a particular way. The provision that any additional functions can only be allocated to the council through primary legislation is a much stronger safeguard than what the Deputy contemplates here.

Liam Twomey (Wexford, Fine Gael)
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Amendments Nos. 15, 16 and 17 are related and amendments Nos. 16 and 17 are alternatives to amendment No. 15. Amendments Nos. 15 to 17, inclusive, will be discussed together.

Michael McGrath (Cork South Central, Fianna Fail)
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I move amendment No. 15:

In page 8, lines 27 to 31, to delete subsection (6) and substitute the following:“(6) The Minister shall, within 2 months of being given a copy of the assessment under subsection (5), prepare and lay before Dáil Éireann a statement of the Government's response.”.

Pearse Doherty (Donegal South West, Sinn Fein)
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I agree with the amendment. It provides that the Minister would be obliged to respond whether the Government agreed or disagreed with the assessment made under subsection (3). My amendment, No. 16, goes further than that. This is a weakness in the Bill and, although the formula of words could be re-examined on Report Stage, it is important that an amendment such as this is included. Under the legislation the fiscal advisory council has two primary roles. One is to deal with the rules that stem from the treaty, which are in subsection (3) relating to exceptional circumstances, the failure referred to in section 6(1) and compliance with the budgetary rule. Subsection (3) is basically what comes from the treaty. Subsection (4) outlines its other role, which to provide an assessment of the fiscal forecast in respect of the budget and stability programme, the fiscal stance year by year and whether it is conducive to prudent economic and budgetary stability, including the references to the provisions in the Stability and Growth Pact. That is crucial.

Hopefully, section 3 will not arise. I hope we will not be in a situation where there are issues relating to compliance with the budgetary rule and that we will have growth and are able to deal with this. The fiscal council's reports so far have been dealing with the budgetary issue and the stability programme. When I raised this on Second Stage the Minister mentioned that a response to the fiscal advisory council reports is given in the stability programme update that was released in February. He is correct. I looked at the stability programme update, and chapter 3.6 is on the report of the Irish Fiscal Advisory Council. The bulk of the chapter outlines what the fiscal advisory council has told us. That is not a response; it summarises some of its findings. Then there are two small paragraphs which detail the Department's response. The response is printed in red ink.

The document prepared by the Irish Fiscal Advisory Council - its second report - was 64 pages long. It was hugely detailed and contained a great deal of information. We all do not agree with the recommendations, but we all gave them a fair hearing and asked questions of the council's members when they appeared before the committee. There were 64 pages of detailed analysis and recommendations but the Department responded with 185 words. It is not right that this is the type of attitude is shown to the fiscal advisory council. I know the Minister and his officials hold the council in huge esteem, but this is something we must get right. When Professor John McHale appeared before the committee recently I asked him about the reporting of the council and his view of the Government's response. He said:

Deputy Pearse Doherty inquired as to why we changed the advice we were giving since our first report. In the context of how the Government formally responded to our advice, the stability programme update contained a short response. We would perhaps like a more lengthy response. It is very important that the Government does not feel that it needs to respond immediately to what we say - sometimes such responses can come a little too quickly - but that it should take the advice on board and then provided a more considered reaction in an appropriate way.

The amendment places the onus on the Government to lay before the Houses of the Oireachtas its reasons for not accepting the council's advice, not just regarding what stems from the treaty but also the advice it gives on the budgetary and stability programme, official forecasts and whether it is conducive to prudent economic and budgetary management, including references to the Stability and Growth Pact. This is important. As I said, the amendment could be tweaked because perhaps two months could be too restrictive - obviously the Minister does not wish to show his hand prior to a budget - but it is important that the requirement for a formal response is set down in legislation, and more than what is contained in the stability programme update.

The second issue relates to instances in which the advice of the fiscal advisory council is not heeded by the Department. As we have already outlined, what is contained in the Bill is that it would only apply under section 3. When it is not heeded it should be laid before the Houses and there should be a debate or statements on it. If we are establishing a fiscal advisory council on a statutory footing to give us independent advice - I am not saying we should take that advice all the time and just implement it - the advice merits statements in the Dáil, at least, particularly if it is on section 3, which deals with non-compliance with the rules of the treaty.

Michael Noonan (Limerick City, Fine Gael)
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I do not propose to accept the amendments. The common principles adopted by the European Commission require governments to comply or explain why they are not complying with the assessments set out in subsection (3). Accepting the proposed amendments would result in a requirement for the Government to respond to all assessments and reports produced by the council. The Government does respond to the assessments of the council. Specifically, I have responded to its reports in the stability programme updates and the medium-term fiscal statements. Placing this requirement on a legislative basis would be very difficult.

The assessments arising from the council's general functions under subsection (4) can be wide-ranging and contain a great deal of analysis and a large number of recommendations. Would the Government have to respond to every line of the recommendations and analysis or just a few of the main items? In any event, I and the Government answer to the Oireachtas and the mechanisms available there can be used to elicit further responses to council reports.

The reference to subsection (3) is a reference to the core functions of the fiscal council under the treaty and the assessments in question. The fiscal council determines whether if exceptional circumstance exist or have ceased to exist, and also examines the Government's compliance with section 6 regarding the correction mechanism. The specifics of assessments arise from the provisions of the treaty and are precise requirements. In addition, requests for debates are a matter for the Oireachtas. It is not appropriate to place in legislation a requirement for debates. For these reasons, I do not intend to accept these amendments.

The real response to the recommendations of the fiscal council is not the words used in a particular report but the policy action the Government is prepared to take arising from the recommendations. The policy actions are usually identifiable at budget time when one sees whether the provisions of the recommendations of the fiscal council are being implemented by the Government. That will continue to be the real test of whether the Government takes on board the recommendations of the fiscal council.

Neither of the Deputies is tardy in asking parliamentary questions and, if at any stage, they feel there is not an adequate response to a recommendation from the fiscal council, they should table a question for priority. They should use their usual investigative powers to get the maximum information from the relevant Minister, whether the Minister for Finance or otherwise.

On the question of Dáil debates, the Government is never reluctant to have a debate on a particular issue. If there needs to be a debate on the recommendations of the fiscal council, it can be processed in the normal way through the Whips. In the same way as we will have an economic debate next week, if the Deputies think there is inattention to the recommendations of a fiscal council report, there is no difficult having a debate on it.

Pearse Doherty (Donegal South West, Sinn Fein)
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We have come from a decade where advice went unheard, unnoticed or basically dismissed, in particular by the previous Government. That has been well-documented in independent reports on the collapse of the Irish economy. One of the reports on the Department of Finance showed that advice was given to the previous Government to establish a fiscal advisory council, and I welcome the fact we are putting that on a statutory footing. However, if advice is given by a statutory body to the Department of Finance, it merits a response.

I already quoted Professor John McHale's comments in which he was very measured. Is 180 words on a stability programme update an adequate response to a 64-page document of advice put together by the fiscal advisory council? In my view, it is not adequate. I would not try to think what the Minister thinks but I do not believe anybody would believe that is an adequate response. Deputy McGrath said that the council would feel unloved, and I think that is well put. A more adequate response is required not only for the council but for the members of this committee who are teasing out their views. It is important for us to hear what the Department of Finance thinks so we can be better informed in terms of the decisions we take in the future.

The Minister indicated that he will not accept these amendments, and I accept that is his position, but I appeal to him to have a more comprehensive response in the stability programme updates from the fiscal advisory council in the future.

Michael Noonan (Limerick City, Fine Gael)
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I can take that on board.

Liam Twomey (Wexford, Fine Gael)
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Amendments Nos. 18 to 20, inclusive, are related and will be discussed together.

Michael McGrath (Cork South Central, Fianna Fail)
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I move amendment No. 18:

In page 10, paragraph 1, lines 5 and 6, to delete subparagraph (2) and substitute the following:
"(2) Subject to paragraph 3, the members of the Fiscal Council shall be nominated by the Minister and appointed subject to approval by the Joint Committee on Finance, Public Expenditure and Reform.".

Since the Government came into office, there have been some moves to involve Oireachtas committees in the appointment of members and chairpersons to various boards. It has not been uniform across the board but it has happened in some instances. Involving the joint committee would be a positive step and would strengthen the independence of the fiscal advisory council because it would not be solely appointed by the Ministers. Members of all parties and of no party would have an opportunity to question the intended nominees to the council, which would be a good thing.

I have commended the Minister on the persons he appointed to the current council but that is not to say that in the future, Ministers will get it right. It is an additional safeguard to involve the joint committee and give it the approval power in regard to the nomination.

Michael Noonan (Limerick City, Fine Gael)
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I do not propose to accept the amendments proposed by Deputy McGrath. I am sympathetic to these suggestions but see real practical difficulties as they could result in a reluctance to allow a name to go forward for nomination even if candidates could be confident of ratification. It would be impossible to limit ratification hearings to matters of professional competence only and I can understand why a good candidate might be unwilling to risk what could be seen as a very unpredictable process so, on balance, I have decided not to accept the amendments.

I refer the Deputy to the Schedule 1(3) where he will see that in appointing members of the fiscal council, the Minister is not a totally free agent because there are conditions he or she must comply with, including having regard to the desirability of nominees having competence and expertise in domestic or international macro-economic or fiscal matters. Effectively, it is pointed towards people of professional competence being appointed. That is a constraint on the Minister.

To the extent practicable, the Minister must also ensure an appropriate balance between men and women in the membership of the fiscal council which is not always easy to do, but we will do our best. On this occasion, I will not take the Deputy's suggestions on board.

Michael McGrath (Cork South Central, Fianna Fail)
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Surely the same logic would apply in respect of all other committees and all other appointments of board members and chairpersons. On other occasions, people have appeared before committees which have been given a formal role. I disagree with the Minister on this. I do not see the members of the council having any difficulty coming before the committee to engage constructively. I do not think there is a prospect of the committee rejecting the Minister's proposed nominations. It would enhance the process if we were given the opportunity to meet nominees before they were appointed and given a role in authorising those appointments. It is an important part of Oireachtas reform. There have been some moves in that regard, although they are piecemeal and not across the board. I am disappointed that the Minister will not accept what I think is a very straightforward suggestion.

Michael Noonan (Limerick City, Fine Gael)
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The members of the council work on a pro bono basis. They get some travelling and maintenance expenses but, essentially, they are people of very high competence in their professional lives and, as I said, work on a pro bono basis. It is important we get the highest category of person to serve.

Anything that might, in their opinion, provide a platform where their professional competence would be questioned could run contrary to the range of choice a Minister might have. That is my concern.

I would like to make a correction. I said they were pro bono. I am told it is not pro bono, but where they are employed in the public sector, the fee does not go to the person serving; it goes to the employer.

Michael McGrath (Cork South Central, Fianna Fail)
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I move amendment No. 19:

In page 10, paragraph 1(3), line 7, to delete “appointing” and substitute “nominating”.

Michael McGrath (Cork South Central, Fianna Fail)
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I move amendment No. 20:

In page 10, paragraph 1(4), line 17, to delete “appoint” and substitute “nominate”.

Pearse Doherty (Donegal South West, Sinn Fein)
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Is this the last question to be posed on the Bill?

Liam Twomey (Wexford, Fine Gael)
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Yes.

Pearse Doherty (Donegal South West, Sinn Fein)
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It is not agreed.