Brian Walsh (Galway West, Fine Gael) | Oireachtas source

I had an opportunity last night to listen to the contributions of Deputies Pearse Doherty and Seamus Healy. Deputy Pearse Doherty gave us more of the same populist rhetoric we have heard from Sinn Féin since I was elected to the Dáil 18 months ago. Given that he has been finance spokesperson for his party for some time, one would expect him to have acquired at least a basic knowledge of the way the Department of Finance operates and how the budgetary process works. He argued out of both sides of his mouth, on the one hand, opposing increases to direct taxation and cuts in expenditure, while, on the other, claiming that the debt-to-GDP ratio has increased since the Government assumed office. He cannot argue against measures aimed at reducing the deficit, while at the same time complaining that the debt-to-GDP ratio is increasing. He criticised the Government's performance since the European Council of 29 June, but he had previously argued against the creation of the ESM and the fiscal compact treaty. If he had his way in the referendum in June, we would not even be in a position to negotiate on these matters.

The Fiscal Responsibility Bill 2012 stems from the resounding endorsement of the stability treaty by the people earlier this year and represents a watershed in our economic history and a vital building block in the foundation of our future economic prosperity. With our European counterparts, we will be bound by common principles of good governance and fiscal responsibility in order that no Government will ever again be at liberty to perpetrate such cynical economic mismanagement as that witnessed in the recent past. Basic principles of budgetary discipline will be given a statutory basis and overseen by the Irish Fiscal Advisory Council. This independent body which was established on a non-statutory basis in July 2011 will monitor compliance with fiscal parameters and key economic indicators. Its role will be integral in preventing the calamitous circumstances of the past from recurring. It will ensure transparency in the budgetary process through public, independent analysis of Government decisions and the underlying fiscal policy assumptions on which they are based. Crucially, it will provide expert opinion on the long-term fiscal implications of revenue and expenditure measures, which we lacked to our grave detriment in the past.

There is a growing appreciation internationally of the value of such independent advisory bodies. In 2008 alone, 27 such institutions were established in 17 EU member states. Similarly, there is an increasing awareness of the importance of having a framework of enforceable fiscal rules which are adequate to ensure sustainability but flexible enough to take account of exceptional circumstances and cyclical change. In predicting the value of economic oversight and fiscal parameters in the future, it is a useful exercise to look to our past. The six pack reforms introduced last year included an early warning system to monitor ten key indicators of macroeconomic imbalances. Had this warning system been in place between 2001 and 2006, there was no year in which Ireland would satisfied all of the indicator thresholds. The Fiscal Responsibility Bill will ensure sources of macroeconomic imbalance are promptly detected and addressed in the future. The Bill presents an opportunity to ensure no future Government can perpetrate the economic misdeeds of previous Fianna Fáil-led Administrations.

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