Eoghan Murphy (Dublin South East, Fine Gael) | Oireachtas source

I want to address a particular aspect of the Bill. I refer to the part that puts the Irish Fiscal Advisory Council on a statutory footing. I am speaking in the context of the discussion on the budget in the lead-in to its announcement in December.

Putting the fiscal council on a statutory footing is very welcome. We made a commitment to the people during the election that we would put transparent and responsible budgeting and financial management at the core of Government business. Almost the moment after we were elected into government with our coalition partners in the Labour Party, we went about setting up the fiscal council. It is an innovative idea which began in the UK before being brought here. It is important that, with this Bill, we bring it into the framework of the upcoming discussions.

The Bill further strengthens the council and the footing it has in terms of the debate in which we are engaged, which is welcome. I congratulate the Government for its foresight and for moving so quickly to do that. It is an independent body established to guide Government thinking on preparing the budget. We are not bound by its reports or recommendations, but they should guide us, because otherwise it serves only as window dressing. It will be an image of reform, rather than true reform, if we do not take on board its recommendations to some extent, even if it is just to debate them, to dismiss them, to take parts of them or to consider them further. However, it must be part of the discussion we are all having in the Chamber about the coming budget, because that is why we set up the body. If we do not listen to it, we risk it becoming irrelevant.

Last year the fiscal council called for a greater budgetary correction than was being anticipated, and advised us to cut more and to be careful of our assumptions for growth for 2012. I agreed with its prognosis at that time. We did not go with the recommendations of the council but we still did okay and there was still growth in the economy in 2012, although it was not as high as we thought it would be. The economy grew this year, it is growing and we came out of recession technically at the beginning of the year. This is positive and welcome, and it is part of the confidence aspect we need to get back into the economy. We want to try to release the €100 billion of private Irish household wealth that is currently losing money on deposit with banks and get it back into the domestic economy. Knowing the domestic economy is growing, even if it is bouncing along the bottom, as the ESRI has said, is positive. We should repeat that as often as we can because it is of benefit to the domestic economy, to businesses and, hopefully, to the creation of employment down the line.

The latest report from the fiscal council in September 2012 is essential reading for every Deputy in the process that is now under way. I would like to draw on three elements of the report. The first element is the opinion of the fiscal council that the correction for the budget we are about to agree for 2013 should be greater than €3.5 billion. I support that. The council is telling us to cut bigger and cut faster. Deputy Donohoe said previously that the national deficit is a national security issue and I absolutely agree with him on that point. The longer we have in place a deficit of this size, the longer we remain too exposed to external events. We are not in control of our own decisions in this country and we do not control our economic destiny. We need to get back that control and cutting the deficit is key to that. This is why I support the fiscal council when it advises us to cut more and cut quicker.

We cannot rest upon the assumptions of growth for next year. Yes, I believe the economy will grow, but we have to be careful about the extent to which we think it will grow. We cannot continue with a prolonged adjustment because, ultimately, we risk undermining the great strides that have been already made by this Government in correcting our financial position. I agree that we should cut more and cut quicker.

The second point from the fiscal council report I want to draw on is the idea that in responsible budgeting one must keep all options on the table, whether in regard to tax increases, social protection, pensions or pay in the public sector. We should at least put them on the table and include them in the conversation so we can see what are the options facing all of us and the opportunity costs of having a policy in place. That does not mean we would do anything about it but, at the least, let us have that discussion so we can see the figures and see what is facing us. Nothing should be off the table. I do not consider it a dangerous idea to have all options open and to discuss them in full, and then dismiss them if we want. We should at least have the debate.

I know the programme for Government commits us to a certain fundamental agreement but that document must be fluid and we must be able to challenge it from time to time - as events change, the document must be allowed to change with them. We must challenge the assumptions in it all of the time, and this is our responsibility here. We cannot simply rest on an agreement made at one point in time. We must continually go back, revise it and see whether it still holds true, given what has transpired since then, whether it be in Europe or in the domestic economy.

The third element I want to draw on from the fiscal council report is in regard to a warning it issued, which was to be careful of groupthink in our assumptions about the economy and the levers we are using to try to correct the fiscal position as we look to 2013. The use of that word should set off alarm bells in the corridors of power because whenever we talk about what happened in the boom and bust, the most common excuse often given for why we could not see what was happening was that groupthink was in place and nobody saw it coming. Some people did see it coming but, unfortunately, they were not listened to. When the fiscal council tells us to cut quicker, and when the Central Bank tells us to be careful about our assumptions for growth for next year, we must listen.

My next point concerns the new transparent and open budgetary process to which the programme for Government commits us and to which we agreed as a Government when we came into office. We have made great strides in that area. We have a more transparent Government than we have ever seen before, which is welcome. I believe we can go further and do better. As a new TD, I will always stand up and say that in the hope that we can do better and improve the Dáil for everybody. I am an elected Deputy and have a responsibility for the budget, as do all of us in this Chamber. We have a responsibility to make sure we agree with what we are doing, we can support it and we can stand over it. If questions are to be asked, we must ask those questions and debate the answers. That is the important role of the Dáil. I understand we are to have a full debate on the budget, if not next week then the week after, and that we are to address some of the headline assumptions and issues. I look forward to that and hope everyone will contribute. I do not have the answers but we should raise the questions.

As a final point, I urge the Government to establish a budgetary committee, one that is cross-party and that will look at all issues of the budgets in every Department, meet with the fiscal council and the Secretaries General of the Departments, challenge the assumptions and go through the detail in the course of the year. There is still an opportunity to start something for this year and we should do it every year.

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