Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

The Bill proposed by Deputy Murphy contains some interesting proposals. It aims to provide greater transparency in respect of spending by Departments and agencies in a given year and to draw a stronger correlation between taxes paid by individuals and State services delivered. The Bill is also intended to encourage more responsible budgeting, in particular in terms of preparation of annual budgets and to engender public debates around financial planning.

I agree with the Deputy that there is considerable merit in making more information available to members of the public in relation to the sources of Exchequer income and its expenditure. This is already the practice in some advanced economies. If people are better informed, they will better understand the need for the current levels of taxation. This would also serve to enhance public knowledge of the extent of spending our vast range of public services and, indeed, provide an increased understanding of their cost.

The Government is very much in favour of transparency and has made considerable progress in this area. My colleague, the Minister for Public Expenditure and Reform, has overseen a number of significant changes since the Government took office. Last December, in the Comprehensive Expenditure Report 2012-2014, the Minister, Deputy Howlin, announced a new medium-term expenditure framework. As part of this framework, multi-year expenditure ceilings have been set out for every Minister and Department and these ceilings form the basis upon which the Estimates process is now proceeding. The purpose of this is to provide Ministers and their Departments, as well as Members of the Oireachtas and citizens, with a clear sense of resource allocation not alone for the current year, but for the following year and the year after that. As Members are aware, in September the Government published the Ministers and Secretaries (Amendment) Bill 2012which will put these ministerial expenditure ceilings onto a statutory footing, which is one of our commitments under the programme. The provisions of this Bill will be discussed and debated in this House over the coming weeks.

The introduction of expenditure ceilings allows Ministers and Departments to plan for the future, something that was unrealistic to expect of them when they did not know what the future looked like. As well as expenditure ceilings, the Minister for Public Expenditure and Reform also announced the introduction of a whole of year budgeting process. One of the key elements of this reform is that it provides for greater involvement by members of select committees in the Estimates process. In January of this year, the Minister for Public Expenditure and Reform wrote to all committee chairs inviting them and their committees to avail of this new opportunity to participate in the Estimates process in an ex ante fashion with Departments. This is a new process and it is a significant change for Ministers, their Departments and committee members. It is nonetheless an important and welcome change to how budgets are prepared and discussed.

It could reasonably be argued that the Estimates documentation is not especially accessible to members of the public and for reasons of space is somewhat limited in terms of the information that can be presented. To address these issues, the Department of Public Expenditure and Reform launched a pilot whole-of-government performance information portal called Ireland Stat at the end of October. The pilot phase of Ireland Stat covers the following areas, jobs and enterprise development and innovation and agrifood - which are key features of our economic performance; land transport in the transport sector and rural economy, food safety and flood risk management. While this project is still at the pilot phase and covers just seven of more than 80 programmes, it nevertheless contains a rich and deep volume of information. The pilot Ireland Stat is an important step in developing a public-facing website that makes it easier than ever for members of the public to see how well or otherwise the system of government is delivering public services.

The Department of Public Expenditure and Reform also hosts the Databank portal which provides comprehensive information on every aspect of Government expenditure over the years. Using this portal, members of the public can create tables and spreadsheets showing how spending on current, capital, or pay has evolved since 1994, whether for the whole of Government or for individual Departments. The Department also intends to provide information on monthly Exchequer data and general Government expenditure data. Purchase orders made by every Department and agency will be made available for public scrutiny.

I will now focus on the specific tax aspects of the Deputy's proposals. The Bill proposes the provision to each person paying income tax of an annual statement detailing tax paid, the estimated tax payments to be made in the coming tax year and a breakdown of Government spending on which the taxpayers' taxes are spent. To implement this proposal there are a number of practical concerns about the obligations set down in this Bill. It is important at the outset to remind members that we have a self-assessment tax system, so businesses and individuals in the self-assessment system already know how much tax they have paid in any given year and they are in a much better position than the Revenue Commissioners to estimate how much they will pay in the coming year. Regarding the PAYE sector, the position is that employees and occupational pensioners already obtain details of their tax paid on an annual basis from their employers by means of P60 forms. The provision of the same data again, as proposed by this Bill, would be a duplication of effort and perhaps therefore an expensive and unnecessary use of public service resources.

The Bill also proposes that statements issue in respect of future tax liabilities but it is not clear at a practical level how this is to be done. Estimates of future tax liabilities at the level of the individual depend on estimates of future income which, as a matter of routine, would not be known to the Revenue Commissioners. In the case of businesses, future tax liabilities depend on future income and future costs, among other things. Such items are not always predictable or stable.

Turning to the question of distributing statements, the most obvious and efficient mechanism to distribute any proposed statements to individuals is by way of an electronic interface. However, to protect taxpayer confidentiality any electronic system containing taxpayer information and data must be properly secured and accessible only through secure passwords and other protections. Although Revenue has a number of online systems, they are designed for the declaration and collection of tax. They would require extensive and expensive development to be reconfigured for use in the distribution of the data outlined in this proposal.

In addition, it is unfortunately the case that not all taxpayers have or want access to Revenue's online facilities. Accordingly, in these cases, Revenue will be obliged to print and then post the data and information to individual taxpayers. The operational costs involved in this can be very significant. Furthermore, Revenue has found in the past that the distribution of unsolicited information has sometimes surprised many taxpayers and caused needless concern which gave rise to substantial increases in phone calls, letters and personal callers to Revenue offices. These often simple information or explanatory inquiries resulted in the diversion of resources.

Revenue has been progressively moving towards online, and away from paper-based, communication. The efficiency gains from these developments cannot be understated. I understand this was referred to during the coverage of the proposals in the Bill on radio earlier this morning. Aside from the practical measures, costs and difficulties to implement these measures, the core mission of the Revenue Commissioners is the collection of taxes and duties, and the implementation of customs controls. It has no function in decisions relating to the allocation or expenditure of Government funds arising from taxes received. Accordingly, the provision of details on the Government's use and expenditure of taxes is not readily available to the Revenue Commissioners. Any requirement for the Revenue Commissioners to gather, analyse and provide details of how taxes are spent would add the burden of non-core functions on an already fully engaged Revenue resource.

To turn to the issue of performance enhancement, a number of Government initiatives are aimed at improving the focus on performance, delivery and results. The publication in February of the Book of Estimates marked an important departure from the traditional way of setting out the Estimates. Where previously the focus of the Estimates was solely on financial and human resource inputs, it now contains an unprecedented volume of performance information in terms of what services were provided and the impact of these services on Irish society.

The Bill also addresses the issue of public procurement. In Ireland, the scale of procurement activities in supplies and services by public bodies is estimated at €9 billion. This highlights the importance of achieving maximum value for money and operational efficiency in public procurement. For these reasons public procurement is one of the major projects of key strategic importance under the Government's public service reform plan published in November 2011.

I see a lot of merit in the Deputy's proposals but logistical difficulties would arise in providing the information he seeks. In general terms his proposal should be considered further in the Houses of the Oireachtas and the Government will not oppose Second Stage of the Bill. Certainly, a better informed public and better informed taxpayers enhance democracy. I know certain elements of what the Deputy proposes are implemented in other jurisdictions. An initial initiative might be to include in the P60 a website reference where taxpayers could access additional information along the lines referred to by the Deputy, particularly to show how taxes are spent. Taxpayers would then be in a position to assess what value for money they get from the payment of their taxes.

I have noted the comments made by Deputies. Deputy Maureen O'Sullivan spoke about the fact that older generations are not computer competent in many respects and would find it difficult to access information. If accessibility is due to technology it is not possible to retrofit it and provide the same accessibility to those not using the technology. It is not possible because of a technological advance to do the same in a horse and buggy system when the reason it was not done in the first instance was because the technology was not in place to do it.

I thank Deputy Eoghan Murphy for a very valuable contribution to the advancement of democracy, transparency and the possibility of better compliance by taxpayers if they knew they were getting value for money on the basis of the information supplied.

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