Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I move: "That the Bill be now read a Second Time."

The Finance (Miscellaneous Provisions) Bill 2020 has three core objectives. First, it amends the Credit Union Act to allow for general meetings, which are prohibited under current health regulations, to proceed; second, it amends the Fiscal Responsibility Act 2012 to increase the number of consecutive terms of office members of the Irish Fiscal Advisory Council may serve from two to three; and third, it amends the Credit Institutions (Stabilisation) Act 2010 to include the European Union as a facility lender, which will allow the State to comply with certain provisions contained in the SURE loan agreement at EU level.

The Credit Union Act 1997 currently requires credit unions to have their annual general meetings, AGMs, for the financial year to 30 September 2020 completed by the end of January 2021. Under current health guidelines, general meetings, including AGMs, would not be able proceed in practice. The changes proposed in the Bill will allow for greater flexibility to manage general meetings on a permanent basis. These changes, importantly, will allow credit unions to make changes to their rules if they so wish.

Some of these amendments will be temporary and relate directly to changes required to enable general meetings to proceed during the Covid-19 pandemic. In particular, the board of a credit union can decide on the form of a general meeting, similar to the provisions in the Companies (Miscellaneous Provisions) (Covid-19) Act 2020, notwithstanding the rules of the credit union. Should these legislative changes not be made and the public health measures continue to restrict large physical gatherings, the Central Bank has the power, in limited circumstances, to direct credit unions to postpone the holding of their AGMs for a period not exceeding nine months, where it is necessary to do so. The Central Bank has an identical power to defer special general meetings of credit unions. Boards could also issue information in written form to members or publish financial updates on their websites or both. However, these outcomes would be suboptimal as members would not be able to express their right to vote or call the board of directors to account or both.

The main amendments proposed in the legislation are: to allow the option of virtual general meetings, which provide access for remote attendance and the option of electronic voting; to provide credit unions with the option of availing of proxy voting for a temporary interim period to allow for the directors to determine the form of the general meeting, notwithstanding the credit union rules; to allow for AGMs for the year ending 30 September 2020 to be delayed until April 2021; to allow for the interim period to be extended by order of the Minister for Finance; to allow the Minister to make further regulations relating to general meetings to be held by the use of electronic communications technology; and to allow the directors of a credit union, in exceptional circumstances, to cancel the holding of a general meeting at any time prior to the holding of the meeting.

While the Bill is similar in some respects to the Companies (Miscellaneous Provisions) (Covid-19) Act 2020, it takes into account the different nature of credit unions and makes some permanent changes to encourage greater member engagement at general meetings in the future. For example, the Bill provides for credit unions to hold partly or fully virtual meetings on a permanent basis and provides greater flexibility for credit unions to determine how they manage voting.

The Bill will amend the Schedule to the Fiscal Responsibility Act 2012 to increase the maximum number of consecutive terms which a member of the Irish Fiscal Advisory Council, IFAC, may serve from two to three terms, before becoming ineligible for reappointment. This amendment is proposed to address exceptional continuity challenges the council is currently facing and to provide for greater flexibility for future appointments. Members of the council are required to possess a certain skill set and a highly technical level of expertise. With members currently restricted to serving just two consecutive terms of office, the pool of candidates available for every new open competitive process is a particularly narrow one and an ongoing challenge.

The five-member council is likely to have three vacancies by the end of the year. In addition, the two members who will remain in situare relatively new appointees. The continuity challenges which face the council constitute exceptional circumstances and require the proposed change to the Fiscal Responsibility Act 2012. Once passed, the change will help to address this considerable continuity challenge and allow for existing members to serve a third consecutive term.

The Bill will amend section 67 of the Credit Institutions (Stabilisation) Act 2010 to include the European Union as a facility lender, which will allow the State to comply with certain provisions contained in the EU support to mitigate unemployment risks in an emergency, SURE, loan agreement. Section 67(7) of the Credit Institutions (Stabilisation) Act sets out those institutions which are facility lenders to the State. While the definition of "facility lender" currently includes the European Financial Stability Facility and European Financial Stabilisation Mechanism, which are part of the EU, these references would not cover the E as lender under the SURE regulation and loan agreement. The technical amendment to section 67(7) extends the definition of "facility lender" to include the EU as lender to the Irish State.

The Government has applied for a loan of €2.474 billion under the EU's SURE instrument. This loan will cover eligible expenditure on short-term work schemes, that is, the majority of the expenditure on the temporary wage subsidy scheme.

I look forward to hearing Deputies' views during the debate, which will allow credit unions to hold virtual AGMs associated with the financial year ending September 2020, will allow each credit union to decide on the appropriate mechanism for voting at general meetings, and will extend the time in which AGMs can be held from January 2021 to the end of April 2021.

Over the past week, we received a great deal of interest from Oireachtas Members on all sides, supporting the passage of the Bill to allow the AGMs to be convened as soon as possible. The Bill will also amend the Fiscal Responsibility Act 2012 to allow for an increase in the number of terms that can be served by a member of the lFAC. It will also amend the Credit Institutions (Stabilisation) Act 2010 to include the EU as a facility lender, which will allow the State to comply with certain provisions contained in the SURE loan agreement.

I commend the Bill to the House.

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