Gerald Nash (Louth, Labour) | Oireachtas source

This Bill is generally welcome but some elements require improvement to meet the needs of members, boards of management, managers and staff of credit unions. Efforts to facilitate the safe holding of AGMs in the context of Covid-19 are welcome. Credit unions are democratic. Their workings are based on the one member, one vote principle that is fundamental to co-operative community-based organisations. As such, it is important to look in greater detail at some of the changes proposed in this Bill.

Section 11 deals with the introduction of proxies. This is a very radical departure from the current situation in credit unions throughout the country. It is concerning that this proposal, which is frankly poorly thought out, is being shoved in on a permanent basis in an emergency Bill designed to meet the particular needs of this moment. There are concerns that some of the provisions of the Bill would enable malign manipulation. For example, I am a little surprised that it allows for the accumulation of many proxy votes under the control of one person, who may not even be a credit union member. The absence of a measure to preclude vote clustering is cause for further concern. For example, the Bill could enable voting blocs to be assembled and deployed for or against candidates for positions on credit union boards, dividend payments, mergers, etc. Considerable discussions on the subject of mergers are currently ongoing between credit unions throughout the country.

The introduction of bloc voting could make manipulation of outcomes easier for persons with criminal intent, including money laundering by outside organisations that might attempt to take over control of the credit union. It could lead to a host of other manipulations and dodgy dealings. This proxy voting proposal has not been drafted on the basis of what I would describe as reality. For example, section 11 will introduce a new section 82A(6) to the Credit Union Act 1997. This limits the time credit unions will have in advance of a meeting to verify proxies and set up systems for electronic voting to 48 hours. If we are to proceed with proxies, which the Minister seems intent on doing, we need to revisit the idea that only 48 hours will be required. The section also inserts a new section 82A(7), which allows for the electronic delivery of proxies. This will oblige election officials to authenticate documentation that may not be original. It will thus be even more difficult to detect fraudulent documentation and nefarious actions in the context of credit union AGMs.

The new section 82A(4) effectively precludes the board from putting measures in place to exclude voter fraud. Such precautions have been omitted from this Bill. The board is limited in the measures it can take to verify the identify of the voter and ensure the security of the system. This area will require further focus.

This is a hurried, ill-considered and potentially dangerous section and the Minister of State should consider withdrawing it. I understand that a working group on credit union legislation is currently in place and is meeting with the Department. It would be better if this measure was referred to that group for more consideration, given the fact that it consists mainly of credit union associations. I accept the urgent need to allow credit unions to hold their AGMs for the reasons the Minister of State outlined.

We have several other areas of concern. The Bill proposes to introduce pre-meeting voting. This is fundamentally undemocratic and arguably runs counter to the whole concept of fitness and probity. As the sector regulator, we have seen how hard the Central Bank has worked to promote fitness and probity among directors and senior management in all banks and credit institutions. The nomination committee is one of the key committees established under the Credit Union Act 1997, as amended. Among other things, it is charged with ensuring that nominees to credit union directorships meet the highest of standards across a range of areas.

The report of the nomination committee to the members, in other words the electors, is a key element of this process. Under credit union rules, it must be delivered in advance of voting by secret ballot in the elections. The Minister now seeks to change this by providing for voting in advance of the AGM, as covered in the proposed new section 78A(4)(a). This raises yet another dilemma and conundrum. The administration needed to prevent a member, or a proxy, afforded a pre-AGM vote from voting again at the AGM would be substantial. This is a real issue. Were the actual meeting to be held online, sophisticated communication and voting technology would have to be developed and deployed with much time spent in the interval, between the close of vote and the opening of the meeting, to avoid affording some members two votes. That is a real and practical challenge. Consideration should be given to withdrawing the concept of pre-AGM voting and that the whole issue be referred back to consultation over a limited period with the representative associations, notwithstanding our acceptance of the urgency of action in this area to allow AGMs to take place in the current health context.

The proposed new section 78A(7)(a), to our amazement, fails to mention the requirement that any electronic system deployed should also provide for both show of hands ballots and secret ballots, as well as how the integrity of the ballot and the one-person, one-vote principle will be ultimately provided for. This is a fundamental issue and it ought to be addressed. It should be borne in mind that it is difficult to see how, on a technological basis, clustering of proxy votes could be accommodated in such situations. There are a range of different technical, security and electronic challenges with which we would be faced if this legislation is passed as presented.

I note the Bill has a technical amendment which enables Ireland to draw down SURE scheme funding of more than €2 billion directly from the European Union. The Bill also provides for the extension of term limits of members of the Irish Fiscal Advisory Council, IFAC.

When the SURE scheme was announced last spring, I saw it very much as an affirmation that the idea of the social Europe was back in vogue. It was an immediate response by the EU acknowledging that member states would need direct financial supports to help workers and businesses whose jobs were in jeopardy and who may need significant investment in terms of upskilling and retraining. From the Minister of State's earlier remarks here and in the Seanad, this money will be used to pay some of the bill for the temporary wage subsidy scheme and not for training and upskilling purposes. Insofar as I can establish, this is permissible under the scheme. It would be helpful, however, if the Minister of State could confirm the current status of our application to draw down these funds and that the European Union has sanctioned the use of these funds for this purpose.

The Bill started its journey in the Seanad several weeks ago. The Minister of State and his officials will be aware of the real concerns expressed by my colleague, Senator Marie Sherlock, in a helpful and measured way in respect of the ambitions of this legislation to extend term limits of members of the Irish Fiscal Advisory Council. We are now learning of the exceptional continuity challenges facing the Irish Fiscal Advisory Council, in that if its enabling legislation is not amended to allow term limits to be extended, it may soon in practice be the case that this statutory body may not be able to make a quorum at all. That is a dangerous situation to be in. If it cannot function at that level, then it cannot meet the statutory remit set for it by the Oireachtas in 2012. I understand one vacancy has been open for the guts of a year. From where I am standing, there does not seem to be a shortage of capable, independently minded macroeconomists in our country who could perform a valuable service on the Irish Fiscal Advisory Council. Is it the case that of those applying, the criteria cannot be met by those candidates? Is it the case that we do not have anybody applying for the positions at all?

I would be interested to know when the Irish Fiscal Advisory Council started to raise these issues with the Department and how far back the ability of this body to function came into question. When was the Irish Fiscal Advisory Council first in contact with the Department? How concerned was the Department by this situation? Members are being asked to amend legislation at the eleventh hour to allow term limits in the Irish Fiscal Advisory Council to be extended to allow the organisation to do its job. I hope this issue has not arisen because of neglect from the Department or, at least, lack of interest in the council's workings and its functions.

I hope and think the Minister of State will agree that the Irish Fiscal Advisory Council has served us well since 2012. It has fulfilled an important role with its evidence-based function by independently assessing and critiquing Government policy and fiscal policy more generally. It has also helped to lift the veil on fiscal policy and to make the process as to how fiscal policy is arrived at more accessible for members of the public and more widely understood. Heaven knows that more than most, this country has suffered from what one might describe as groupthink. Last week marked ten years since we were forced into the arms of the troika, lost our economic sovereignty and all that went with that. Turnover in any body is important, as is its independence. A 12-year term, which will be envisaged if this legislation is passed, is not advisable and could potentially lead to institutionalisation, herd mentality and groupthink.

This is not a criticism of anybody. All Members are huge admirers of the work that the Irish Fiscal Advisory Council has done, both corporately and the individuals who have served this country's policy development well. Would the Minister of State not be better minded to extend the number of appointments that can be made to the Irish Fiscal Advisory Council and make changes as to how the board operates to ensure consistency and continuity of membership as some members come and go? For example, the Minister of State might take a look at the Low Pay Commission, which has many more members than does the Irish Fiscal Advisory Council. When I was establishing the Low Pay Commission, one matter foremost in my mind was to guarantee term limits were short enough to ensure a turnover with new and fresh thinking. I also wanted sufficient numbers of people on the commission to ensure continuity and consistency and that it was representative. That might be a more elegant solution to the problem than the one proposed in the Bill. We might look at extending the number of members who can sit on the Irish Fiscal Advisory Council rather than taking the approach that we ought to extend term limits to deal with a problem we have now. It might be better to take a more fundamental look at the legislation and broaden it out to allow more people to sit as members of this important organisation.

It will become increasingly more important as we move forward. The Minister of State will be aware of the criticisms from both the Irish Fiscal Advisory Council and the Parliamentary Budget Office in terms of the lack of budgetary scrutiny, the scrutiny of Estimates, Supplementary Estimates and so on introduced this year in the context of the vast amounts of money the State is providing to businesses to keep the doors open and people in work, as well as the vast resources we are pumping into State services in the context of the current emergency situation. The Irish Fiscal Advisory Council is an important organisation. It should not be neglected but should be looked after and prioritised. I suggest the Minister of State does that, not by extending term limits but by ensuring the legislation enables more macroeconomists with expertise to sit on the board at any given moment in time.

See this speech in context