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Ministers and Secretaries (Amendment) Bill 2012: Report and Final Stages (Continued)

Wednesday, 3 July 2013

Dáil Éireann Debate
Vol. 809 No. 3

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(Speaker Continuing)

[Deputy Sean Fleming: Information on Seán Fleming Zoom on Seán Fleming]  I tabled this amendment because I felt it would be helpful to Opposition spokespersons to know what is capital expenditure and what is current expenditure. As an Opposition spokesperson, I would like to know how these matters are accounted for, whether a supplementary Estimate is being met from current or capital expenditure or whether that is still open for debate. The essence of my previous amendment was this should not be open for debate but should be one or the other.

Deputy Brendan Howlin: Information on Brendan Howlin Zoom on Brendan Howlin I do not have with me the public financial procedures booklet which all good civil servants carry around with them so they can check the rules therein. The Deputy is correct to the extent that there are things intuitively one would think are capital rather than current expenditure and vice versa. On the Deputy's specific question in relation to the €150 million, the €50 million to supplement the Department of Education and Skills' schools programme is capital expenditure, the €50 million for house insulation is capital expenditure and the €50 million being allocated to roads is also capital expenditure. They are all capital expenditure.

  Amendment, by leave, withdrawn.

  Amendment No. 25 not moved.

Deputy Sean Fleming: Information on Seán Fleming Zoom on Seán Fleming I move amendment No. 26:

We had an extensive debate on this issue on Committee Stage. The Bill provides that the fiscal council shall endorse as it considers appropriate the macro-economic forecast prepared. Despite that we had a lengthy debate on this issue, none of us was convinced and we are all reasonable people.

Deputy Brendan Howlin: Information on Brendan Howlin Zoom on Brendan Howlin I sought clarification on the matter.

Deputy Sean Fleming: Information on Seán Fleming Zoom on Seán Fleming Fine. If that is the legal Parliamentary Counsel's opinion, then the Minister should send him or her on a English course. What is provided for in the Bill is not plain English. We are all competent people but none of us can accept that "endorse" means "endorse or not endorse". I know that the Supreme Court often attaches a negative to an interpretation and that such can go either way.

To remove doubt, the amendment seeks the substitution of the word "endorse" with "give its opinion" so that the Bill will read that the fiscal council shall give its opinion as it considers appropriate. The council can then give a positive or negative endorsement, refuse to endorse or give its qualified or, as the case may be, glowing opinion as it considers appropriate. The use of the word "endorse" was unacceptable to us on Committee Stage. While I accept that the Minister has clarified the matter, I do not accept the plain English version of what we are being told.

Deputy Brendan Howlin: Information on Brendan Howlin Zoom on Brendan Howlin I am almost afraid to read out the legal response I was given in relation to this issue. Apparently, one cannot in law ask people to not do something. The word "endorse" encompasses both. It will allow the fiscal council the binary option of endorsing or choosing not to endorse as it considers appropriate. The binary option is encompassed in the word "endorse". It is understood, legal and normal. There is no mandatory requirement on the council to endorse. It will have the power to endorse or not endorse. I did have the matter clarified. While in plain English it might sound the appropriate question to ask, I can assure the Deputy that this is how legislation of this type is crafted.

Deputy Sean Fleming: Information on Seán Fleming Zoom on Seán Fleming From what document was the Minister reading?

Deputy Brendan Howlin: Information on Brendan Howlin Zoom on Brendan Howlin It is the response to my further inquiries of the advisory counsel from the Office of the Attorney General.

Deputy Sean Fleming: Information on Seán Fleming Zoom on Seán Fleming I bow to his or her superior knowledge of the English language.

Acting Chairman (Deputy Paudie Coffey): Information on Paudie Coffey Zoom on Paudie Coffey Is the amendment being pressed?

Deputy Sean Fleming: Information on Seán Fleming Zoom on Seán Fleming Yes, in the interests of clarity.

  Question, "That the words proposed to be deleted stand", put and declared carried.

  Amendment declared lost.   

Deputy Sean Fleming: Information on Seán Fleming Zoom on Seán Fleming I move amendment No. 27:

Again, this issue was discussed at length on Committee Stage, at which time I indicated my intention to table it again on Report Stage. The intention is not to change the wording in the legislation. The Minister will recall that all of those present during the Committee Stage debate were confused by the provision that the fiscal council shall endorse as it considers appropriate the macro-economic forecast prepared by the Department of Finance and shall then provide an assessment of the official forecast. This means there will be two different documents. While one or two people may have grasped the essence of what the Minister was saying, I am not sure others did. It would be helpful if legislation is understandable to the ordinary lay person. I would be surprised if there are 50 people in Ireland who could tell the difference between the two documents concerned.

  Rather than tamper with the wording of the Bill, which I am sure is in place for good reason, the amendment seeks that the Minister shall provide by way of regulation, memorandum or information to the House, on an annual basis, a detailed reconciliation between the macro-economic forecast and the official forecast. What is proposed in the amendment would not tamper with either of the definitions as set out in the legislation but would help the public to understand the difference between the two documents and to reconcile one with the other.

Deputy Mary Lou McDonald: Information on Mary Lou McDonald Zoom on Mary Lou McDonald The Minister might, when replying to the amendment, spell out in plain English the difference or similarities between the macroeconomic forecast and the official forecast.

Deputy Brendan Howlin: Information on Brendan Howlin Zoom on Brendan Howlin On the amendment, the Deputy's suggestion relates to the possibility that the fiscal council could endorse a set of forecasts in advance of a budget and that last minute budgetary measures, involving contraction-stimulation of the economy or on the price side, would have to be taken into consideration in the final forecast. However, existing procedures under the agreed two pack will allow the reconciliation to be made without any difficulty.

Member states are already obliged under regulation 473 on budgetary plans to state the underlying assumptions, the methodology and economic models which drive the forecast underlying the budget. Specifically, each member state is obliged to show the main assumptions of the independent macro-economic forecasts and important economic developments which are relevant to the achieving of the stated budgetary targets.

An annex containing the methodology, the economic models and assumptions and other relevant parameters underpinning the budgetary forecasts and the estimated impact of aggregated budgetary measures on economic growth must also be provided in the documentation. This allows for comparisons to be made between the endorsed and final macro-economic forecasts given that the type of stimulation or contraction about which I spoke would have to be set out in the assumption of both forecasts. The annex on forecast methodology and models would set out how stimulus or contraction impacts on growth for the working of a fiscal multiplier. A departmental working paper on forecasting methodology is being prepared and will explain how this is calculated.

Deputy Sean Fleming: Information on Seán Fleming Zoom on Seán Fleming It would be helpful if the Minister could circulate that note to Members tomorrow. The Minister stated earlier that a reconciliation can be done.

Deputy Brendan Howlin: Information on Brendan Howlin Zoom on Brendan Howlin Yes.

Deputy Sean Fleming: Information on Seán Fleming Zoom on Seán Fleming Will it be done and, if so, where will it be done? Will it be done this year or will it be next year or the following year before it is done?

Deputy Brendan Howlin: Information on Brendan Howlin Zoom on Brendan Howlin Once the budgetary documentation has been presented on budget day the reconciliation must be done.

Deputy Sean Fleming: Information on Seán Fleming Zoom on Seán Fleming How long after budget day will it be done?

Deputy Brendan Howlin: Information on Brendan Howlin Zoom on Brendan Howlin It will be done on budget day.

Deputy Sean Fleming: Information on Seán Fleming Zoom on Seán Fleming Will it be contained in the budget documentation?

Deputy Brendan Howlin: Information on Brendan Howlin Zoom on Brendan Howlin Yes.

  Amendment, by leave, withdrawn.

  Bill received for final consideration.

  Question proposed: "That the Bill do now pass."


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