Ceisteanna—Questions. Oral Answers (Resumed). - Pre-Budget Submissions.

Trevor Sargent


15 Mr. Sargent asked the Minister for Finance if he will reconsider his unwillingness to accept pre-budget submissions, except from the official Social Partners, in view of the fact that this ruling excludes the Irish National Organisation of the Unemployed. [8570/96]

I announced in my budget speech that budget submissions should in future be made to the Select Committee on Finance and General Affairs. That committee will evaluate the contents of such submissions, will meet with representative groups and will submit a report to me with their recommendations.

It must be appreciated that in excess of 250 pre-budget submissions are made each year. It is not possible to comply with requests from all groups for meetings and, even where meetings have been arranged, the process has been unsatisfactory with groups simply stating the list of measures which their organisation want included in the budget.

The revised procedure will allow for much more in-depth consideration of budget proposals by interested groups. Proposals can be developed in consultations between groups and the Select Committee on Finance and General Affairs, the Dáil Committee which specifically deals with taxation and budgetary matters. The recommendations arising from this consultation process will constitute a valuable contribution to the formulation of the budget package. I am confident that the interests of the Irish National Organisation of the Unemployment will be well served through their contribution to this process.

Notwithstanding the Minister's reluctance to have 257 pre-budget submissions visited on him, does he agree the solution is not to transfer them to the Select Committee on Finance and General Affairs? Furthermore, does he agree that the decision he announced in his Budget Statement — not to meet any group in regard to such pre-budgetary submissions — was a bad one? Does he agree that some ideas advanced by Ministers originated from lobby groups? While some 90 per cent of what the Minister might hear by way of a pre-budget submission might be of little or no relevance, how can any Minister for Finance — the political head of his Department — expect to know what is occurring in the real world if he does not meet some lobby groups before budget day? Like his predecessors, I am sure his experience has been that, notwithstanding the good advice he receives from his civil servants, from time to time he must take a dip into the real world.

Let me be very clear about this, I meet people regularly. Each Thursday morning I meet five people for over an hour from what Deputy McCreevy described as the "real world", from the world of business, professional organisations and anybody else operating within our economy, when I meet the senior management of my Department, a practice I initiated in the Department of Enterprise and Employment and carried on into the Department of Finance. Frequently such discussions refer to economic policy, taxation measures or to specific sectoral interests and, from time to time, include suggestions or ideas subsequently explored in detail at bilateral level between my Department and relevant individuals or organisations. In addition, as any former Minister will know, my diary is permanently full of visits to and meetings with such individuals or organisations. The concept of any Minister for Finance being locked up in Upper Merrion Street, pouring over legislative books, is a myth.

I wish to explain what was in my mind in regard to the suggestion I made which will, ultimately, be determined by the Select Committee on Finance and General Affairs. The pre-budgetary practice has exploded in volume terms in recent years with in excess of 250 submissions being lodged. While not all of them are accompanied by a request for a meeting with the Minister, approximately 50 groups would want to meet me, not in the month of June, July or August but some time between the end of November and beginning of January when I or any Minister for Finance will be in the process of formulating the annual budget. In many such cases what individuals or groups want is a photo call, simply to present their shopping list, have their photographs taken without engaging in any dialogue whatsoever. Other deputations present to me in private — as they would have done to my predecessors — a shopping list of their demands from the taxpayer in the budget without indicating what it is they or their organisation propose to offer in return, how the general taxation system should be improved or how taxpayers in general would benefit from accommodating their sectoral interests.

I am of the view that the evolution of our budgetary process inexorably will move in the direction of Parliament having a much greater say in the formulation of the annual Book of Estimates and budget in a manner similar to that which takes place in other continental democracies such as France, Spain and so on. That is a good thing. Anybody seeking a tax break from the budgetary system, through the Finance Bill or the budget, should be accountable to this House. Holding a private meeting behind closed doors with any Minister for Finance — the parties involved, rather than the Department of Finance, issue the relevant press statement to the effect that they made a very strong case on behalf of this or that group to which the Minister is presumed to have acquiesced by his silence — is not in accordance with the spirit of democracy that should obtain in this State. I made the suggestion in my Budget Statement for reasons of democratic accountability, transparency and efficiency because civil servants' involvement at that juncture is enormous. Ultimately it is for the Select Committee on Finance and General Affairs to decide whether it wants to engage in this process, whether, a group advocating a change in the tax law should be permitted to present its case and be questioned on it thus giving some idea of the overall economic benefit of any suggested change in the taxation system as distinct from a very articulate presentation on behalf of some lobby group.

Finally, by way of a postscript, of course I will meet pre-budget submission groups from the social partners at any time, subject to diary constraints. The reality is that the bright ideas for budgets seem to come into existence between late November and early January when it is simply impossible for the current system to digest or integrate those ideas, some of which are very good and some of which I have used in budget proposals. The scrappage idea for the car industry, for example, was one such an idea which came from a pre-budget submission. It was an excellent idea, which I was happy to accept and give full credit to the SIMI organisation which promoted it.

The system cannot allow the inexorable growth of pre-budget submissions and the demand for meetings in the time-frame of the period to which I refer.

Will the Minister agree there is an air of unreality in his attitude to this matter? He is asking 20 Members to be polite to people putting forward uncosted suggestions for inclusion in budgets. If he wants the Select Committee on Finance and General Affairs to examine these proposals, the least he might do is have his officials prepare a counter document on the costs involved in any particular proposal. I cannot say to the cider industry, the SIMI or the ICMSA what I think of their proposals if I must work out the cost implications and all the down sides.

With respect, what the Minister seems to forget is that these 20 Members or so of the Select Committee on Finance and General Affairs will be victims of a deluge of people making uncosted assertions when we will not even have his advantage of having somebody beside him at a desk to say that the proposal would cost £30 million, for example, and is not possible. We will be in the firing line asking foolish questions and making foolish approving remarks with regard to schemes about which we know little in terms of their practice.

In deference to the Chairman of the Select Committee on Finance and General Affairs with whom I have had discussions, the points which Deputy McDowell raised have, in fact, been raised in principle and in some detail. Certain suggestions and proposals have been made to the chairman of that committee to address the issue which Deputy McDowell has, understandably and rightly, identified. It would be an impossible task for the Select Committee on Finance and General Affairs to undertake the task in the manner which has just been described, and that was not my intention. In deference to the discussions which we have already had, I suggest that the parties represented on that committee meet its Chairman to discuss how they wish to proceed. I am happy to resort to the original practice of the last two years — although I regard it as very unsatisfactory from everybody's point of view — if that is what the committee decides. Clearly, resources and assistance, including assessments of costs, are needed and that would not be denied in principle but its detail is properly a matter for the chairman and the committee in consultation with my Department.

Perhaps the Minister for Finance is not aware that the Select Committee on Finance and General Affairs decided off its own bat last autumn to invite groups to attend pre-budget discussions on various Wednesdays. It heard submissions from the various groups as to what they wanted in the 1996 budget. Furthermore, because of the good ordering of affairs by the chairman, he decided which groups he wanted to invite before the committee and which to leave out. It is our intention to invite other groups next year so that there will not be any overlap.

Surely it is possible for the Department of Finance with its vast resources to order its affairs to enable them to have the same type of operation. I am well aware of the problems leading up to the budget and that every lobby group in the country wants to visit the Minister at some stage. I do not expect the Minister to have 257 separate organisations visited upon him in the months of December and January but it should be up to him to pick relevant groups on alternate years. If he confines himself to the social partners,——

——he will not hear the gems of wisdom which come from these lobby groups. I suggest that the Minister's Department order its affairs; rather than being deluged by representative groups it should pick and choose as the Select Committee on Finance and General Affairs did in 1995 for the 1996 budget.

Briefly, first and foremost that is what we do. It was the practice initiated last year which suggested to me that this was a way in which the two processes could be merged into one. The unique difference between such a group making a submission to the Select Committee of Finance and General Affairs and a deputation to the Department of Finance is that the committee meeting is on the record, people can ask questions and the lobby group must be accountable because what its representatives say is in the public domain. It is, therefore, open to ordinary citizens to see what is being said as distinct from what is contained in the submission.

There is clearly an increasing demand for access to the decision-making process. My concern is that it should be accountable, transparent and well informed before decisions are made. I believe the process which I suggested and offered to the Select Committee on Finance and General Affairs is the way forward but it is in the hands of the committee and its Chairman to decide if it wishes to engage in that activity.