Dáil Éireann debate -
Tuesday, 27 Jun 2000

Vol. 522 No. 2

Written Answers. - DIRT Inquiry.

Emmet Stagg

Question:

47 Mr. Stagg asked the Minister for Finance the progress that has been made in implementing the recommendations of the Public Accounts Committee resulting from the DIRT inquiry; and if he will make a statement on the matter. [18175/00]

Minister for Finance (Mr. McCreevy)

The Deputy will be aware that on 20 June last the sub-committee of the Committee of Public Accounts carried out a full review of the progress made to date in relation to the recommendations contained in their report into DIRT. The sub-committee is to have a further meeting on 11 July next in relation to a number of specific issues. A specially established group in my Department is pursuing on an ongoing basis the progress of the full range of recommendations, in so far as my Department has direct responsibility. I will outline for the Deputy, the up to date position of the main recommendations contained in this report which my Department has direct responsibility for.

The Finance Act, 2000, implemented a number of recommendations made by the sub-committee in relation to the audit powers of the Revenue Commissioners, the reporting by Revenue to the Public Accounts Committee on the results of the DIRT look-back audit currently under way and the appointment by Revenue of outside auditors. In addition, the Act provides for the enhancement of the powers of the Revenue Commissioners to publish settlements.

A small number of the recommendations of the report could not be implemented in the Finance Act for legal reasons. The Attorney General advised that there would be difficulties in making provision to implement a limited number of the recommendations of the sub-committee where this would involve the retrospective introduction of penalties. This advice is founded on Article 15.5 of the Constitution which prohibits retroactive penal legislation. The Attorney General also advised that there would be difficulties in introducing a provision which would affect a narrow class of taxpayer, that is, DIRT inquiry financial institutions.

The sub-committee also recommended that the public service management and development division of the Department of Finance carry out a general review of the Revenue Commissioners which should address the issues of independence and accountability, organisation, structures and practices and the desirability or otherwise of executive and non-executive commissioners on the board of revenue and report back to the Public Accounts Committee within six months.

The centre for management and organisation development of my Department is currently carrying out the review of the Office of the Revenue Commissioners within the terms of reference as recommended by the sub-committee. The review is being overseen by a high-level steering group which includes two external experts.

Good progress has been made on the review and my Department worked to complete it within the specified six month period. However given the very wide scope of the review and the complexity of some of the issues being addressed, it has not been possible to meet that timetable. A target date of end July is now envisaged for completing the review.

As regards the operation of financial regulation and the role of the Central Bank, the sub-committee made a number of recommendations which are designed to promote the highest standards of corporate governance, probity and transparency in the financial services industry. Both I and the Central Bank have welcomed these proposals. It is my intention, when bringing forward proposals for the establishment of a single regulatory authority for the financial services sector, that the legislation will incorporate appropriate provisions based upon these recommendations.

In the meantime, the Central Bank has requested all credit institutions to submit their internal codes of ethical practice so that an assessment can be made as to whether further action is required. The bank has also recently been proactive by amending its licensing and supervision requirements and standards by requesting that a report be provided to the boards of credit institutions at least annually on compliance with national and EU laws and international regulations.

The sub-committee also recommended that, as soon as is feasible, legislation be prepared so that the resource represented by funds in dormant accounts may be used for specified purposes of societal and community benefit. As the Deputy will be aware from replies to other questions on this topic today, this issue is being addressed.

A recommendation was also made by the sub-committee concerning the possible conflict of interest where civil servants resign in order to take up employment elsewhere. The draft code of standards and behaviour for civil servants was recently finalised by the implementation group of secretaries general of the SMI and I am currently considering it.

A draft memorandum for Government on the code is being prepared by my Department and will issue to Departments for their observations in the near future. The draft code will then be brought before the Government for approval, following which the consultative process with the Civil Service unions will commence.

Last June in response to a parliamentary question from Deputy John Bruton, I also gave a commitment in this House that the draft code would be referred to the Oireachtas Joint Committee on Finance and Public Service for its consideration.

Following these consultation processes any changes to the code will be resubmitted to the Government for approval prior to the promulgation of the code in the Civil Service.

The majority of the recommendations concerning parliamentary issues are matters for decision by the Government. Other recommendations are for the Houses of the Oireachtas themselves. Some of these recommendations have constitutional and legal implications and the Attorney General provided advice as appropriate in the past week. The Department is currently preparing a composite response to these particular recommendations for my consideration. The intention is that the composite response will be completed in the early autumn and will be submitted to Government for approval.