I move: "That the Bill be now read a Second Time."
Since taking office, the Government has consistently shown it is committed to the rehabilitation and stabilisation of the public finances and the recovery of economic sovereignty. All Members are aware of the enormous impact of the difficult decisions the Government has been forced to take due to the parlous state of the public finances that it inherited. These actions were necessary for the very survival of the State and these decisive actions have been used by the Government to stabilise the deficit. Moreover, Ireland was able to exit successfully the troika bailout last December because of those decisions.
No public servant has been immune. The Members of this House themselves have seen large and necessary reductions in their pay and other supports necessary for the democratic machinery of this country. In line with this reform agenda and as stated in the programme for Government, there also is a clear need for change in our political system and for those in authority to lead by example. The Government has done so. Significant reductions have been effected to the pay and allowances of Members of the Oireachtas through a number of measures since 2009, most recently through the Financial Emergency Measures in the Public Interest Act 2013, which came into effect on 1 July last year. The Government has imposed a policy of strong pay reduction and restraint since taking office in March 2011, with the pay of all members of the Government voluntarily reduced from its first day in office. The cumulative effect of the reductions applied is that, in a point that often goes unnoticed or at least without comment, the net annual salary of the Taoiseach, that is, the salary following the implementation of the various Financial Emergency in the Public Interest Acts, has been reduced by more than 40% in the period since 2009 and that of the Tánaiste and Ministers by more than 35% in the same period. The pay cuts that have been applied will of course follow through into a reduction in the pensions that will be payable to each of them when their time comes to claim such pensions.
As every Member present will be aware, the system of allowances paid to Members of these Houses was substantially overhauled by the Government in 2011 on taking office. The rates of allowances payable to specified positions in the Dáil and the Seanad, to Chairmen of Oireachtas committees and to commission members all have been reduced. In addition, the number of committees has been reduced. The estimated current cost of these allowances is now less than €300,000, compared with a cost in 2008 of €1.436 million, which is a reduction of nearly 80%. The new Oireachtas expense allowance system began on 1 March 2010, replacing 40 years of legislation with a single parliamentary allowance system to cover the parliamentary and representation costs of Deputies, Senators and Ministers. This major reform was in addition to the reductions imposed on Oireachtas Members' expenses in 2009. It was not, however, transparent enough and I changed the system further from 1 January 2013. I reduced the travel and accommodation allowance by an average of 10%, with a higher cut of 25% for Dublin-based Members. The expenses paid under the public representation allowance are now vouched, in a reform long overdue, and the limit reduced by an average of 20%. The secretarial allowance scheme also was amended to require evidence of all expenditure. In overall terms, the most recent changes I introduced will save about 11% or approximately €1 million per annum on the overall cost of expenses.
This Bill is an important further step in the reform of the supports provided to the parliamentary leaders of qualifying political parties and to Members of the Oireachtas who were elected as independents. The Government is determined to ensure greater transparency and accountability is associated with political funding, as the people should be able to see that the money they provide is used in an effective and proper fashion. With this in mind, this Bill also delivers on the Government's commitment to abolish severance payments to certain ministerial and parliamentary offices. Current and future holders of such offices, including all the members of the current Government, no longer will receive severance payments at the end of their term of office.
A key objective of the Government is to rebuild public trust in the State through a comprehensive programme of political and legislative reforms. It has been pursuing a wide range of reforms aimed at delivering open, accountable and ethical government, underpinned by a transparent, efficient and effective public system to help rebuild trust in government and the institutions of the State. Many of the commitments in the area of political reform set out in the programme for Government and in the public service reform plan published in 2010 are now in delivery phase and real progress has been and continues to be made. This ambitious programme of reform consists of a number of significant legislative initiatives which, taken together, comprise a suite of openness, transparency, accountability and public governance measures that I believe will strengthen good government across the system. This is being delivered on several different fronts, including, as Members will recall, the extension of the Ombudsman's jurisdiction and powers through the Ombudsman (Amendment) Act 2012. This legislation came into effect last October, resulting in the most significant expansion in the jurisdiction of the Ombudsman in the 30 years since the original legislation created the office. As for provision of a detailed legislative framework for parliamentary inquiries, Deputies will recall the Houses of the Oireachtas (Inquiries, Privileges and Procedures) Act was enacted in July and commenced on 25 September 2013. This legislation enables a comprehensive statutory framework for the Oireachtas to conduct inquiries within the current constitutional framework as determined by the people. In respect of the regulation of lobbying, Deputies again will recall the general scheme of the regulation of lobbying Bill 2013 was submitted for pre-legislative scrutiny to the Oireachtas Joint Committee on Finance, Public Expenditure and Reform and its report recently has been received by my Department. The drafting of the Bill has commenced and the views of the aforementioned joint committee will feed into this drafting process. It is anticipated that the Bill will be published in the first quarter of this and hopefully will be enacted in its second quarter.
There will be extensive reform of the freedom of information, FOI, legislation, through proposals that currently are before the House, thereby consolidating and modernising it to improve the functions of the Act and to improve the structure of the legislative framework around freedom of information. In tandem with the drafting of the FOI Bill, work is well advanced in developing what I consider to be really important, namely, a code of practice to support the implementation of the new Bill once enacted. On the introduction of legislation protecting whistleblowers, the Protected Disclosures Bill 2013, which passed all Stages in the Seanad last November, will be introduced into the Dáil in early February. I believe the Bill, which reflects best international practice and addresses a significant gap in Ireland's anti-corruption framework, will provide comprehensive protection to whistleblowers in all sectors of the economy. The overhaul of the ethics legislation is being progressed and is aimed at supporting and promoting ethical conduct and creating an environment in which ethical issues and conflicts of interests are managed effectively, while corrupt and unethical conduct is severely discouraged.
The programme of reform will also include the publication of a consultation paper on strengthening Civil Service accountability and performance. An extensive public consultation process has been initiated, led by the independent panel on accountability that I have established. The aim of this process is to bring about change and reform to the current accountability arrangements. I invite Members to make submissions to that expert review because it is important we get political, as well as cross-societal input into that process. The publication of this paper begins an extensive public consultation process on the key issue of who is accountable and answerable and who is responsible for what in the Civil Service.
My Department is also leading on the Open Government Partnership, OGP, which serves to complement these existing objectives and provides an important international complement to national reform efforts. The intention, as I have previously indicated to the House, is that Ireland will become a full member of the OGP in May 2014. Membership of the OGP will reaffirm Ireland's commitment to governmental transparency and reform. This Government embraced reform from the very beginning, demonstrating a strong commitment to facilitating open, transparent, responsible and, I hope, accountable governance. These are just some of the areas in which we are working to restore faith in our political and administrative systems.
The reforms we are undertaking in this legislation fit firmly within these two aims of democratic reform and fiscal efficiency. The allowance governed by this legislation, what has been called the party leader's allowance, first came into being in 1938, approximately 75 years ago. It was born from the recognised need for the State to support the political system and the democratic process, and introduced the provision of funding to Opposition parties. Over time, and through changes introduced by a number of Governments of all political colours, the allowance provided through this legislation has changed and evolved to become a significant source of funding and support for all parties and Members in this Parliament. The main goal remains the same, however - that is, to support the proper functioning of our political system.
I have already made it clear that no aspect of political funding can remain immune from the financial corrections and savings that have necessitated the changes I have outlined. With this in mind, this Bill will reduce the rates of the allowance paid to both parliamentary leaders of parties and Independent Members by 10%, a measure that will result in a direct saving of approximately €840,000 in a full year. It does not sound like a lot of money, but it is important that everybody is seen to carry the burden. As I have already stated, the scope of the allowance payable under the existing legislation has grown over time. What was once an allowance purely for the leaders of Opposition parties to spend as they saw fit is now an extensive support provided to parliamentary parties, as well as Independent Deputies and Senators, for use exclusively in their parliamentary activities and research. To reflect the evolution of the allowance, and following a suggestion by some of the Independent Members of the Seanad during the consultation process preceding the drafting of the Bill, the Bill renames the allowance as the "parliamentary activities allowance" to better reflect its true purpose and intent.
The Government has already implemented significant reforms to political funding through the Electoral (Amendment) (Political Funding) Act 2012, which was brought before the Houses by my colleague, the Minister for the Environment, Community and Local Government, Deputy Phil Hogan. That Act brought into force restrictions on corporate donations and considerable reductions in the maximum amount that a political party or an individual can accept as a political donation. This Bill builds upon the changes to the Electoral Act by improving the transparency and accountability for the money from the public purse received by parties and Independent Members for parliamentary activities.
The most recent primary legislation on this allowance was passed in 2001. Following public concern about how the allowance could be used, that Act introduced a limited requirement for leaders of political parties to account for the money spent from the allowance received in a statement of expenditure, to have that statement audited and to submit these documents to the Standards in Public Office Commission for consideration. Under this Bill, the commission will be given more extensive powers to examine the statements of expenditure provided in respect of the allowance and to offer guidance on its use. By allowing for the publication of guidelines, those in receipt of the allowance will be given certainty as to what they are permitted to use the funding for. This should ensure that all money received is spent in an appropriate and proper manner.
Up to now, Independent Members of the Oireachtas in receipt of this allowance did not have to account for the funds received. In the current climate, and with the increased scrutiny on all public expenditure, this is no longer acceptable. The Bill provides that Independent members of Dáil Éireann and Seanad Éireann will be subject to the same reporting requirements that apply to party leaders and significantly enhances the level of accountability for those in receipt of the money.
With the permission of the Chair, I will go through the provisions of the Bill in some detail. Section 2 is based on current provisions and provides for the payment of the allowance to parliamentary leaders of qualifying parties and to qualifying Independent Members. It sets out the criteria for entitlement to the allowance and provides for a reduction in the current rates. It clarifies that the amount of an allowance payable to a parliamentary leader of a qualifying party is calculated on a tapering basis rather than a flat rate being applied to the total number of that party. The allowance may be used to fund the parliamentary activities of the party, such as policy formulation, the procurement of technical advice or support services, or for research and training. The main restriction on the use of the allowance is that it cannot be used for, or to recoup, electoral or political expenses on elections.
During the passage of the Bill through the other House, it became apparent that there was a misconception as to the meaning of this section, particularly the calculation used to determine the level of funding that should be made available to each political party. The figures used for calculation purposes are not allocations for individual Members of that party and do not have to be spent in respect of any particular Member at any stage. Rather, they are part of the metric by which the funding of parties, which form a vital part of our political system, is determined, and which takes into account the views of the electorate as expressed at the ballot box. It is for parties to determine how they will use that money, within the categories permitted, and it is parties that the funding is to support, not the individual Members who comprise that party.
It has been suggested that in the event that a Member of a party loses the party Whip, the parliamentary party should have its funding reduced. Not only does that suggestion miss the point that the money given to the party, reflecting the wishes of the electorate, is not the individual's and was never theirs to control or spend in that fashion, it would also have negative repercussions for those employed on the understanding that the funding would be available, and could cause legal and contractual issues for political parties. Such a measure could disproportionately affect smaller parties, for whom the tiered calculation is designed to provide additional support. A reduction of €25,754 to a party with more than 30 Members has a very different effect than a €64,368 reduction to a party of only two or three Members.
The section includes two new provisions. The first new provision provides that qualifying expenses arising out of parliamentary activities will only be regarded as qualifying expenditure where such expenditure is not otherwise reimbursed or provided for. The second new provision provides that, in view of our obligations to the Central Fund and for administrative efficiency, where an allowance is due and payable and a period of six months expires without the parliamentary leader or Member having claimed the allowance or part thereof, the part of the allowance for that period in excess of six months shall no longer be payable.
Section 3 inserts eight new sections, 10A to 10H, into the Ministerial and Parliamentary Offices Act 1938. I will deal with section 10B first as it contains the provisions whereby leaders of qualifying parties and Independent Members in receipt of the allowance must provide a statement of expenditure and accompanying auditor's report to the Standards in Public Offices Commission. This section also outlines the procedure when a change in party leadership or the death of a party leader or Independent Member in receipt of the allowance occurs.
Section 10A provides that a recipient of the allowance who fails to provide the required statement of expenditure and auditor's report within the required deadline of 120 days after the end of the financial year to the commission will receive no further funding from the allowance until such time as those documents are provided.
The section also provides that should the commission find that the statement of expenditure does not comply with the legislation, the allowance will not be paid to that recipient until such time as the issues underlying that non-compliance have been addressed to my satisfaction.
Section 10C provides for the retention of documentation by party leaders and Independent Members in support of the statement of expenditure provided for the commission. Section 10D provides powers for the commission to examine and assess the statements of expenditure provided to it and to make inquiries as necessary to do this. The section also outlines the process by which the commission may report its findings in regard to the statements of expenditure received by it. Section 10E allows for the setting of a date when these provisions will come into effect for Independent Members and for party leaders. This is in recognition of the fact that the necessary documentation may not have been collected prior to its being required by this legislation, and that some advance notice of these requirements is necessary.
Section 10F provides that in the event that a party or Independent Member of the Oireachtas in receipt of the allowance loses its, or his or her, entitlement to the allowance, any unspent amounts received must be repaid within 120 days of the end of the financial year. Section 10G provides that the commission may formulate and issue guidelines in regard to the allowance and the statement of expenditure to be prepared by those in receipt of the allowance. This provision has been requested by the commission for some time, as there was previously no formal advisory role given to the commission in regard to the allowance. By allowing for the publication of guidelines, those in receipt of the allowance will be able to ensure that the money received is spent in an appropriate and proper manner.
Section 4 amends the existing legislation so that any general round decreases which apply to the Civil Service will also apply to the rates of the allowance. Previously, only general increases could be applied. This was not due to design, but the fact that at the time of drafting the existing legislation, it was not envisaged that decreases would be implemented.
Section 5 delivers on the Government's pledge to abolish severance payments for specified ministerial and parliamentary officeholders. These officeholders include the Taoiseach, the Tánaiste, Ministers, Ministers of State, the Ceann Comhairle, the Leas-Cheann Comhairle, the Cathaoirleach of the Seanad, the Leas-Chathaoirleach, the Leader of the Seanad and the Attorney General. The abolition of these payments will apply to both current and future holders of the offices in question. There are currently no persons in receipt of these payments.
The Oireachtas (Ministerial and Parliamentary Offices) (Amendment) Bill 2013 is a short Bill and its provisions are in keeping with the Government's objective of continued stabilisation of the overall cost of the public service. As part of this objective, it provides for a reduction for the first time in the rates of the allowance and for the abolition of severance payments. Greater transparency and accountability in the use of expenditure from the allowance will also be achieved and the money received from the allowance will not only be spent appropriately but will be seen to be so. At the same time, the Bill sets out an agenda of reform for the future, ensuring the transparent and accountable use of funds provided by the Exchequer to support the democratic process.
I commend the Bill to the House and look forward to hearing the views of Members on it. I will consider any ideas proffered.
