That leave be granted to introduce a Bill entitled an Act to amend the powers and functions of the Irish Fiscal Advisory Council in relation to the analysis of policy proposals of political parties; for that purpose, to amend the Fiscal Responsibility Act 2012; and to provide for related matters.
The purpose of the Bill is to establish a robust system for costing the election proposals of all political parties. It is our intention that the process would operate under the aegis of the Irish Fiscal Advisory Council and would be independent of the Department of Finance. I commend the Fiscal Advisory Council on the work it is doing in its current remit. Last week it made a number of very important points in response to the spring economic statement from the Government, including that forecasts for Government spending do not take account of the likely cost of demographic aging and that tax revenue forecasts do not reflect stated Government commitments to reduce taxes. It has gone about its work in a thorough and responsible manner since its establishment. With the provision of appropriate resources, it can expand its role to cover that of costing manifesto proposals. This is an important issue as we move into a general election period. While various promises have been made by the Government for the costing of policy proposals, particularly the manifestoes of the main parties, it has done nothing to facilitate this in practice. In fact, the Minister for Finance told me in reply to a recent parliamentary question that it was unlikely that such an office would be established in advance of the next general election.
Elections represent the opportunity for members of the public to pass their verdict on the policy platforms put in front of them. It is vital that members of the electorate, in making a choice on whom to select as their representatives and their Government, are afforded as much information as possible. In the months ahead, each of the parties and many Independents will publish position papers on a diverse range of issues. These will feed into their manifestoes for the election. Full transparency as to the cost of the cumulative impact of manifesto proposals would, in our view, greatly enhance the quality of debate in the run-up to the general election.
Our legislation would mandate the Fiscal Advisory Council to carry out analysis on behalf of qualifying political parties on the effect that manifesto proposals would, in the opinion of the council, have on the budgetary position of the State in advance of a general election. To ensure a fair and transparent process, we also propose that the process be extended to pre-budget proposals on an annual basis, with parties obliged to provide draft costings; that the Fiscal Council may publish its final analysis with the consent in writing of the political party in question; and that the council may publish all or part of its final analysis where it believes it is necessary to do so to correct any inaccurate statement made by the political party in question, or a member or representative of same.
The current process is entirely unsatisfactory. In advance of the last budget, Fianna Fáil submitted a large number of tax-related costings by means of parliamentary questions, as well as individual items, directly to the Department of Finance. In July 2014 we were advised by the Department that it would cost individual measures on their own merit and on a stand alone basis and provide an individual cost or yield for each measure only. The Department also stated that, in contrast to the costing of the final budget package presented on budget day, no aggregate savings or yields would be provided in this costing exercise. It also stated the costing exercise would not examine the interaction of individual measures with other tax or expenditure measures and that, therefore, no examination would be done of the second-round impacts of proposed measures, such as their positive or negative impact on economic growth, job creation or inflation or their impact on tax buoyancy.
The establishment of a budget costing office under the fiscal council will provide for a full examination of proposals including how proposals interact with each other. The flaws in the current process are further highlighted by the fact that we have still not received replies in respect of a request, for example, for a costing of relatively straightforward changes to the regime for prescription charges, submitted a full nine months ago. The current system is inadequate and we are proposing a realistic way in which it can be changed. The public has demanded a change to how politics are conducted in this country and providing an independent source of information on the costing of election proposals would be a significant step in this direction. Above all else it would allow the general public to make informed decisions on proposals put forward by different political parties. I look forward to an opportunity to debate this further on Second Stage.