Thirty-fourth Amendment of the Constitution (Inclusive Budget Reform) Bill 2014: Second Stage [Private Members]

Tairgim: "Go léifear an Bille don Dara hUair anois."

I move: "That the Bill be now read a Second Time."

It is seven years since this legislation was first introduced in the Dáil on 16 April 2014. That is reflected in its Title, "Thirty-fourth Amendment of the Constitution (Inclusive Budget Reform) Bill 2014". Since the Bill was introduced, we have had five amendments to the Constitution, reflecting the scale of change that has occurred in this State over recent years. There is more to be done and more change to come. A constitutionally protected right to housing, which is a priority and commitment of my own party, and the great recasting of the Constitution in the event of reunification of our country are things to look forward to.

Returning to this Bill, the change that has occurred is reflected in its Title. In the event that this legislation passes Second Stage, I have been assured by the Bills Office it will be renamed the "Thirty-ninth Amendment of the Constitution (Inclusive Budget Reform) Bill". It is a short Bill with huge ramifications, impacting how the Dáil operates, how we discuss, debate and deal with budgets and how we discuss and debate legislation. The Bill would pave the way for a referendum to appeal or amend Article 17.2 of the Constitution. That is an article little discussed in this Chamber but one which stifles its ability in regard to legislation and budgeting, a function which should be, ultimately, its job and our job.

In order for an executive to govern effectively, fiscal control is essential. However, there is a difference between executive control and executive monopoly. It is a long-standing practice in Westminster-style systems of parliamentary governance that opposition members are prohibited from introducing Bills, amendments or resolutions that have financial implications for the exchequer. This prohibition or ban paves the way for the executive monopoly I refer to. The ban exists in this Dáil and frustrates Opposition Members during every Finance Bill and nearly every Bill. It is a hangover from the British Empire and colonialism and is enshrined in Article 17.2. Its history is much older than that. Article 37 of the Constitution of the Free State provided that:

Money shall not be appropriated by vote, resolution or law, unless the purpose of the appropriation has in the same session been recommended by a message from the Representative of the Crown acting on the advice of the Executive Council.

That article in the Free State Constitution was regurgitated in Article 17.2 of Bunreacht na hÉireann in 1937, which provided that:

Dáil Éireann shall not pass any vote or resolution, and no law shall be enacted, for the appropriation of revenue or other public moneys unless the purpose of the appropriation shall have been recommended to Dáil Éireann by a message from the Government signed by the Taoiseach.

Article 17.2 acts as the basis for the introduction of standing orders in this Dáil that further restrict the ability of opposition Teachtaí Dála to introduce Private Members’ Bills or table amendments with financial implications for the State. These standing orders ensure the functions of the Dáil to deliberate and revise are significantly curtailed, reducing the scope of Deputies to contribute in meaningful debate, discussion and parliamentary activity and allowing the Government the exclusive right to impose expenditure and taxation without adequate balance or checks in place. It is outdated and does not serve the citizens we are elected to represent. These restrictions which muzzle the Dáil are mirrored in other jurisdictions once colonised by the British Empire, including Canada and Australia.

Article 17.2 was considered by the Convention on the Constitution which met between 2012 and 2014. As part of its work on Dáil reform, convention members voted in favour of amending Article 17.2, with the seventh progress report of the all-party Oireachtas Committee on the Constitution citing the prohibition as unjustifiable.

The Government may disagree with me on a number of grounds. This disagreement can never be considered an objective one, because it is in the Government's interest to neuter the Opposition as much as possible. The Government may argue that to repeal or amend Article 17.2 would lead to time-wasting or an unruly Dáil. First, if the current prohibitions were repealed or amended to allow for Bills or amendments with financial implications from the Opposition, such Bills and amendments would be subject to exactly the same scrutiny as Government Bills and amendments. Second, to disallow such Bills and amendments from the Opposition on the grounds that it is unacceptable is to load the system against the Opposition twice. A majority is the basis of every functioning Government's ability to govern. That majority is an adequate safeguard to counter any proposed legislation from the Opposition that the Government disagrees with.

As I have said, Article 17.2 in its current form is an importation and unfortunate inheritance of the British system that serves us poorly, based on the practice of attaining the assent of the Crown before the collection of public money is allowed. Although the prohibition enshrined in Article 17.2 persists in this State and in Britain in a different guise, the rules have been relaxed with looser interpretation in Australia and Canada. We should not aim just to be like Australia or Canada; we should aim for better.

During the Convention on the Constitution, Professor Meg Russell of University College London expressed surprised upon learning that this State continues the practice of banning the introduction of Bills and tabling of amendments by Members of the Opposition.

As I said before, amending Article 17.2 of Bunreacht na hÉireann was a recommendation of the constitutional convention. That recommendation was kicked to the Select Committee on Arrangements for Budgetary Scrutiny, where it was summarily dismissed after meeting only three times and has been held in cold storage ever since. This recommendation from the constitutional convention was ignored and not given the attention it deserved and was not acted upon.

This Bill paves the way for a referendum to repeal Article 17.2 of the Constitution. It is an article which does not serve the Dáil, its Member or citizens well. The Government could oppose this Bill because it is in its interest, as a centre of power, to do so. However, I ask the Government and other Members to take a different view. They know the recommendation of the constitutional convention to amend Article 17.2 has not been taken seriously, was not subject to serious deliberation since it was recommended and was thrown in the bin. That was the wrong approach. This Bill, were it to pass Second Stage, would move to Committee Stage, where the recommendation of the convention can be given the attention it deserves. Constitutional experts could be called in from here and abroad to look at how we modernise the Bill and ask the following question: is the prohibition of Bills and amendments with financial implications from Opposition Members good for the representation of citizens or is it not?

Does it empower the Dáil or does it muzzle it? The answers to these questions are clear and that is why I ask the Dáil tonight to support this Bill, so that it can progress to Committee Stage where Article 17.2 and the recommendations of the Constitutional Convention can be given the attention they deserve. It will then be up to the Members of this House now or in future to decide our own Standing Orders, our rules and our practices on the passing of legislation and where the legislation or amendments would incur a charge on the State or the people, and what should be appropriate or not. We should not be muzzled by Article 17.2 of the Constitution. As I have said on numerous occasions tonight, it is a relic of colonial times, a time when the Free State Constitution was being drafted and required the consent of the crown before any public moneys were spent by the new envisaged parliament.

We saw only last week how Article 17.2 has real effects on Members of this House. After a huge amount of attention being paid to the policy of the Government on investment funds or vulture funds in housing, which were snapping up residential property and pushing up house prices, the Government came forward with a resolution that increased stamp duty to 10% on a number of those homes, and exempted others. Not one member of the Opposition was able to increase the rate or decrease it. Not one of us was able to change the date on which the measure would come into effect, even by one day, as was attempted by a member of the Opposition. Every single amendment from numerous parties, including my own, that sought to vary the date or the rate was ruled out of order because of Article 17.2 of the Constitution.

People are elected to this Parliament to discuss, amend, legislate, debate and share our views. If we have this constitutional provision, which is a throwback to the times of colonialism, it frustrates us and shackles us in doing that. It makes a mockery out of really dealing with legislation and allowing us to table and discuss different ideas at an early stage of the legislative process. It is taking it to an extreme.

I understand that it would be the instinct of the Government not to allow this amendment to pass - to close it down because it means the control rests with the Executive and it has the monopoly - but I appeal to the Government to accept it. The matter was dealt with at the Constitutional Convention and in a vote a majority wanted this provision amended. Let us look at it in greater detail. Let us amend the legislation I have proposed if needed. I am open to that but let us have a proper grown-up debate on Article 17.2 and whether it is fit for purpose in a modern democracy and how we deal with the legislative process.

I am pleased to have the opportunity to speak on behalf of the Government on the Bill before the House this evening. Deputy Doherty's Bill from 2014 proposes that a referendum should be held with the aim of removing Article 17.2 from the Constitution. The drafting of legislation for the holding of any constitutional referendum requires detailed consideration of the proposal at issue. Significant analysis should be done on the implications of the constitutional change. There should be consultation with stakeholders and experts, legal opinions and analysis should be sought and, importantly, the fiscal implications should be closely investigated. Nothing of that nature is evident in this proposal. If such work had been done on this Bill, which proposes the deletion of one of the essential components of our democratic framework, it would have become clear that this is not a credible proposition. It is certainly not a Bill the Government can support.

Our parliamentary democracy, like very many others across the world, is founded upon a three-way balance of power between the Legislature, the Executive and the Judiciary. In any healthy democracy there exists a system of checks and balances between the Parliament, the Government and the courts. Bunreacht na hÉireann provides our democracy with just such a framework, one that has served this State well over the decades.

Article 17.2, which this Bill proposes to remove from the Constitution, states:

Dáil Eireann shall not pass any vote or resolution, and no law shall be enacted, for the appropriation of revenue or other public moneys unless the purpose of the appropriation shall have been recommended to Dáil Eireann by a message from the Government signed by the Taoiseach.

Put plainly, the deletion of this provision from the Constitution would have a detrimental impact on the important balance of power that lies between the Legislature and the Executive. Article 17 cannot be read in isolation. It is not a stand-alone proposition in the Constitution, but rather one that must be read in conjunction with Articles 11, 21, 22, 24, 28 and 33, as together they address the State's finances. In essence, when read together they provide that neither the Executive nor the Legislature can validly authorise the expenditure of public moneys without the consent of the other branch. In this way, they provide us with what might be seen as a double lock.

Article 11 of the Constitution creates a Central Fund and provides that:

All revenues of the State from whatever source arising shall, subject to such exception as may be provided by law, form one fund, and shall be appropriated for the purposes and in the manner and subject to the charges and liabilities determined and imposed by law.

Article 17 of the Constitution provides routes for the Dáil to address financial matters through the Estimates process, the Appropriation Acts and under specific legislation. Article 17.2 provides that the right of initiative in relation to public finance is vested in the Government. This is reflected in our Dáil Standing Orders which are agreed by this House and provide that a Bill or an amendment to a Bill which imposes or increases a charge upon the people or appropriates revenue or other public moneys, or a motion to grant money for the public service, can be initiated only by a member of the Government. Furthermore, any motion to grant money must be decided without amendment. Accordingly, in relation to expenditure, taxation, or charges on the people, it is for the Government to initiate the proposals and place them before the Dáil for approval. It is then for the Dáil to either approve or refuse the measures proposed.

The concept of the balance of power between the Legislature and the Executive is further emphasised by looking at Article 17 in conjunction with Articles 15 and 28. Article 15.2.1° states that "the sole and exclusive power of making laws for the State is hereby vested in the Oireachtas: no other legislative authority has powers to make laws for the State."

Article 28.2 states that "the executive power of the State shall, subject to the provisions of this Constitution, be exercised by or on the authority of the Government." Therefore, neither the Government nor the Legislature can validly authorise the expenditure of public moneys without the approval of the other. This is a fundamental proposition of our constitutional model.

Article 28.4.1° states that "the Government shall be responsible to Dáil Eireann". As it is the Government that is accountable to the Dáil, the absence of Article 17.2 would mean that the Dáil would be free to initiate spending proposals, but without the corresponding, essential accountability to the Dáil for such expenditure. It is evident, therefore, that Article 17.2 of the Constitution is an important provision to support the sustainable management of the public finances. It reflects the Government's responsibility for raising revenue and its accountability for expenditure within the overall constitutional framework. Such decisions lie across the full range of policy areas, including health, justice, education, social protection, climate, the arts, sport, an Ghaeilge, defence and many others. Given the need to ensure any legislative proposals on additional spending or tax matters can be funded within the overall financial resources available, Article 17.2 provides an important safeguard. This provision supports the sustainable funding of legislative proposals within the context of the national and EU fiscal parameters and the fiscal position of the State, including the overall level of debt.

The management of the public finances is subject to both domestic and EU legislation. Fiscal policy must comply with the Stability and Growth Pact and the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union in which the budgetary and debt rules were given effect by the Fiscal Responsibility Act 2012. Given that the Government must operate its budgetary policy within this legislative framework, a key consideration of legislative proposals that have fiscal impacts is the potential funding implications that may arise.

While Deputy Doherty's Bill presents itself as the foundation for what he terms an "inclusive budgetary process", it is far from clear how this proposal genuinely achieves that aim. In opposing this legislation, the Government is certainly not opposing an inclusive budgetary process. In this regard, a number of reforms have been implemented in recent years to support a more open budgetary process and to facilitate greater engagement with the Oireachtas.

The programme for Government commits to a continuation of this process of reform. Budgetary reforms in recent years have included the publication of the summer economic statement and the mid-year expenditure report which supports advanced pre-budget scrutiny. Alongside the mid-year expenditure report, the spending review papers are now published. Among the objectives of the spending review process are the assessment of the effectiveness of public spending in delivering on policy objectives and the development of policy making informed by evidence.

Performance budgeting has been a key focus of budgetary reform. With the change in the budgetary timetable in 2013, and the Revised Estimates Volume, REV, now being published in December each year, this provides an opportunity for earlier engagement by Oireachtas committees with the Estimates. The REV itself has developed significantly in recent years and now routinely includes details on activities, outputs and context-specific outcome indicators. Dáil reform has also seen the establishment of the Committee on Budgetary Oversight in 2016, which has enhanced the role of the Oireachtas in the budgetary formation process. The committee carries out ex ante scrutiny of revenue and expenditure options before the budget. It also does ex post scrutiny to evaluate budget measures or to assess how budgeted spend or revenue projections compare with outturns. It monitors macroeconomic developments and fiscal risks and prepares an annual pre-budget report. This budgetary reform also included the establishment of the Parliamentary Budget Office which assists the committee through providing it with evidence-based research and analysis.

All of these reforms have facilitated greater input by the Dáil in the overall budgetary process; indeed, one might say it is an inclusive budget process. The principal point at issue is that while the Executive has the right of initiation in regard to the expenditure of public moneys, the Dáil is the only body that can approve any such proposals. The Government is accountable to the Dáil for any such proposals. These constitutional propositions form part of the fundamental building blocks of our democratic parliamentary arrangements. They have, as I said, served the State well over the decades. The deletion of Article 17.2 would seriously undermine the balance of power between the Legislature and the Executive, and could also have grave consequences for the economy.

Nearly 300 years ago, Montesquieu laid out the basis of the doctrine of the separation of powers as we know it in his famous work, "The Spirit of the Laws". His fundamental political premise has been and continues to lie at the heart of every functioning parliamentary democracy the world over. The key is to have checks and balances between the different branches of the State. Article 17.2 of the Constitution, in its own perhaps understated way, is a crucial part of this balance of powers in our democratic system when it comes to the expenditure of the people's money. It is essential that it remains part of our Constitution. The Government is opposing this Bill.

As there are no other speakers, the Minister of State can speak again a second time. He will not be entitled to come in after the proposer speaks.

No, I think I have covered it.

The Minister of State talked about scrutiny of this legislation and he will be well aware that the next step in the legislative process is pre-legislative scrutiny. If he had responded to my contribution as opposed to just reading the script, he would have heard me say that the next step would allow us to really scrutinise the implications of the recommendation of the Convention on the Constitution, which was to amend Article 17.2 of the Constitution. He would have heard me say that we would have the ability to bring in constitutional experts from home and abroad to look at the implications, and to ask the question of whether it is a good or a bad provision at this point in time, and whether it muzzles and stifles debate in our democracy. That is the next step.

The Minister of State, or at least the officials who drafted his speech, try to present this as coming out of the blue. It did not come out of the blue. This has been in the ether for seven years. This was dealt with by the Convention on the Constitution. Are the Minister of State, his officials or those in the Department of Finance - it is a pity the line Minister is not here - genuinely suggesting that the Convention on the Constitution did not give this adequate scrutiny, did not listen or did not weigh up properly the different types of testimony that was received at that convention over a period of days? I quoted some of the testimony, for example, that of the professor from London who was surprised that this provision was still enacted in this State.

The Minister of State says this is essential in terms of the balance, and I can understand some of the argument. However, this is not the case in all modern democracies across the world. As I said, this was a throwback to the issue of colonialism. If this was amended or repealed, it would be for us, as legislators, to set our Standing Orders. The Standing Orders are not something we can freely choose in this case; they have to be in line with the Constitution, and the Constitution, as a result of Article 17.2, places strict criteria on this House in terms of what type of Standing Orders we could have in this regard. It might be the case that there would still be strict prohibition in regard to amendments on final stages of legislation that would have a charge on the people or not. However it is the height of ridiculousness, in my view, that Members of this House and, in some cases the majority of the House, as, for example, under the last Government, could hypothetically want to decrease a charge on the public or, indeed, increase a charge on the people, which would bring in additional revenue to the State, and we would not even be allowed to debate that.

This provision in the Constitution has prevented elected representatives of this House from even introducing legislation on First Stage, from even talking about what type of safeguards we, as a Parliament, could or should put in place to make sure it was adequately scrutinised and that it had passed whatever hurdles needed to be passed. We cannot make sure, as the Minister of State said, that there would be no disruption to the economy, and that it would properly be thought out and teased out before enactment of any amendment or resolution. The idea that we cannot even debate, as legislators, or cannot even publish legislation is beyond belief and is taking this to the extreme.

I said in my opening contribution that I was not aware where the Government was going to go with this but, as I said, it is the instinct of Government to vote against this legislation, and not only to vote against it, but to not even allow it to be discussed at the next stage. The Government can decide not to allow this legislation to proceed after the scrutiny but what it is basically doing tonight, through its vote, is exactly what Article 17.2 of the Constitution does. It stops and stifles debate and it prohibits the Opposition from even being able to discuss in a proper way the proposals that it has. That is deeply regrettable.

There are buzzwords that fly around this place. They usually fly around after an election, and “new politics” was the one after the last election. By God, this is the same old politics. This is the Executive saying, “You will not go any further.” We have this scenario and it will be just as ridiculous over the coming months. Members of this House pass their own legislation. I have passed two pieces of legislation and enacted them into law. Key provisions of one of my pieces of legislation will come into effect later in September. I have another piece of legislation that will be before the House on Tuesday and other pieces that are on Committee Stage. Therefore, I am familiar with the legislative process and I am also familiar with how to get legislation passed, despite Article 17.2. However, let me say clearly what I think every Member of the Opposition and, indeed, Government Members know, as many of them were there themselves, namely, this is an outdated provision. If it is not repealed, it should be at least amended. If the Government is not even willing to go that far, I would appeal to it to at least allow it to be discussed. That would show respect to the members of the Convention on the Constitution who sat between 2012 and 2014, held their deliberations, listened to the experts, voted on the matter and believed that Article 17.2 of the Constitution needed to be amended.

I will leave it at that. It is deeply disappointing to hear what the Government has said.

The Government can talk all it wants about parliamentary reform and all that stuff; they are just more buzz words. However, when we are dealing with legislation there is so much acrobatics with reports on this and that, it is just nonsense. The fact that none of the more than 70 Opposition Members of this House could not even change a date in legislation last week screams loudly that there is a problem with Article 17.2. Until this article is either amended or repealed then we in this House will be unable to relax our own Standing Orders to allow for consideration at least at an early stage and debate our proposals. Instead, we cannot even put those proposals forward because of this article.

Cuireadh an cheist.
Question put.

In accordance with Standing Order 80(2), the division is postponed until the weekly division time next week.

The Dáil adjourned at 6.12 p.m. until 2 p.m. on Tuesday, 1 June 2021.