Budget Process

Dáil Éireann Debate, Tuesday - 17 November 2020

Tuesday, 17 November 2020

Questions (94)

Gerald Nash

Question:

94. Deputy Ged Nash asked the Minister for Public Expenditure and Reform his views on a recent report by the Oireachtas Committee on Budgetary Oversight, which suggests that parliamentary oversight in the budgetary cycle may be suboptimal; his plans and proposed timeframe for reforms of the budgetary process to improve parliamentary oversight in view of increased public expenditure during the Covid-19 crisis; and if he will make a statement on the matter. [36582/20]

Oral answers (7 contributions)

Deputy Ged Nash

The Committee on Budgetary Oversight published a report this month entitled An Overview of Comparative Parliamentary Engagement in the Budgetary Cycle. The report notes that despite some improvements that have been made since the previous financial crisis "parliamentary involvement in the budgetary cycle may still be suboptimal", which is code for terrible and it really is terrible. I want to hear from the Minister what plans he has in regard to enhancing the robustness of our parliamentary democracy and our parliamentary oversight in terms of how we allocate resources in this country.

Deputy Michael McGrath

I thank the Deputy for the question.

With a view to increasing the transparency of the budgetary process and to facilitate meaningful dialogue on key elements of the budget, over the past number of years, a range of reforms have been implemented to enhance the budgetary framework and ensure that expenditure is managed in an efficient and effective way. These reforms feed into a year-round budget cycle, which allows for ongoing scrutiny of the budgetary process supported by the provision of useful information.

Adopting a whole-of-year budgetary framework is a key component of this process. It ensures that consideration of budgetary priorities can occur throughout the year and is not confined to focusing on the measures announced on budget day.

The impact of Covid-19 has necessitated very significant additional spending in 2020, with an expenditure response beyond anything that has been seen in Ireland before. I should acknowledge that some of the information documents that we aim to provide to inform budget scrutiny have been impacted during the crisis response. Notably, as the Deputy is aware, the mid-year expenditure report was not produced in July as normal. Instead, my Department produced a pre-budget expenditure update after the summer and in advance of the presentation of the October budget.

Looking forward, from 2021 onwards, the programme for Government commits to continuing reform of the budgetary process.  This includes a commitment to the development of a set of well-being indices to create a well-rounded, holistic view of how society is faring. It is intended that these well-being indicators will be used to highlight inequalities and ensure that policies are driven by a desire to do better by people.

Throughout this process of reform, I and officials in my Department will continue to be available to engage with the Committee on Budgetary Oversight in exploring ways to build on the expenditure reforms that have been put in place and to further enhance the opportunities for the Oireachtas to make a meaningful impact on the budgetary cycle.

Deputy Ged Nash

Of course, the Committee on Budgetary Oversight is now in place, as is the Parliamentary Budget Office. They are two very important innovations in terms of robust oversight of expenditure and budget planning in terms of the parliamentary process. Those innovations were introduced in response to the previous financial crisis and deficits identified by international organisations in terms of best practice in this country.

To boil it down, a small number of approximately 15 individuals, with the Minister, Deputy McGrath, and the Minister for Finance, Deputy Donohoe, at the top of that tree if I can describe it as such, are responsible for the allocation of resources. That is suboptimal. It is nowhere near best practice. In my view, this Parliament needs to be empowered and provided with the resources, organisational capacity and financial authority to ensure that the allocation of the resources we have are targeted in the best and most democratic way possible. There is much more we can do to make that a reality. We have a lot of work to do in this space. I am only too willing to work with the Minister in that regard. I am pleased to see his commitment around the introduction of well-being indices, which are an important feature of budgetary planning.

Deputy Michael McGrath

I wish to acknowledge the tremendous work of the Committee on Budgetary Oversight. In the previous Dáil, I was a member of the committee and really enjoyed that role. It is a great opportunity to get one's teeth into various issues. I also commend the work of the Parliamentary Budget Office. The quality of material it produces for all Members is very high and that should be acknowledged. If there are any issues around resources and so on, I am sure that is a matter for the Houses of the Oireachtas Commission. However, great strides have been made. It was a very important reform for Deputies across the House to have access to that resource.

This was my first budget and I learned a lot. On coming into office, I was immediately into the process of almost a mini-budget in the form of the July stimulus process. I genuinely want to work with the Deputy and other members of the committee to improve budgetary performance and introduce performance and equality budgeting, as well as working with them on the outcome of the spending review process in which my Department is continuously engaged.

Deputy Ged Nash

I hope the Minister will agree that, constitutionally, the Dáil has a very important function in terms of the allocation of resources. It behoves the Executive to provide a more balanced approach to budget planning and to ensure not just that resources are made available to the Dáil in our consideration of budgets and financial matters, but that the political will is there to provide the House with the ability to do that and to work collectively in terms of targeting resources where they are needed most. That is a job that would greatly enhance our democracy. As I stated, I am glad the Minister has agreed that well-being indices should be a feature of the process going forward. He will be familiar with legislation developed by my colleague, Deputy Howlin, which was published and passed Second Stage in 2017. I will be bringing forward legislation in that space to constructively enhance the function of the Parliament in developing budgets going forward.

Deputy Michael McGrath

On the process in 2020, it has been a truly extraordinary year, the like of which we hope we will never see again. It certainly had a dramatic impact on the budgetary process. I have acknowledged that the mid-year expenditure report was not published at the normal time. In addition, the Oireachtas did not have the normal summer economic statement setting out the overall macroeconomic and fiscal projections. That was certainly missed as well. The truth is that events unfolded extremely quickly through the year. Certainly since I came into office there have been very rapid changes in circumstances and the Government has had to respond in an equally rapid manner. There are improvements that can be made to the process, even to the normal process which we did not have this year. I will engage with the Committee on Budgetary Oversight to bring about further enhancements to the budgetary oversight process because the Oireachtas should have an advanced role in that regard.

An Ceann Comhairle

If I may comment, insofar as the Oireachtas has a heavy responsibility in this particular area, I was really interested in this question because I took a key and active interest in the establishment of the Parliamentary Budget Office and the Committee on Budgetary Oversight during the previous Dáil. The question states that parliamentary oversight in the budget cycle may be suboptimal. That suggests to me that we need to be looking into our own hearts, not challenging the Minister. I am no apologist for any Minister. As the Minister, Deputy McGrath, stated, we may need, within the Houses of the Oireachtas, to look at the resources that are available for the committee and its work.

Questions Nos. 95 to 97, inclusive, replied to with Written Answers.