Committee on Budgetary Oversight has published its Post-Budget 2023 Report

Speaking on the report, Deputy Neasa Hourigan, Cathaoirleach of the Committee said “As noted in the Committee on Budgetary Oversight’s Pre-Budget report, the challenges posed by inflation, rising energy prices, and the cost-of-living crisis require significant State intervention. Given these challenges and the extraordinary economic context in which Budget 2023 was considered, it is important that both the measures provided for, and the processes involved, are examined and that any issues that arise are made known.”

Deputy Hourigan said “It is in this context, the Committee held a series of meetings examining the impact of the budgetary measures, both on the general public and in the context of the wider economic environment.”

The Deputy said “The Committee has made a number of recommendations and observations that it hopes will provide additional clarity on the impact of the measures contained in Budget 2023 and strengthen the budgetary process into the future.”

You can read the full report here

Recommendations made in the report include:

1. The Committee notes and recognises the value of programme-level/performance budgeting and recommends that the Department of Finance and the Department of Public Expenditure and Reform introduce such budgetary measures as soon as possible. If necessary, the Committee recommends that a pilot programme of performance budgeting be carried out, with DPER to report back to the Committee when complete.

2. The Committee acknowledges and welcomes the work being done on implementing equality budgeting, green budgeting and well-being budgeting across a range of programmes.

3. The Committee notes the additional detail provided for in the Revised Estimates compared to that provided for in the budget expenditure report and recommends that the Department of Public Expenditure and Reform endeavour to include this detail in future budget expenditure reports.

4. The Committee notes the difficulties in maintaining living standards in the current inflationary environment, particularly for those on low incomes and those reliant on social welfare, and as such recommends that consideration be given to indexing welfare payments to inflation in forthcoming budgets.

5. The Committee acknowledges the importance of one-off measures used in Budget 2023 but notes that one-off measures for lower-income households should not become a regular feature of the Budget.

6. The Committee welcomes the inclusion of the “underlying general government balance”, or the underlying fiscal balance excluding the Department’s estimate of windfall corporation taxes, in the 2023 budget documentation.

7. The Committee notes the concerns raised by the Fiscal Council with regards the short budgetary forecasting horizon for Budget 2023 and recommends that the Department of Finance return to previous commitments to produce five-year forecasts.

8. The Committee notes the temporary deviation from the 5% spending rule and acknowledges the rationale for doing so given the challenging budgetary environment. However, the Committee recommends that this rule be reinforced in forthcoming budgets, and that consideration be given to establishing this rule on a legislative basis.

9. The Committee acknowledges that the decision to pay the Christmas bonus is dependent on the government’s fiscal position each year. However, the Committee notes the uncertainty this introduces for households every year and as such recommends that the decision to pay such a bonus be signalled as far in advance as possible.