Written Answers. - DIRT Inquiry.
Brendan Howlin
Ceist:
44
Mr. Howlin
asked the
Minister for Finance
the progress that has been made to date in implementing the recommendations of the Committee of Public Accounts arising from the DIRT inquiry; and if he will make a statement on the matter.
[23469/00]
The Deputy will be aware that, on 20 June last, the Sub-Committee on certain Revenue matters of the Committee of Public Accounts carried out a full review of the progress made to date in relation to the recommendations contained in its report on the DIRT inquiry. The sub-committee had a further meeting on 11 July in relation to a number of specific issues and intends to revisit all issues at a special two day meeting to be held on 30 November and 1 December next. The Government is committed to implementing, where possible, the recommendations made by the Sub-Committee of the Committee of Public Accounts in relation to the DIRT inquiry. I have ensured and will continue to ensure that work in dealing with the recommendations will be given top priority in my Department. The up-to-date position in relation to the main recommendations contained in the report for which my Department has direct responsibility are as follows.
The Finance Act, 2000, implemented a number of recommendations made by the sub-committee in relation to the audit powers of the Revenue Commissioners, the reporting by Revenue to the Committee of Public Accounts on the results of the DIRT look-back audit currently under way and the appointment by Revenue of outside auditors. In addition, the Act provides for the enhancement of the powers of the Revenue Commissioners to publish settlements. A small number of the recommendations of the report could not be implemented in the Finance Act for legal reasons. The Attorney General advised that there would be difficulties in making provision to implement a limited number of the recommendations of the sub-committee where this would involve the retrospective introduction of penalties. This advice is founded on Article 15.5 of the Constitution which prohibits retroactive penal legislation. The Attorney General also advised that there would be difficulties in introducing a provision which would affect a narrow class of taxpayer, DIRT inquiry financial institutions.
I set up a steering group following a recommendation by the sub-committee in its report, to carry out a general review of the Office of the Revenue Commissioners. The report of the review, which was noted by Government, was submitted to the Committee of Public Accounts on 1 September and was published by it on 5 September. The sub-committee also sought submissions on the report through public advertisements in the national newspapers which were placed by my Department at its request. The sub-committee will examine the report in detail on 30 November. Following this examination and any recommendations the sub-committee may make, I will submit proposals to Government.
It is my intention that future financial services legislation will incorporate appropriate provisions incorporating the sub-committee's proposals for ensuring that the regulatory authority for the financial services sector is formally empowered to promote high standards of corporate governance, probity and transparency in the financial services industry. In the meantime, the Central Bank itself has taken a number of initiatives in this area. It has requested all credit institutions to submit their corporate governance framework and their procedures for reporting compliance with legal and regulatory requirements to their board. These are being reviewed as part of the bank's ongoing supervision. In addition, the Central Bank required all credit institutions to send it their internal codes of ethical practice and the practical implementation of these codes is now included as a routine element in its inspections and review meetings. I also understand that the Irish Bankers' Federation is close to finalising its code of ethics and practice for publication.
Under the Finance Act, 1999, the Revenue Commissioners have direct access to the financial institutions by way of audit. In examining the case of such access both the Department and Revenue considered whether the UK system of an independent auditor was to be preferred. The view was taken that it was better to provide for direct access by Revenue so that Revenue could be fully satisfied that the inquiries were complete and comprehensive. Nonetheless, in the light of the Committee of Public Accounts report, provision was made in the Finance Act, 2000, to allow the Revenue Commissioners to appoint persons whom they consider to have relevant qualifications-experience to carry out audit work, but only as an adjunct to, and not an alternative to, direct access by Revenue itself. The provision is to be used at Revenue's discretion.
Following the Government meeting on 11 April, I published my outline proposals for dealing with dormant accounts in financial institutions. I also initiated a consultation process with representative bodies on those proposals. These consultations have concluded and I have circulated revised proposals by way of a draft memorandum for Government to other relevant Departments. I would hope to be able to submit a final memorandum, together with heads of a Bill to Government in the near future for consideration and decision. The scheme, as approved by Government, would then be referred to the Office of the Parliamentary Counsel to the Government for formal drafting of the enabling legislation. I hope the Bill can be published by end-2000 or early 2001.
I will shortly submit proposals to the Government in response to the sub-committee's recommendation for the establishment of an Oireachtas commission.
A draft code of conduct for civil servants has been prepared and will be submitted to Government for approval in the near future. The proposed code includes provisions which are aimed at avoiding a conflict of interest where officials accept an outside appointment or consultancy engagement following resignation or retirement from the Civil Service. Following consideration by Government the code will be referred to the Joint Oireachtas Committee for Finance and the Public Service and discussed with the Civil Service unions.
The post of parliamentary legal adviser was sanctioned and an appropriate competition held by the Civil Service Commission earlier this year. The successful candidate has recently taken up duty at the Houses of the Oireachtas.
I will shortly submit proposals to the Government in response to the sub-committee's recommendation that the Houses of the Oireachtas be empowered to appoint a parliamentary inspector from time to time.
I am of the view that the existing range of powers available to the Oireachtas committees is sufficient to allow the chairmen and chief executive officers to be held accountable for the strategies being pursued by their companies and the achievement of performance targets. My Department is currently finalising an updated code of practice for the governance of State bodies, in consultation with State-sponsored bodies and parent departments. The guidelines represent an updating and expansion of the guidelines issued by the Department in 1992. In contrast to the earlier guidelines, it is proposed that the new guidelines should be made mandatory. In the light of the concerns expressed by the committee, I intend, when issuing the guidelines, to indicate clearly that chairmen and chief executive officers should fully co-operate with Oireachtas committees as they carry out their inquiries and that all information sought should be made available, unless it is genuinely commercially sensitive, or involves a bona fide confidence.
I will shortly ask the Government to take decisions on the sub-committee's recommendation in regard to the direction of witnesses appearing before Oireachtas committees.
I will shortly submit my proposals to the Government for consideration in relation to the sub-committee's recommendation that the ordinary work of the Committee of Public Accounts should be under direction.
The Attorney General has advised that any such involuntary levy would offend the Consti- tution. The Attorney General has also advised that a levy cannot be introduced retrospectively. This advice is founded on Article 15.5 of the Constitution which states that ‘the Oireachtas shall not declare acts to be infringements of the law which were not so at the date of their commission'.
A small working group has been set up to undertake the comparative study. Considerable work has been done on the preparation of the base material for the study and further meetings of the working group will take place shortly. It should be noted that only one parliamentary inquiry has been established to date. The fact that there has been several tribunals and only one parliamentary inquiry may limit the validity of the conclusions to be drawn from the study.
The Deputy will appreciate that other recommendations made are the functional responsibility of other Ministers and some recommendation are for the Houses of the Oireachtas themselves.
