Vol. 617 No. 3
5 Mr. Gogarty asked the Minister for Finance if he is planning to draw up guidelines to provide training for public officials with regard to reporting corruption; and if adequate protection to public officials who act as whistleblowers, as recommended by the GRECO group of the Council of Europe, will be provided. [12411/06]
As the Deputy is aware, the GRECO initiative, the group of states against corruption, is a body set up under the aegis of the Council of Europe to monitor and evaluate measures against corruption in member states.
A recent evaluation recommended that Ireland should introduce guidelines and training for public officials about reporting instances of corruption, or suspicions of corruption, which they come across in carrying out their duty. It also recommended establishing protections for public officials who make such reports.
Ireland already has extensive legislation to deal with standards in public life, including corruption. Provisions are contained principally in the Public Bodies Corrupt Practices Act 1889, the Prevention of Corruption Acts of 1906 and 1916, the Ethics in Public Office Act 1995 in relation to registrable interests, and the Prevention of Corruption (Amendment) Act 2001. Collectively, this legislation makes illegal all forms of active and passive corruption in both the public and private sectors. I also refer to section 5 of the Standards in Public Office Act 2001 that provides protection against dismissal in certain circumstances where a person makes a complaint in good faith to the Standards in Public Office Commission.
In the Civil Service, for which I have particular responsibility, there are special measures in place on the prevention of corruption. There are clear guidelines for civil servants on the standards of behaviour expected. A new and modernised Civil Service Code of Standards and Behaviour was drawn up in consultation with the staff side and issued to all civil servants in 2004. The code requires, in the public interest, the highest standards from staff at all levels in their dealings with the public and in handling public funds and property. Adherence to the standards laid out in the code is a term of employment of all civil servants.
The code was introduced in compliance with section 10(3) of the Standards in Public Office Act 2001 and therefore has a clear statutory basis. My Department is preparing a series of special courses on the code of standards and behaviour. I understand that the code is included as part of the induction courses for new staff held by Departments and offices.
I hope interference devices are not part of that code of practice. The Minister has not responded to my question. The GRECO group, the group of states against corruption in the Council of Europe, came into being because Ireland was one of the 14 countries which signed its ratification and, as a founder member, we should seriously consider its recent evaluation report. Apart from referring to the need for clear rules and guidelines for training public officials, the Minister has not commented on whether such training exists.
The report calls for more adequate protection for public officials who act as whistleblowers when they discover corruption. The group is calling for that protection and implies that it does not exist. GRECO points out that, in principle, nothing prevents a public official from reporting incidents of corruption to a superior, the Standards in Public Office Commission or to the Garda, as the Minister stated, but there is no legal obligation——
It is not in order for the Deputy to read a quote during Question Time.
I am not quoting specifically but rather paraphrasing what is stated in the report. What I said was not a quotation. I am pointing out to the Minister the recommendations in the report. Will the Minister specifically comment on GRECO's recommendation that there is no legal obligation or ethical guidelines to encourage public officials to act on behalf of whistleblowers? The one act the Government seems to be taking to deal with whistleblowing legislation is to move a motion during next week's business to strike off the Order Paper the only legislative means currently before us to deal with the problem, namely, the Labour Party's Private Members' Bill. If the Government were serious about whistleblowing, it would either adopt the Labour Party Bill or introduce its own legislation and thereby put to rest the deceit that whistleblowing can only be dealt with on a Bill by Bill basis in terms of every position in the Civil Service.
The Government has given considerable consideration to the issue. The Deputy will be aware that on 7 March my colleague, the Minister for Enterprise, Trade and Employment, explained our approach in some detail in a speech on the Whistleblowers Protection Bill 1999, which was tabled by Deputy Rabbitte and to which the Deputy referred. The Minister outlined a number of the complex legal issues which would have to be addressed before taking further steps to introduce formalised whistleblowing or reporting procedures. For example, questions arise about the treatment of intellectual property rights or trade secrets which might be affected, the Official Secrets Act 1963 and its implications for civil servants, the number of protections that might be required under the Unfair Dismissals Acts 1977 to 1993 for employees who whistle-blow reasonably and in good faith.
The Minister made clear the Government's decision to address the issue on a sectoral or case-by-case basis, that is, the possibility of including appropriate whistleblowing provisions would be examined on a case-by-case basis when individual Bills arise. This is the correct approach to adopt. The Minister also pointed to a number of Acts in which reporting procedures have been included.
I outlined the legislation in place already and referred to the provisions in the Standards in Public Office Act 2001 and the protections provided in this Act against dismissal in certain circumstances. We must be clear that the introduction of whistleblowing arrangements in the civil and public services would have to be carefully considered. In the Civil Service officials work to advise Ministers in Government on carrying out their decisions. To move quickly to a general system of whistleblowing or reporting on alleged wrongdoing or corruption could seriously undermine Departments or offices in carrying out their function on behalf of Government. It is one matter to consider a system designed to deal with wrongdoing or corruption but it is an entirely different matter to introduce a system which might in effect become a means of criticising Government decisions and policies. The introduction of formal whistleblowing procedures would be a major step the Government would have to consider very carefully.
The case-by-case approach outlined by my colleague, the Minister for Enterprise, Trade and Employment, is the correct one. Under this approach, when legislation relating to the Civil Service is being considered we can examine the possibility of including well defined measures for appropriate reporting procedures in particular areas. It would, however, be wrong at this stage to give any general commitment as to what might be done.
The Deputy should also be aware that management systems in the Civil Service can address the issue of corruption. It is not only a question of relying on the legislation and codes of standards and behaviour. The Mullarkey report endorsed by Government made a number of recommendations aimed at strengthening internal control systems in Departments and offices and these are being implemented. For example, Departments and offices must have risk assessments and management systems in operation that are integrated in their management processes. Greater awareness of issues of risk will make management more aware of how to deal with reports of malpractice or corruption.
I am surprised the Minister's main concern appears to be that legislating for whistleblowing on a broad basis would undermine Ministers' policies. This is a new argument. I find it hard to believe it is beyond the wit of parliamentary draughtsmen to draw up provisions that would provide for whistleblowing while ensuring they have no basis for undermining ministerial policies. Notwithstanding this, surely in the modern world freedom of information, transparency, declarations of interest and so forth — the Minister, for example, emphasised the need for transparency and accountability — are all designed to make public decisions more transparent and open to scrutiny. It is strange the Minister defends the decision not to introduce whistleblowing legislation on the grounds of wanting secrecy. Is it not the case that regulators are turning up breathless and late when problems arise, whether in the areas of nursing home standards, failures in computer systems, the planning system, banking etc? The list goes on and on yet the Government has chosen to perpetuate this system.
Will the Minister elaborate on the ethics and anti-corruption training available to civil servants? Do participants have an opportunity to study the reports published by the beef tribunal or Flood tribunal into planning corruption in the Dublin area? What precisely do civil servants study when taking part in this training? What is the position in the event that a civil servant becomes aware of a matter such as that investigated in Our Lady of Lourdes Hospital in Drogheda where a midwife trained outside the State was brave enough to pursue a wrong? This is the reason we want protection for whistleblowers who are often the only protection available for the public good and interest when an official system acts wrongly. The Minister's only concern is that a Minister might have a bad day out. This is an extraordinary response and I ask him to elaborate.
I did not make the response the Deputy describes and it is a misrepresentation to suggest I did. I simply made the point that one must consider the need to ensure the relationship between the Civil Service and Government is not compromised or undermined. I also noted that while it is one matter to consider a system designed to deal with wrongdoing or corruption, one also requires a means to ensure one does not have a generalised provision which could be used to change the essential relationship of trust and confidence between a Minister — a politician — and the Civil Service, the integrity and independence of the Civil Service is respected and maintained and the role of adviser and implementer of policy decisions is not compromised. The Government's argument is not that we should not have provisions but that we must carefully consider all these issues and deal with the matter on a sector by sector basis. A full articulation of the Government's position on the issue, as opposed to a misrepresentation of my comments, is best gauged and considered in the speech made by the Minister for Enterprise, Trade and Employment during the debate on the Labour Party Bill. That is my view on the matter.
6 Mr. O’Shea asked the Minister for Finance the progress made to date with regard to the implementation of the 12 point programme to improve value for money in public spending, announced on 20 October 2005; and if he will make a statement on the matter. [12386/06]
As I indicated in my reply to Question No. 76 on 28 February, I wrote to my ministerial colleagues on 20 October last enclosing a copy of my address of the same date to the Dublin Chamber of Commerce and requesting them to ensure their Departments take all the necessary steps to implement the measures set out in my address. My Department issued a circular letter to all Departments on 25 January last outlining in detail the requirements to give effect to the measures in my announcement of 20 October 2005 as well as earlier decisions made by Government on ICT and consultancy procurement. Copies of the circular letter were also placed in the library of the House.
The circular included changes to existing guidelines on public procurement, consultancy and capital appraisal and outlined the necessary additional steps being taken to give effect to the various value for money measures announced. It is primarily a matter for individual Departments and their agencies to make the necessary arrangements and implement the changes arising in their area. Follow up on a number of measures outlined in the circular of 25 January last fall within the direct responsibility of my Department.
With regard to fixed price contracts I am pleased that the consultation with the industry on the introduction of these contracts for public works is almost complete. Following essential training of relevant public sector staff, the contracts will be available for use as soon as possible in 2006.
My Department has also set up an inter-departmental review group on the guidelines on commissioning consultants. This group will report by mid-year and any necessary action on foot of the review will be implemented as a matter of urgency. The peer review process for major ICT projects is now operational and four reviews have already started. My Department is co-ordinating work on setting up these reviews. While the peer review process is a worthwhile initiative and an additional safeguard in the development and implementation of IT projects, it does not override the accountability arrangements in place within organisations.
As regards recruitment and training of specialist staff in ICT projects and consultancies, my Department is conducting a survey of all Departments seeking details of areas where skills shortages currently exist. In addition, the Civil Service training and development centre in my Department has modified the content of its policy analysis and capital appraisal guidelines training programmes to better reflect the new value for money requirements and is putting in place a new project management course aimed at those in the public service who procure and manage capital projects.
What are the practical implication of the steps outlined by the Minister for some of the disasters over which this Government has presided? Last week, the Committee of Public Accounts was told that a commitment has been made to rent premises for the machines at a cost of €700,000 per annum or another €14 million. How does the Minister's new system accord with that?
Todays newspapers reported on the court case between the National Aquatic Centre and Campus Stadium Ireland Development, of which the Minister is one of three shareholders, concerning a sublease used by a businessman to attract tax breaks of €2.8 million per year, with a cap of €34 million, on a State funded public infrastructure project costing €62 million. I visited the complex on several occasions and found major structural faults with it, including leaks and unacceptable use of treated water. I ask the Minister to go from the general to the specific by explaining how we will avoid similar fiascoes in future.
He apologised today for the €56 million in misplaced health services money which has apparently been rediscovered. Does anybody know how to keep the accounts of the Department of Health and Children?
Many of the measures referred to by the Minister in his 12 point plan are welcome but how are they being implemented and is he taking any personal responsibility for them? For example, along with the Taoiseach and the Minister for Arts, Sport and Tourism, he is a shareholder in Campus Stadium Ireland Development. This valuable project located in my constituency appears to be in jeopardy because of gross incompetence and mismanagement.
The additional matters I referred to with regard to value for money and dealing with ICT contracts arise from the PPARS problems which came to my attention over the course of last summer. I set out general procedures to be put in place by Departments which provide for more vigorous competition for public sector contracts, fixed price lump sum contracts as the norm for construction projects valued at above €30 million, the allocation of individual responsibility for capital projects, ex-ante evaluation, including economic cost benefit appraisal for projects costing more than €30 million, a formalised review by Departments and agencies of contracts for projects costing more than €30 million with reports to the Minister and provision for audit by the Department of Finance, a performance table for Departments and State agencies regarding the extent of project outcomes versus budgets on contracts and a range of other matters. As Minister for Finance, I asked my colleagues to ensure that, as the political heads of their respective Departments, they managed contracts and expenditure in the manner I suggested and that process is now in place. I augmented rather than replaced existing procedures to ensure sufficient controls exist to ensure proper public expenditure. These procedures will assist and reinforce our efforts in that area.
As regards specific projects which have proved problematic in terms of management and design or construction and completion, questions put directly to the Ministers concerned will elicit full and up-to-date information.
I welcome the Minister's reply but, given that he has provided for the ex-ante evaluation of projects costing more than €30 million, does he agree that PPARS as it was originally envisaged would not have been evaluated under that rule? Punchestown would not have been evaluated, even though it was a notorious project and cost a great deal of State money. E-voting as it was initially brought forward would not have been subject to ex-ante evaluation. The Minister is closing the door on some horses but a lot of the little money wasting ponies will escape these provisions.
Has the Minister assigned individuals to specific capital projects and can he provide us with a published list of who has been assigned to which project, so that everyone can know where responsibility lies?
The Minister announced this new programme almost six months ago. Can he now provide the performance table for Departments which he promised, if only for the first quarter of this scheme? The scheme will only make an impact if it is clear that the Minister is serious about it and if we are sure that performance is acceptable.
I have suggested that the performance table should be incorporated in the annual reports to the Department of Finance on the capital envelope investment programme under the statement of strategy and in the format outlined in the circular.
It is a matter for sponsoring Departments to assign responsibility. I do not intend to appoint people to every single project and Department but have set out the rules which should apply to each Department in respect of projects. I delegate the function of appointing responsible people to Ministers because the process would otherwise become cumbersome and ineffective.
A lot of white elephants start as baby elephants.
Regardless of the size of a capital project, the allocation of individual responsibility allows such a situation to be monitored. Rather than everyone knowing a bit about everything and nobody being responsible for making decisions consequent to a project becoming more expensive, the allocation of individual responsibility ensures problems similar to those alleged by Deputy Bruton do not arise.
Have the responsible individuals been appointed?
That is for Ministers to decide in each case.
The Minister is a shareholder in the National Aquatic Centre and, as such, retains the power to transfer shares and responsibility for the company. I ask him to comment on the court case.
I am also a shareholder in the ESB but I do not have a remit with regard to that company.
That relationship was established by law but such is not the case with regard to CSID.
My point is that the matter is dealt with by the line Minister with delegated responsibility. Questions arising with regard to CSID are best directed to the Minister of Arts, Sport and Tourism, who can make the full information available. I am answering questions on the general guidelines which I set out in October 2005 rather than on any specific issue.
7 Mr. Penrose asked the Minister for Finance the number of random audits carried out of the Revenue Commissioners in 2005; the way in which this compares with each year from 2002; the number expected to be undertaken during 2006; and if he will make a statement on the matter. [12390/06]
I have been advised by the Revenue Commissioners that 411 cases were selected for random compliance testing as part of the 2005 programme. A detailed evaluation of the results will be finalised once the approximately 60 remaining audits are completed. I am informed that Revenue's approach to random compliance testing changed significantly in the 2005 programme and this should be borne in mind when making comparisons with previous years. The traditional random audit programme was not carried out in 2004 due to the change in Revenue's approach following a review of the programme. However, 25 cases selected under the programme for previous years were completed in 2004.
I understand that 274 random audits were completed in 2003 and 720 in 2002. However, the selection for these years was not purely random because revenue districts narrowed down the initial random selection based on risk criteria. I understand the sample size in the 2006 random compliance testing programme will again be in the region of 400, the same as for the 2005 programme.
The Revenue Commissioners assure me they are dealing in a determined way with tax evasion by maximising the impact of their resource deployment through focusing on risk. This is strengthened by the random compliance testing programme, which ensures that all taxpayers are exposed to the possibility of a compliance check or audit. This approach is in line with best international practice.
In the record of year-end information on public servants and employment levels, the Revenue Commissioners are recorded as having 6,000 public servants last year and they are expected to continue with this number. There has been extraordinary success with the Ansbacher and DIRT inquiries etc. conducted by the Revenue Commissioners, which have to date, brought in more than €2 billion. This is despite the Minister's predecessor, Mr. Charlie McCreevy, on record stating that there was no pot of gold with regard to unpaid taxes. He was shown to be absolutely wrong.
Does the Minister accept, given that so many taxpayers file returns by self-assessment, that the number of random audits being carried out is way below what it should be if we compare it to the number in the United States, for example? Does the Minister accept that where people evade their proper taxes, despite most of our tax rates being quite low, the end result is to rob the health and education services of necessary funding to provide proper services?
Has the Minister any proposals to consider the resources allocated to the Revenue Commissioners with a view to expansion? This should be examined particularly in the context of what occurred last year with Gama and what has been disclosed this year with regard to various agency employers, which still appear to be able to fly below the radar of complying with tax and welfare obligations.
We have seen a great improvement in the compliance culture with regard to the tax administration system. The number of tax compliant citizens has greatly increased, with one of the reasons being the important changes brought about, particularly with regard to self-assessment for the self-employed. That has brought about a transformation which can be seen through the tax take obtained, in percentage terms, from self-employed people compared to the historical numbers.
In the 1970s and 1980s, when I first came into this House, one of the great problems was the huge estimates of tax liability suggested as being due. This was because the tax administration, if it had not quite come to a halt, was not working in a very effective or efficient way. That was even acknowledged by practitioners within the service itself, and we have seen a great transformation for the better. This has greatly enhanced public confidence in the taxation system. I acknowledge that the move away from punitive tax rates, which fostered a black and grey economy in the past, means that the vast majority of people are now in the system, working legally and meeting obligations.
There will always be a decreasing minority of people who do not meet their obligations fully and do not comply with tax Acts as they should. The Revenue Commissioners have been very effective in dealing with those matters. We have seen, through publication of defaulter lists, an effective mechanism that is a strong deterrent for people against taking risks of non-compliance with tax liabilities.
I take advice from the Revenue Commissioners on these matters, and they tell me the approach they take is in line with best international practice. They are continuously in consultation with other revenue organisations across the world, ensuring they have the most up to date technology and practices available to them to ensure they work effectively. Much congratulation is due to the management of the Revenue Commissioners, and the success of top management there has greatly improved the operation. Having spoken to the top management, I believe it to be a very well run organisation in the main.
Any justified request from the chairman of the Revenue Commissioners for extra staff is listened to with some seriousness by my Department. We should bear in mind our efforts to control public service numbers while recognising that front line staffing for important public services are not compromised. The chairman has made some requests in that regard and they are being processed in the normal way. Overall, we have much to be proud of in the way in which our revenue system works.
I welcome the progress made in this area. There is an issue of proportionality. Under the Revenue powers group recommendations the Minister was to come in with some recommendations on the gradation of powers. This related to the powers moving from audit to investigation to prosecution, and that there would be some test of reasonableness along the route. Is that coming through?
Apropos of Revenue powers, it has been stated to me that as there is a new revenue power to look at bank accounts, it could potentially be used to check on SSIA holders to see if they borrowed money to keep up the SSIA payments, compromising their savings scheme and making the entire amount liable for tax. Can we be assured that these powers will always be used in a reasonable way and that this type of action could not come out of the woodwork in future?
We can be assured that the powers will be used in a reasonable way and that the worries that some small account holders have on this matter are not well-founded. They are only to help with risk-based assessments, and it is only where the Revenue Commissioners see something which is obviously wrong in the context of other information that an investigation will occur.
Many of the Revenue powers group recommendations have been implemented, and they are often reviewed from year to year. Some recommendations were reviewed last year and some will be this year. I will have to check with my officials and update the Deputy on the power specifically referred to.
8 Mr. P. Breen asked the Minister for Finance if he has exercised his powers to block the emergence of a common corporate tax base; and if he will make a statement on the matter. [12506/06]
As I informed the House on 28 February, the European Commission has not yet made a formal proposal on the common consolidated corporate tax base. At the informal ECOFIN in September 2004, it was agreed that the Commission should establish a technical working group to consider such matters. While we opposed such a move, we are participating in the group without prejudice to our national position of opposition. As there is no proposal currently being examined by the European Council, the issue of exercising a block does not arise.
I welcome the Minister's opposition on the issue, and it appears this is the thin end of the wedge. We recently had the Commissioner for Taxation and Customs Union, Mr. László Kovács, speaking in the restaurant of Leinster House. It seemed to me that this was a Trojan horse in their view, and once the proposal was inside the tent it would mount enormous pressure on those who, like ourselves, believe they should have the freedom to set tax rates and codes. How does the Minister feel the issue will evolve? Does he foresee a danger of Trojan horse being created through this mechanism?
I met Commissioner Kovács and his officials when he visited and spoke in the environs of the Dáil. I conveyed our opposition to the overall project and told him I was not at all convinced of the case put forward. The Commissioner is resigned to the fact he will not get agreement among all 25 member states, but he is prepared to go the route of enhanced co-operation. He proposes to publish a stocktaking communication shortly and it is expected that the current Austrian Presidency will put it on the June ECOFIN agenda to get an overall view from member states.
As stated, we oppose it for both principled and practical reasons. Taxation is a matter of national sovereignty for each member of state. The right to choose the level of public spending and the funding of such expenditure is a basic function of the democratic process. It is necessary to protect the flexibility of tax policy in rewarding enterprise and the creation of jobs and growth in the economy. There is no evidence to suggest a common, consolidated, corporate tax base would address issues such as competitiveness, compliance costs for companies, transfer pricing etc. It would not simplify EU tax issues as the so-called optional system proposed would add another tax system to the existing 25. The harmonisation of the base would lead to pressure on national tax rates and the code of conduct on business taxation already successfully addresses harmful tax competition.
The CCCTB cannot be imposed on member states. Unanimity is required on all decisions taken on taxation issues at EU level. We are happy to discuss how to deal with taxation issues on that basis and we have done so. Enhanced co-operation may only be engaged in as "a last resort" but we are a long way from such a position as a proposal must first come forward from the Commission. The timeframe it is talking about extends to 2008, which in our view is unrealistic, notwithstanding our strong opposition to the project — we feel the Commission may be down-playing the level of opposition among some member states.
Does the Minister accept there is cross-party consensus in opposition to corporation tax harmonisation across the European Union? What is his opinion on the agreements that exist in other areas of taxation? There is already agreement on low level energy tax and there have been proposals by President Chirac for an aviation tax for developing a fund for a common EU approach to foreign aid. Has the Government articulated its position on those and other common tax issues in the EU?
It has. We have decided to fund our foreign aid through direct grant-in-aid, rather than via an aviation tax, because it is far more transparent. There is an issue with certain nations' dependence on aviation and the effect on our costs, which would be different from that of others. It has been decided that countries can deal with the issue on a voluntary, optional basis themselves. I respect those member states who see it as a feasible means of providing support for the Third World but we do so through direct grant-in-aid and the relevant subhead has received among the largest increases in recent years.
9 Mr. M. Higgins asked the Minister for Finance the additional measures he intends to take to deal with the problem of money laundering in view of the concerns expressed regarding the adequacy of existing safeguards expressed in the third mutual evaluation report on Ireland produced by the financial action task force; and if he will make a statement on the matter. [12376/06]
The financial action task force, FATF, recently published the report of its evaluation of Ireland's measures to combat money laundering and financing of terrorism. Ireland is one of seven countries evaluated to date in the FATF third round of mutual evaluations. Its overall ratings are comparable to those obtained by the other countries evaluated. The revised FATF money laundering recommendations of 2003, which are the standard against which Ireland's compliance was assessed, have been embodied in the third EU money laundering directive, which came into force in December 2005 with a transposition deadline of December 2007.
Many of the FATF recommendations on which Ireland was assessed as either partially compliant or non-compliant will be addressed in the transposition into Irish law of the third EU money laundering directive. These include additional measures on customer due diligence, measures relating to the identification of foreign politically exposed persons, the strengthening of the sanctions for breaches of money laundering rules and the regulation of non-financial entities.
On publication of the FATF report, my colleague, the Minister for Justice, Equality and Law Reform and I jointly undertook to examine its recommendations thoroughly and gave a commitment to further strengthen Ireland's anti-money laundering mechanisms. The process of reviewing and updating the Irish legal framework to meet both our domestic needs and international obligations is already under way. Ireland opted to be evaluated early in the third round of mutual evaluations because this would be of considerable assistance in planning the transposition of the third EU money laundering directive into Irish law.
Written Answers follow Adjournment Debate.
