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JOINT COMMITTEE ON FINANCE AND THE PUBLIC SERVICE díospóireacht -
Thursday, 30 Oct 2003

Vol. 1 No. 18

Business of Joint Committee.

We had to change the date of this meeting, as we intend to deal with freedom of information legislation and the Minister was not available yesterday. I hope it has not discommoded the people we intended to meet yesterday. It is more beneficial to have the relevant Minister attending the committee to discuss this topic. As chairman of the committee, I therefore agreed to this change of date last week. I am pleased that a number of members are able to attend today.

The first item on the agenda is the minutes of the meeting of 15 October 2003. The minutes have been circulated and I propose that they be agreed with the following amendments. I wish to record apologies from Senator White for not attending the last meeting. Twice in the draft minutes, we refer to notification that it is proposed to proscribe additional bodies included in the schedule of the Freedom of Information Act. The term "proscribe" should actually read "prescribe". This is important in case some people believe we were attempting to outlaw freedom of information. That was not the intention.

Correspondence on EU scrutiny has been circulated to members of the committee. The EU scrutiny sub-committee has sent a list of decisions that were taken at its meeting of 2 October 2003. The sub-committee has referred two proposals to this committee for further scrutiny. They are COM 2003/446, regarding mutual assistance in the field of direct and indirect taxation, and COM 2003/397 on rates of VAT. Is it agreed that the committee will scrutinise these proposals in the usual manner? Agreed. Does the committee agree to note the remaining proposals considered by the EU scrutiny sub-committee on 2 October 2003? We will note that it has considered the matter.

The EU scrutiny sub-committee has sent a list of decisions taken at its meeting of 16 October 2003. None of these proposals has been referred to this committee for further scrutiny. Does the committee agree to note the proposals noted by the sub-committee on 16 October 2003? Agreed.

Item No. 4 concerns the consideration of the proposed structure to the report on the commercial banking sector. At the last meeting, we discussed this and circulated a draft outline reflecting the way in which committee reports are usually structured. I suggest that this will form the basis of the structure of our report. We have not commenced the drafting of it yet, as we wanted to agree to the structure first. It is in the same format as the report we produced from the freedom of information hearings earlier in the year. Are we agreed to follow the same structure in this report? Agreed.

The next item on the agenda is the report of the delegation to a meeting in the European Parliament Budget Committee in Brussels on 7 October 2003. That was attended by myself and the Clerk of the House and the report has been sent out to committee members with the documentation. It is a brief report to be laid before the House as a result of my presentation at the meeting in Brussels on behalf of this committee. I am sorry - I am informed that it does not have to be laid before the House, but that the committee should note the report. Is that agreed? Agreed.

I want to see if there is any other business to clear, after which we will go back to freedom of information as the final remaining item.

Was the sub-committee set up?

No. We spoke about a sub-committee on the strategic management initiative and we have not progressed from there since our earlier discussion.

What is the cause of the delay?

We discussed the issue a few times and did not agree on the exact format. We had other items on the agenda of the last two meetings and we simply did not consider that item. We made no formal decision. One of the proposals was that we would set aside a couple of sessions - specifically, one special meeting on SMI every two months, as opposed to setting up a sub-committee. Some members were not keen. They felt they were already involved in a sufficient number of committees in the House.

Would a sub-committee not take a lot of the peripheral work from this committee and allow us more time? We work only one day a week and we clash with Dáil sittings. That is not satisfactory.

I am happy with whatever the committee decides. Some members, more so those of the Opposition, indicated that they could not give a commitment to attending the committee and a separate sub-committee on the issue due to the pressure of time. The suggestion was made that the main committee might have a special meeting every two months to deal with the issue in full session. That is where we have left the matter. We have not finally signed off on it yet.

We should get on with that issue.

If the Opposition agrees to that, I have no problem.

Can we agree that the strategic management initiative, the specific issue recommended to us to be dealt with under our terms of reference, be the subject of a meeting every two months, as was suggested? I would not like the year to go by without our having looked at the issue. We can pick particular Departments and obviously we will start with the Department of Finance. Our remit extends right across the public service and is not confined to the Department of Finance.

Committee members expressed different views on this matter. I continued to highlight it on the basis that we had not been dealing with it as part of our agenda in more than a year or perhaps 15 months. It is important that we deal with it, whether by means of a sub-committee or a special meeting every two months. It is probably more practical to take it as an item on the main committee's agenda, but a specific rota would be needed for it. If that were agreeable to the committee I would formally propose it.

Can we take it the committee is in general agreement to proceed in this manner, draw up a list of Departments over the period of 12 months and hold a special meeting every two months on that specific topic, strategic management initiative in the public sector, to be dealt with Department by Department?

I am sure this has been discussed before, but are we simply to keep a watching brief on the developments under SMI, or are we to initiate something?

In the last Dáil there was a specific committee dealing with the topic. That committee was not reappointed in the current Dáil, and its work has been transferred to us to be dealt with in the manner we deem appropriate, whether by means of committee or sub-committee.

Is there a work programme?

No. In the last Dáil there was. The item is on our agenda and we have not yet dealt with it this year.

We are not confined to merely keeping a watching brief. My understanding is that under the rules of the former committee we have the authority to request people to attend. There is an opportunity to investigate.

In that case I would go along with the idea that we should at least begin in full committee until we decide what we are doing——

Then we can take it from there.

We should set a date.

My point was that if we were to have a full committee someone should take note of what would actually happen, and we would then decide whether a full committee or a sub-committee was appropriate. That was the view I put forward. Maybe we should do as Senator O'Toole suggests and try to focus on something and decide how we handle it from there.

For the next full meeting we will have a draft schedule of proposed Departments and proposed dates for special meetings on the topics.

As a member of this committee I was contacted yesterday by a representative of the film industry. What is the situation there?

Section 481 of the Finance Act offers tax relief for the film industry, for the production of films in Ireland. We have called a special one-day meeting for Wednesday next, 5 November, commencing at 9.30 a.m. to deal solely with that issue. As Chairman I am suggesting that in the course of the morning we invite representatives of the film industry, Screen Producers Ireland, Ardmore Studios and ICTU, together with representatives from the Department of Finance - who will probably be supported by the Revenue Commissioners - and officials from the Department of Arts, Sport and Tourism. I would expect that in the morning session we would deal with the industry. Having heard what they have to say, I would hope that in the afternoon session we can move on to the Government Departments. At this stage that is just a suggestion, which I see as the most practical way to proceed. Tomorrow we can see about drafting a timetable, structuring it for the meeting and circulating it to members.

Is it proposed that the Minister for Finance or one of his deputies be invited to attend?

No. I specifically understood that we were to meet officials from the Department of Finance and the other relevant Government Departments. As Chairman I was asked if we wished the Minister to attend, and my view was that the Minister's policy is clear-cut. As stated in last year's budget he has arrangements in place, and as a committee we want to look at the pros and cons, after which we will submit a report to the Government and the Dáil as quickly as is practicable after our day of public hearings next Wednesday.

I am not sure that is effective, though I can see the reasons why the Chairman would suggest that. As the Chairman said, we know what the Minister indicated last year. We also know the issues brought forward by the film industry workers. They claim that there is a gain factor of between two and five, in terms of up to five times the granted tax relief being returned to the economy. I would like to understand the Government policy. There might be very good reasons for having this kind of tax break - I do not know. The way it currently looks, it seems we are losing money by getting rid of the tax relief. The only person who can tell us if this is so is the Minister. We know what he has said he will do, but not why he intends to do it. I do not understand the reason, though I have studied the issue thoroughly.

I am not getting into a debate on this today because we have a full-day hearing next week. I felt that the purpose of our committee having all-day hearings was to put forward the committee views. We are going to hear from the industry and from the Department of Finance, along with the Revenue Commissioners, and the Department of Arts, Sport and Tourism. As an all-party committee we will present the Government and the Dáil with our opinion, well in advance of the budget. We wanted to be pro-active and put our case.

To follow up on Senator O'Toole's remark, I understand that a number of studies have been carried out for the Department of Finance and the Department of Arts, Sport and Tourism, among others. Is it possible for the committee members to get copies of those studies or, in the case of the Indecon study on section 481, to have one of the people from Indecon make a presentation? My understanding is that the Indecon study for the Department of Finance, I think, seeks to set out the cost advantages and disadvantages of section 481. We need to have that kind of information if the committee is to do its work properly. I was told about those two studies more recently. We have already heard reference in the Dáil and here to the PricewaterhouseCoopers report on the arts. However, the Indecon study has apparently been conducted for the Department of Finance on numerous occasions. As far as I know, neither of those studies has been published. To return to Senator O'Toole's comment, ultimately we are trying to reach an informed view of the policy adopted by the Government, and to do that we need better information.

Before we go into today's long session with various people who are more informed on this matter than we, we should at least have the benefit of those reports, even in synoptic form. If they exist and are being referred to, as is the case in correspondence between the Departments, I would like to know what they contain.

On that issue, I specifically asked officials at the Department of Finance to make those reports available to us, since I was aware of the PWC report. They did not give me a commitment to release them, since they were still being considered. I made it clear to the officials in the Department that we have a job to do as an Oireachtas committee. If they decide not to make their best case before the joint committee, having information that they decide not to present to us, that is their prerogative. However, I said that we would still produce a report based on our full day's hearing. If people have information that they choose not to give us, we will have to report accordingly as we see fit. I have asked for those reports to be brought to us, but I have not got a commitment on that yet.

Those two groups have already made a presentation to the Joint Committee on Arts, Sport, Tourism, Community, Rural and Gaeltacht Affairs, where there was a full debate on the issues that Deputy McGuinness has just raised. It would be helpful for members of the committee to have that, since it would at least allow them to see the figures being argued over. We are talking about big bucks here, and I certainly agree that it would be very helpful if committee members at least knew the issues.

We can request the Department to ensure that we have that information before the meeting so that we have time to study it. I cannot speak for the Department except to say that we will do our job as a committee.

I support the proposal to have a meeting on the film industry and the tax regime that would apply to it. That is an important and welcome development. Perhaps consideration might be given to the rural renewal tax designation scheme in place and the impact of its being withdrawn by December 2004. It fell from the capital allowances for the hotel industry in the BMW region, and particularly in the west. There are vast regions there so undeveloped that in large sections of some counties there is no hotel with more than 50 bedrooms, and in some cases only 20 or 30. There is still a declining population there. If we are to give effect to the BMW decision, the continuation of the rural renewal scheme and the capital allowance should at least be debated. I have - like many others, I am sure - had many representations from county managers in particular who are fearful of the slowdown that will take place in four or five counties if those tax breaks are withdrawn.

We discussed the issue of the various tax reliefs and incentives. There may be 80 of them. We specifically decided that we would have one day's public hearings on this matter alone. Our general view was that we would not take pre-budget submissions, since most people are making submissions direct to the Department. Owing to lack of time, we picked the film industry as the sole topic of next week's meeting. We are free to discuss the matter again, but not next week. Generally people know where we stand regarding next week's meeting. We will prepare a timetable for the meeting, which will be circulated in advance. We can agree at the commencement of the meeting on the same type of format as previously, whereby people make a presentation and we rotate the questioners between the political groups and independents in a fair manner to use our time effectively. We will try to stick to the timetable, since it could be a busy day.

Will the Chairman suspend for the Order of Business?

No. We are starting at 9.30 a.m., and we will suspend only if a vote is called. Since it is the joint committee, we will suspend if there is a vote in either House, but not for their general Order of Business.

We have now decided where we are going in that regard, and we will finalise the detailed timetable at the commencement of next week's meeting. We have mentioned the groups that we are inviting. Before we move on to the third matter on the agenda, we will suspend for a moment while the Minister and his officials take their seats.

Sitting suspended at 3.36 p.m. and resumed at 3.38 p.m.
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