I welcome the opportunity to speak on the Fiscal Responsibility Bill 2012. I will briefly address the fiscal rules which the Bill introduces, bearing in mind the extent to which these matters have already been debated in the Dáil, on television programmes and, most importantly, the doorsteps. Ireland’s debt-to-GDP ratio was 108.5% in our first quarter and continues to rise.
Legislating for fiscal responsibility and debt management will be key to a successful return to the financial markets and thus regaining our economic sovereignty next year. While our international financial reputation is on the mend, we still have one of the highest debt ratios in the EU. It is imperative that we regain our financial footing if we are to survive as a self-sufficient state, and one that is so inextricably linked with our EU partners and the world market, in order to ensure job creation and economic growth in the future.
Part of this Bill will establish on a statutory footing the independent Irish Fiscal Advisory Council, which has been working over the past year and which will reform our fiscal and budgetary process. This is a measure that has been adopted by governments worldwide following the financial crash in 2007. A vital role of the independent fiscal advisory council is to improve and reform the transparency of the budgetary process. Any reports or recommendations will be issued to the Minister ten days prior to their release into the public domain for dissection by external financial experts and economists. This is a welcome step in the context of allowing the general public assess and assimilate information.
In 2011, an independent report stated that warnings on the outcome of Government economic policy were provided to Cabinet from internal sources. Therefore, it appears that someone did shout “Stop”, but nobody was listening. Would things have been different if it was known that the contents would be released to the national media? They probably would. Governments make decisions based on the best information that is available to them. The reports of the fiscal advisory council will form part of the jigsaw when it comes to fiscal policy making at Government level that will affect the future of all of us.
It should be noted that the fiscal advisory council will be independent of Government and therefore the opinions it will put forward will not always be in line with Government policy. This is a good thing as it is always good to have more than one opinion on issues. Finally, I am encouraged by the fact that the fiscal advisory council will make itself available to Oireachtas committees and will, therefore, be answerable to us, the public representatives elected to preside over such matters. This offers a particular opportunity to the finance and other committees to go through the suggestions and reports line by line, which would be a positive move.