Oireachtas committee calls for better Budget forecasting 'to break pattern of overruns'

Oireachtas committee calls for better Budget forecasting 'to break pattern of overruns'
Colm Brophy.

A Government Budgetary Oversight Committee has called for better models for forecasting corporation tax receipts and Ireland's economic exposure to Brexit.

It comes as the Oireachtas releases its Post-Budget 2019 report today.

Committee Chairman, Colm Brophy TD, said: “The Committee seeks to make Ireland’s budget-making process more transparent, inclusive and subject to greater parliamentary scrutiny.

“We hope that all of our recommendations published today are received positively by the relevant departments and agencies.”

    Key recommendations:

  • A second independent review of the sustainability of corporation tax receipts post-2020, given the evidence of Ireland’s current over-reliance on this source of revenue.
  • More sophisticated forecasting of the potential 2019-2020 impact of Brexit on tax receipts, employment, spending and growth.
  • A Department of Public Expenditure and Reform (DPER) review of its current use of three-year expenditure ceilings, with a focus on making medium-term forecasting more credible.
  • Closer DPER, Health Department and HSE scrutiny in 2019 of expenditure on health services to break the pattern of budget overruns and mid-year increases.
  • A DPER analysis of the budgetary impact on other capital projects caused by additional costs arising from the National Children’s Hospital project.

Deputy Brophy said: “We hope these recommendations can be examined and implemented alongside early and detailed engagement with the Committee as 2019 progresses.

“Ireland must do all it can to make its medium-term forecasting more accurate, detailed and insightful, particularly in relation to corporation tax receipts and health spending overruns.

"As a nation, we must keep an especially close watch on mid-year spending adjustments given the possibility that Brexit, with all its uncertainties, could be reality by then.”

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