Watchdog could review opposition’s budget plans

The head of budget watchdog the Irish Fiscal Advisory Council said a body such as IFAC could scrutinise budget plans of opposition parties to probe whether their budget sums were credible.

IFAC chair John McHale said that, if properly resourced, IFAC could usefully scrutinise the budget sums of political parties.

IFAC was set up during the economic crisis to help prevent a return to disastrous boom-bust economics.

Prof McHale told Sinn Féin’s Peadar Tóibín of the Oireachtas Finance Committee that a new Oireachtas Budget Office could be set up to review parties’ budget plans.

He was appearing before the committee following the IFAC report published last week that criticised Coalition budget plans announced in April.

Prof McHale told the committee that the plans were at risk of breaking strict EU rules that are designed to prevent national governments emerging from excessive budget deficits from repeating the same mistakes of the past.

He said that although the economy was performing well, there was an element of “catch-up” in the current large growth numbers.

The IFAC report was critical of Government plans for a giveaway budget in October of between €1.2bn and €1.5bn because, it says, that will put Ireland on a collision course with the EU budget oversight rules.

IFAC believes an expansionary budget of half what the Government has indicated — around €700m —would probably be enough to comply with the rules. It also warned about demographic and other pressures that are building on spending in future years.

Prof McHale also said there was “no urgent priority” for the Government to sell its stakes in the banks.