Department budgets face quarterly examination

A political move is under way to have departmental budgets scrutinised every three months.

The Oireachtas finance committee is writing to Public Expenditure Minister Brendan Howlin proposing that budget targets be examined every quarter.

The committee chairman, Labour TD Ciaran Lynch, said the current system is inadequate as it only allows for detailed budget scrutiny at year-end.

“The problem with the current system is that cost overruns or failures to make savings often only become apparent in the final quarter, leading to some departments seeking extra financing or having to make larger savings or a ‘balloon’ saving in the final months or weeks of the year to meet targets,” Mr Lynch said.

“In areas where there is control over expenditure and specific targets are set, rather than estimates being examined at year-end, these instead should be considered on a quarterly basis.”

Mr Lynch said such a change would ensure budget problems in departments were tackled sooner. “In some cases, the saving that is being envisaged may not be realisable and it is better to know this in the first or second quarter, so that a different approach may be considered. In other situations, the adjustment in the estimates is not being achieved because it is not being managed properly. Again, if this is the case, it is better to establish this after the first or second quarter and the committee could bring in the relevant managers to explain why this has been allowed to happen.”

Meanwhile, Sinn Féin has reiterated its call for a wealth tax. Finance spokesman Pearse Doherty published a bill yesterday outlining how the tax would work. “We believe that a 1% tax on net assets in excess of €1m has the potential to yield up to €800m,” he said. “All debts such as mortgages would be factored into the calculation. A range of exemptions are also in place including 20% of the family home and pension funds. Across Europe, countries struggling to reduce deficits and raise revenue for investment in public services and job creation are turning to wealth taxes.”

Separately, the United Left Alliance launched its pre-budget statement and also called for a wealth tax. The alliance — Richard Boyd Barrett, Joe Higgins, Joan Collins, and Clare Daly — called on the Government to “repudiate all debt deriving from the financial crash” and to raise additional revenue by introducing the wealth tax.