OECD: New rules on open budget discussions could have prevented crash

New rules to provide more openness about the real state of the economy before the annual budget is announced could have prevented the crash if they were in place a decade ago.
OECD: New rules on open budget discussions could have prevented crash

An OECD official made the claim yesterday at the launch of the ‘Review of Budget Oversight’ document, which is seeking a series of major Dáil reforms of the budget process.

Under the plans, which have been backed by all parties, any future government will be asked to hold fiscal planning hearings every February, followed by pre-budget parliamentary hearings each July on more specific budget priorities to allow for improved scrutiny.

The future government will be asked to:

  • Provide full details of financial estimates to the Oireachtas for analysis each September instead of after the budget;
  • Free up committee space for regular “performance hearings” with department heads;
  • Consider setting up an estimates committee to closely examine the matters.

It is also intended to establish a parliamentary budget office to a check whether financial plans are based on fact or fiction — before they are announced.

The moves are similar to the way governments and opposition parties operate in the likes of Austria, Germany, and New Zealand.

Sean Barrett
Sean Barrett

Fine Gael TD and ceann comhairle Sean Barrett said they will help reduce any risk of policies simply being “nodded” through without serious discussion.

Ronnie Downes, a former Department of Public Expenditure and Reform official who is now deputy head of budgeting at the OECD, said the plans are about ensuring improved transparency in the Irish system — which is ranked as one of the worst in Europe for its budgetary process openness.

“If you had this type of responsible engagement, you would have a completely different budgetary environment than was the case 10 or 12 years ago,” he said at the launch yesterday.

“It would be completely different in the sense it would allow more open and objective information to be available for public discourse.”

Mr Downes added that “some of the dangers and risks indicative” of the boom era would have been lessened if the new rules had been in place.

Fianna Fáil TD and Public Accounts Committee chair John McGuinness said there is a vital need

for increased scrutiny on budgets, but questioned whether the civil service and politicians are “up for that challenge”.

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