Department of Finance accused of  'undermining the parliamentary process'

One of the measures the PBO takes aim at is the extension of the Help to Buy scheme through to the end of 2024. Picture: iStock

The Department of Finance has been accused of “undermining the parliamentary process” and leaving TDs without “clear information on the consequences of their decisions during the tax policy process” by an independent Oireachtas body.

The Parliamentary Budget Office (PBO) raised the issue in its most recent publication on the Budgetary Issues in the Finance Bill 2022, and said that the Department of Finance had only provided costings of some, not all, measures.

The Finance Bill 2022 is the piece of legislation from Government which transposes into law many of the tax provisions included in September’s budget announcement.

One of the measures the PBO takes aim at is the extension of the Help to Buy scheme through to the end of 2024, at an estimated cost of €175m. The PBO had previously estimated one-third of recipients on the scheme already had the deposit needed for a home, and wouldn’t have needed to avail of the scheme.

“The Department of Finance has not provided clear estimates of the cost of this measure,” it said. It noted an independent review of the  Help to Buy conducted by Mazars on behalf of the department.

“This review concludes that the scheme has weaknesses, is not sufficiently efficient to represent good value for money, and should be withdrawn, but not immediately,” the PBO said. 

“The Department of Finance did not make the changes recommended by Mazars arising from the review.” 

On the subject of the controversial concrete blocks levy, the PBO noted that while it may raise “a limited amount of additional revenue” for the Exchequer, it could have negative consequences too.

“It may also increase the cost of construction at a time when the Irish State is experiencing acute pressures in the housing and rental market,” it said.

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And, on the subject of the measures to support businesses to pay energy bills, it also noted potential negative aspects alongside its aim of increasing the chance companies can survive during “the first winter of this energy crisis”.

It said: “There is a potential the measure could increase energy consumption, rather than reduce energy demand or encourage using more renewable energy.” 

The PBO said that providing accurate and detailed policy costings are fundamental for TDs and senators to be able to scruitinise any budget measures.

It said that after asking the Department of Finance why certain tax measures do not have cost when they are extended while others do, it was the case that that the department “has chosen not to show the costs of all extensions and changes, but instead only some measures”.

“It further suggests that the department is unlikely to be adequately reviewing and considering these measures when they are being extended, as the department has already assumed the results of the decision-making process,” it said.

“This undermines proper scrutiny from the department, and also undermines the parliamentary process.”

In a statement, the Department of Finance said it notes the views outlined by the PBO and that improving transparency and clarity in the material it provides is something it “endeavours to improve upon every year”.

“In this respect, the department will examine how it can improve its approach in this area based on the PBO’s input,” a spokesperson said.