Reforming Ireland’s Budgetary Framework – Discussion Paper Post author By Philip Lane Post date April 1, 2011 The Department of Finance has released this paper. Categories In Fiscal Policy Tags Irish budgetary framework 8 Comments on Reforming Ireland’s Budgetary Framework – Discussion Paper ← Anti-gloom on the stress tests → S&P Rating Downgrade 8 replies on “Reforming Ireland’s Budgetary Framework – Discussion Paper” “The Council would be independent in nature, comprised of persons with relevant expertise and experience, of national and international standing. It need not be a large body. Appointments to the Council would be made by the Minister for Finance after consultation with the Oireachtas and the relevant Committee. In order to be effective, the membership of the proposed Council should be no more than five respected individuals with a strong track record in economic and financial matters and, to ensure added-value to the overall process, the body should ideally include international expertise.Appointments should be for a fixed period and it is envisaged that theywould be made after consultation with the relevant Oireachtas Committee. It is proposed that legislative arrangements relating to the terms of office of members and to the creation and operation of the Council will be generally consistent with recent practice in the establishment of a body with an independent character. A small secretariat of appropriately qualified staff, drawn from the existing civil or public service, would provide research and administrative support to the Council. In overall terms, the experience in countries such as Sweden is that the establishment of a Council could add value and should not have to have substantial additional expenditure associated with it.” To what extent will the committee’s, or could the committee” role be undermined or appear to be undermined both in terms of reality and in terms of perception by the public by the fact that the committee is in effect appointed by the government every five years? I think membership should be for seven years – longer than the life of a government – and replacements should be made on a phased basis – like they do with the fed – there should never be an opportunity for a one term government to replace the entirety of the committee or threaten to replace it (save by amending legislation). Phrases like ‘lock on stable door’ and ‘horse has bolted’ spring to mind. This looks like a fleshed out version of the relevant section in FG’s policy paper – with appropriate nods in the direction of the Oireachtas Cttee and Prof. Lane. I like the “Decisions on each of these matters will, naturally, be a matter for Government”. The DoF is easing itself back into the saddle while expressing deference in the manner that only arrogance can. I realise that it isn’t part of its remit, but this presents nothing that would allow the Dail or its Cttees to subject budgetary and fiscal prosposals to the kind of independent, expert and detailed scrutiny they require. In addition to my suggestion that the top two or three levels of all government departments, agencies and public bodies should be required to re-apply for their jobs within the next six months, I believe the policy formulation function in all departments should be split with part being transferred to the relevant Oireachtas Cttees. If this Cttee resource were supplemented by external, independent expert advice and analysis we might get a bit of effective scrutiny of the bullshit that frequently masquerades as policy. But I expect such a move would be a bridge too far for a government with an overwhelming Dail majority and which is keen to exercise the executive dominance from which it has long been excluded. The entire senior level in the Department of FInance (A.Sec up) are severely compromised (whitewash reports don’t wash). I hope the new brooms do a bit of sweeping!! I was considering reading this paper until I saw the last chapter (5) :”An independent Budget Advisory Council”. It is nice to see that DoF officials and other public service finance experts are planning how to fill their early retirement years after receiving a nice voluntary redundancy package. I am sure members of the council will contribute vigorously to the proposed reduction in the number of Quangos,among other things, and be well equipped after 30 years of public service to “discuss” and advise on “reforms”. I would suggest that the new government start by repealing the Public Service Management Act 1997 which is the source of much of our difficulties. It is a pernicious piece of legislation as it assumes, wrongly, that the civil/public service is a homogeneous structure to which the same set of management principles, “strategy statements”, for example, can be applied. Indeed, it must be the only piece of legislation in the world devoted in its entirety to a management theory based on “inputs” and “outputs” for widely disparate organisations some of which are supplying the “outputs” of others or, alternatively, the “inputs”. There needs to a root and branch examination of the entire public service starting with the question: does the State have to do this? If the answer is yes, the next step is to define the nature of the department or organisation in question and to apply the appropriate management methods. Central to the approach should be the abolition of the idea of permanent, pensionable employment simply related to becoming a civil/public servant. This is what other successful reformed economies have done. Such an approach must, of course, be surrounded by appropriate safeguards. And standard pension arrangements should apply across the national workforce with a minimum safety net national pension for all. It is ideas like these that need to be considered. Reforming the budgetary framework is of little use if the money raised in taxation is not being spent wisely or in an economically distorting manner which is undoubtedly the case at present. @If I remember correctly Holland moved to this kind of appproach to public service employment in the early 1990ś. To such an extent that even military personnel had to re-apply for a job every 3 years. Today Holland enjoys 3% unemployment as opposed to 14 % in Ireland and I am not aware that there are any destitute or disgruntled public servants or huge variations in public service and private sector salaries. The “gilded cage” syndrome of public service (servitude?) is also probably not the kind of life sentence it is in Ireland. Standard pension arrangement would be less socially divisive and allow more freedom to individuals in the public service to consider opportunities in the private sector if they feel unfulfilled in their current job. Pensions could have 3 pillars : normal old age pension , employee contribution and employer contribution with addidtional superannuation lump sum payments for professions (eg military , Gardai etc) which are difficult to work in beyond 60 years of age. Estonia has a similar system in place (which includes a very efficient and cost effective health insurance and child care system) for many years which was developed by Christian Democrat and Social Democrat governments and accepted by all other parties including Liberals of the Neo and Centrist variety. Personally I feel Ireland would be better off if every one spent 8-10 years as a public servant at various stages (and grades) in their career which would be affordable if pensions were standardised and public salaries reflected private sector salaries. Indeed I would venture to guess that in such circumstances many people would spend various parts of their careers moving between the private and public sector while attainment of a university degree would become a normal aspiration at some stage during a working life. The Irish government have an opportunity to implement this when the Croke Park agreement ends, and supplementary pension contributions become compulsary for everyone, in 2014. The current government idea to start introducing internships could also contribute towards this transition. My last post was @DOCM Is there any chance of a clearout of the top madarins at the DoF ? They could be sacked on the same week that the senior boxwallahs at AIB, ILPM and BoI get their marching orders. It would be a breath of fresh air to see some accountability. And would do the average RTE viewer no end of good. Comments are closed.