Fiscal Council report highlights serious questions over government projections – Fleming
Published on: 26 November 2015
Fianna Fáil Finance Public Expenditure and Reform spokesperson Sean Fleming has welcomed the publication of the Fiscal Council report today on the public finances saying that it will make sobering reading for the government.
There is a blunt warning in the report that the adoption of €1.5 billion in supplementary spending for 2015 marked a “deviation from prudent policy” which should not be repeated.
Deputy Fleming commented: “The Fiscal Council makes a number of very important points including that forecasts for government spending do not fully take account of the likely costs of demographics as well as questions over tax revenue forecasts.
“It is clear that at the end of 2014 the government took a conscious decision to engage in a pre-election splurge. The total of these measures amounts to a staggering €7.1bn.
“However, much tighter rules will be in place next year and as it stands it will not be possible for organisations such as the HSE to incur massive additional expenditure without raising charges or compensating cuts being imposed elsewhere. The Minister for Public Expenditure and Reform has completely failed to address this very serious issue.
“A considerable proportion of the additional expenditure is being funded by corporation tax receipts and profits from the Central Bank. Both of these windfalls may not be repeated in future years. Should international trading conditions deteriorate we could see these revenues evaporate.
“The Fiscal Council provides very valuable commentary and advice on the public finances and the appropriateness of fiscal policy. It was set up so that mistakes of the past could not be repeated.
“The members of the Council, bring a wealth of experience to their role and should not be ignored by the government. It must explain why it has done so particularly in relation to the supplementary estimates. Ministers must acknowledge the importance of the Fiscal Council and support it in its works. It deserves more respect and should not be treated as a nuisance.
“The government must take a more constructive approach to the work of the Fiscal Council that they have in the past. Last year the
“The Taoiseach stated that the “advice of IFAC was something for future governments to follow” implying that they were disregarding it. The government are required to set out a formal response to IFAC’s report. It is within its rights to disagree with advice given but it should be required to issue a detailed response setting out why it is taken a different course of action,” concluded Deputy Fleming.