State to appoint independent fiscal advisory council this week

 

THE GOVERNMENT will establish an independent fiscal advisory council and appoint its five members later this week, Department of Finance sources have confirmed.

The council will independently assess the fiscal and budgetary policies of the Government.

It was included as a commitment in both the programme for government and also in the revised memorandum of understanding with the European Union and International Monetary Fund in April.

The Government gave an undertaking that this would be done by the end of June.

Minister for Finance Michael Noonan will disclose the membership of the council this week and also specify the role the council will play.

The council will have a remit to assess the Government’s budgetary plans and forecasts, as well as assessing compliance with fiscal rules.

It will make its assessments available to the public.

However, the council will not be in a position to commence its work without statutory backing.

It is expected to begin meeting on an informal basis until a fiscal responsibility law is passed later this year.

The prospective membership of the council has remained a closely guarded secret.

However, it is expected to comprise economists with an international reputation, from varying backgrounds in academic institutions and business.

At a seminar last month, the Department of Finance outlined the thinking behind the need for a council.

A presentation by finance official Joe Cullen asserted that independent fiscal institutions can help governments adhere to medium-term targets and obey fiscal rules.

He pointed out that in 2008, 17 of the 27 EU states had such independent institutions.

According to Mr Cullen’s presentation: “The advantages cited for such bodies include greater transparency of the budgetary process through public commentary on fiscal policy assumptions and decisions of government, and stronger critique of official forecasts and proposed fiscal policy objectives.”