Following the agreement of the Government in June, the Minister for Finance, Michael Noonan T.D., announced today the establishment of the Irish Fiscal Advisory Council. The Council is being put in place as part of a wider agenda of reform of Ireland’s budgetary architecture which is envisaged in the Programme for Government.
The Council will be an independent body and its existence and independence will be underpinned by legislation to be brought forward by Government later in the year in the proposed Fiscal Responsibility Bill. Its role will be to provide an assessment of, and comment publicly on, whether the Government is meeting its own stated budgetary targets and objectives. It will also be charged with assessing the appropriateness and soundness of the Government’s fiscal stance and macroeconomic projections as well as an assessment of the extent of compliance with the Government’s fiscal rules. The latter are also to be brought forward in the proposed Fiscal Responsibility Bill.
The members of the five-person Council are:
Mr. Sebastian Barnes, OECD,
Professor Alan Barrett, TCD (on secondment from the ESRI),
Dr. Donal Donovan, University of Limerick (formerly IMF staff),
Professor John McHale, Head of Economics, NUI Galway and Chair of the Council, and
Dr. Róisín O’Sullivan, Associate Professor, Smith College, Massachusetts.
Commenting on the establishment of the Council, the Minister said:
“The establishment of the Irish Fiscal Advisory Council is another important step in the process of reforming Ireland’s budgetary framework. The Council will provide an independent assessment of the Government’s budgetary plans and projections and, in doing so, will help to inform the public discussion surrounding economic and fiscal matters.
A number of other countries have taken the step of establishing such a council and have found it to be beneficial not only in helping to ensure that an appropriate budgetary policy is pursued, but also in sending a positive signal to markets regarding the conduct of future fiscal discipline.”
The Minister wished the members well in their work and expressed the view that the Council will make a significant contribution to the task of ensuring that Ireland avoids the type of imbalances in the public finances that have been a feature in recent years. The Minister said that he was confident that the move would be viewed positively by the markets as further clear evidence that Ireland remained on track in meeting its obligations under the EU/IMF Programme and that it was committed to overcoming its financial difficulties.
The Minister thanked the new members of the Council for lending their time and expertise to help establish this important addition to Ireland’s budgetary framework.
“I am delighted that we have been able to assemble such a high-quality team to form Ireland’s first Fiscal Advisory Council. I have no doubt that, over the coming period, the Council’s standing will only increase through its work. I am particularly pleased that Professor John McHale has agreed to act as Chair. He will have a key role in setting up the Council and in helping to define its remit and its independent character. I would like to thank all of the members for making available their time and expertise to help reform our budgetary architecture.”