Belfast Telegraph

Fiscal referees will set the financial rules

By Brendan Keenan

Wanted: clever, well-qualified folk to tell the government what to put in the Budget and rebuke them if they don't do it. Ex-politicians may be considered.

Sounds like a fun job and it is coming up soon. Under the bailout agreement, the government is supposed to appoint a Fiscal Advisory Council by the end of this month, although it does not actually go to work until next year at the earliest.

They are awfully popular, these outside fiscal referees. This body is unusual in that it is also does the official economic forecasts for the government. Ireland does not really do reform; it is certainly not part of the reputation of the Department of Finance.

Reforms are always under way - strategic management initiatives, multi-annual envelopes, accruals accounting - but the end result always seems to the same as the beginning.

It has always been "in house" as well. So it was something of a new departure when the finance department organised a seminar on the new proposals, which was attended by economists, market participants, outside experts, even commentators.

Since the council is going to be made up of outsiders, it would hardly make sense to plan it all from the inside.

What is envisaged here is a set of rules which governments must follow. The council's job will be to tell them - and us - if they have done so. Ireland has had budgetary rules ever since the 1980s crisis. Garret FitzGerald concentrated on the deficit in day-to-day spending. Then came the euro and the elaborate rules of the Stability and Growth Pact. And here we are, with the worst budgetary crisis since the 1980s and the cost of the bank rescue on top. You may wonder if there is any point to all these rules. Not least because a purely fiscal council would have had little or nothing to do with the banking collapse. What must be done is so obvious that there would not seem to be much need for a fiscal council. But an effective one might be the only chance of keeping politicians and public at this grisly task for the long years it is going to take.

We are promised - again - that things are going to be done differently. Once a council is up and running, ministers should have no hand in the appointment of its members.

Former civil servants should not be eligible. Its budget would be guaranteed on a rolling five-year basis.

Something along those lines and then we could begin to believe that things really were going to change.

Once a council is up and running ministers should have no hand in the appointment of its members

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