{"id":28093,"date":"2023-10-07T21:38:11","date_gmt":"2023-10-07T21:38:11","guid":{"rendered":"https:\/\/legalblog.ie\/?p=28093"},"modified":"2023-12-14T22:04:58","modified_gmt":"2023-12-14T22:04:58","slug":"fiscal-responsibility","status":"publish","type":"post","link":"https:\/\/legalblog.ie\/fiscal-responsibility\/","title":{"rendered":"Fiscal Responsibility"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/legalblog.ie\/fiscal-responsibility\/#General\" title=\"General\">General<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/legalblog.ie\/fiscal-responsibility\/#Duty_of_Government\" title=\"Duty of Government\">Duty of Government<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/legalblog.ie\/fiscal-responsibility\/#Budgetary_rule\" title=\"Budgetary rule\">Budgetary rule<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/legalblog.ie\/fiscal-responsibility\/#Medium-term_budgetary_objective\" title=\"Medium-term budgetary objective\">Medium-term budgetary objective<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/legalblog.ie\/fiscal-responsibility\/#Mechanism_to_Correct\" title=\"Mechanism to Correct\">Mechanism to Correct<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/legalblog.ie\/fiscal-responsibility\/#Exceptional_Circumstances\" title=\"Exceptional Circumstances\">Exceptional Circumstances<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/legalblog.ie\/fiscal-responsibility\/#Key_Definitions\" title=\"Key Definitions\">Key Definitions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/legalblog.ie\/fiscal-responsibility\/#Advisory_Council\" title=\"Advisory Council\">Advisory Council<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/legalblog.ie\/fiscal-responsibility\/#Organisaion_of_Council\" title=\"Organisaion of Council\">Organisaion of Council<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/legalblog.ie\/fiscal-responsibility\/#Operation_of_Council\" title=\"Operation of Council\">Operation of Council<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"General\"><\/span>General<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Fiscal Responsibility Act makes provision for securing that the rules in Article 3 of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union take effect as part of the law of the State as required by that Treaty.<\/p>\n<p>The purpose of the Fiscal Responsibility Act 2012 is<\/p>\n<ul>\n<li>to make provision for securing that the rules in Article 3 of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union take effect in the law of the State in accordance with paragraph 2 of that Article and that the rule in Article 4 of that Treaty takes effect in the State;<\/li>\n<li>to make provision in accordance with Article 3 of that Treaty in relation to a medium-term budgetary objective and a correction mechanism;<\/li>\n<li>to establish a body to be known as Comhairle Chomhairleach Bhuis\u00e9adach na h\u00c9ireann or, in the English language, the Irish Fiscal Advisory Council and provide for its functions.<\/li>\n<\/ul>\n<p>Regulations to be made on the basis of common principles referred to in Article 3(2) of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union may only be made by the Minister for Finance if a draft of the regulations has been approved by a resolution of D\u00e1il Eireann.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Duty_of_Government\"><\/span>Duty of Government<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Governments to ensure that the budgetary rule and the debt rule are complied with. The section also provides that the official Spring and Autumn macroeconomic and budgetary forecasts prepared by the Department of Finance for the purposes of fiscal planning must include the data required to assess whether the Government is complying with the budgetary rule.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Budgetary_rule\"><\/span>Budgetary rule<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>One of the two conditions of the budgetary rule must be satisfied:<\/p>\n<ul>\n<li>the budgetary position of general government is in balance or in surplus and that this condition will be satisfied if<\/li>\n<li>the annual structural balance of the general government is at the medium-term budgetary objective; or<\/li>\n<li>the annual structural balance of the general government is complying with a set adjustment path towards the medium- term budgetary objective.<\/li>\n<\/ul>\n<p>In both conditions, a deviation from the medium-term budgetary objective or from the adjustment path is permitted if it results from exceptional circumstances.<\/p>\n<p>When the ratio of general government debt to GDP is above 60%, the ratio will be reduced in accordance with the relevant EU regulation under the Stability and Growth Pact.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Medium-term_budgetary_objective\"><\/span>Medium-term budgetary objective<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Act defines limits for the medium-term budgetary objective.<\/p>\n<p>There is a correction mechanism that will be triggered if there is a significant deviation of the general government\u2019s budgetary position from the medium-term budgetary objective or, if relevant, from the adjustment path towards the objective.<\/p>\n<p>There is to be a Fiscal Council. The Fiscal Council is independent in the performance of its functions and lists the functions of the Fiscal Council.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Mechanism_to_Correct\"><\/span>Mechanism to Correct<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>If the Commission addresses a warning to the State under the surveillance and coordination regulation or if the government consider there has been a failure to comply with the budgetary rule, which constitutes a significant deviation, the government shall within two months prepare and lay before the D\u00e1il, a plan specifying what is required to be done to secure compliance with the budgetary rule.<\/p>\n<p>The plan shall specify the period over which compliance with the budgetary rule is to be achieved.\u00a0 If that period is longer than a year, it shall specify annual targets to be met in moving toward such compliance, specifying the size and nature of the revenue and expenditure measures that are necessary to be taken to ensure such compliance and outlining how revenue and expenditure measures that are to be taken will relate to the different subsectors of the general government.<\/p>\n<p>The provision made by the plan is to be consistent with the rules of the Stability and Growth Pact and any recommendation made to the `State under the Stability and Growth Pact in relation to the period over which compliance \u00a0with the budgetary rule is to be achieved and decisive measures to be taken to secure such compliance and the current stability program.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Exceptional_Circumstances\"><\/span>Exceptional Circumstances<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>If the government considers that exceptional circumstances have arisen during the period specified in the plan, the things specified in the plan are no longer required to be done. When the government considers that the exceptional circumstances cease to exist, it shall unless there is no longer a failure, such as is mentioned above, within two months prepare and lay before D\u00e1il \u00c9ireann a new plan.<\/p>\n<p>If the government consider that a failure to comply with the budgetary rule is likely to occur, the government may within two months prepare and lay a statement before D\u00e1il \u00c9ireann outlining the steps the government intends to take to avoid such a failure.<\/p>\n<p>Exceptional circumstances are a period during which an unusual event outside the control of the State has a major impact on the financial position of the general government or a period of severe economic downturn within the meaning of the Stability and Growth Pact.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Key_Definitions\"><\/span>Key Definitions<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The annual structural balance of the general government in a year is the general government deficit or \u00a0general government surplus cyclically adjusted , net of one off and temporary measures expressed as a percentage of Gross Domestic Product.\u00a0 Cyclically adjusted means adjusted to take account of effects estimated to be due to the operation of the economic cycle.<\/p>\n<p>General government accounts is interpreted in accordance with the European system of accounts.\u00a0 General government debt is accounted for in accordance with EU regulations, as is general government deficit and general government surplus.<\/p>\n<p>The medium-term budgetary objective means the medium-term budgetary objective required by the surveillance and coordination regulation.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Advisory_Council\"><\/span>Advisory Council<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Irish Fiscal Advisory Council is established.\u00a0 That is an independent body and is independent in the performance of its functions.\u00a0 It is to monitor and at least annually provide an assessment of whether any obligations in the legislation or things specified in the plan are being complied with.<\/p>\n<p>An assessment is to include an assessment of whether in the opinion of the Council exceptional circumstances exist or have ceased to exist, if there is a failure of compliance with the budgetary rule and during a period specified, the plan, whether progress towards securing compliance is being made in accordance with the plan.<\/p>\n<p>The Fiscal Council is to provide an assessment of the official forecasts.\u00a0 In relation to each budget and stability program, it is to provide an assessment of whether the fiscal stance for the years concerned is in the opinion of the Council conducive to prudent economic and budgetary management including by reference to the provisions of the Stability and Growth Pact.<\/p>\n<p>The Fiscal Council will as soon as practicable, after completing an assessment, give a copy to the Minister and publish the same within 10 days.\u00a0 If the government does not accept an assessment of the Council in relation to any of the matters, the Minister shall within two months prepare and lay before D\u00e1il \u00c9ireann, a statement of the reasons for not accepting it.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Organisaion_of_Council\"><\/span>Organisaion of Council<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Fiscal Council consists of five members.\u00a0 The members of the Council are appointed by the Minister.\u00a0 In appointing members, the Minister is to have regard to the desirability of their having competence and experience in domestic and international macroeconomic and fiscal matters and to the extent practicable ensure an appropriate balance between men and women.<\/p>\n<p>The term of office of the Fiscal Council is four years.\u00a0 A person may not be appointed for more than two consecutive terms of office.<\/p>\n<p>The general provisions applicable to independent state bodies apply to the Council.\u00a0 It must keep accounts and present them to the Minister.\u00a0 Comptroller and Auditor General is to report on accounts of the Fiscal Council.\u00a0The Chairperson of the Council may be required to appear before D\u00e1il \u00c9ireann in relation to its accounts.<\/p>\n<p>The number of staff and their terms and conditions may be determined by the Fiscal Council with the consent of the Minister following consultation with the Minister for Public Expenditure and Reform.<\/p>\n<p>Staff shall be seconded from their duties and not be paid by the Council if they are nominated as candidates for election or elected to the Houses of the Oireachtas or the European Parliament or are nominated as a member of Seanad Eireann or become a member of a local authority. Members in the same circumstances shall cease to be members.<\/p>\n<p>This paragraph prohibits the disclosure of confidential information without the consent of the Council or the Minister if the information was supplied by the Minister.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Operation_of_Council\"><\/span>Operation of Council<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Fiscal Council shall be funded from the Central Fund. The paragraph sets a ceiling of \u20ac800,000 wh shall be adjusted in line with the annual percentage change in the Harmonised Index of Consumer Prices.<\/p>\n<p>The Fiscal Council will be required to keep proper accounts and it will be audited by the Comptroller and Auditor General.<\/p>\n<p>The chairperson of the Fiscal Council shall, when requested to do so in writing, appear before the Committee of Public Accounts and give evidence on the accounts and operations of the Council. The chairperson may also be summoned by a Committee of the Oireachtas to account for the performance of its functions under the Act.<\/p>\n<p>The Fiscal Council will be subject to the Freedom of Information Act 1997.The Fiscal Council is required to produce an annual report of its activities. The Minister shall lay the annual report before each House of the Oireachtas.The Fiscal Council will have a seal.<\/p>\n<!--themify_builder_content-->\n<div id=\"themify_builder_content-28093\" data-postid=\"28093\" class=\"themify_builder_content themify_builder_content-28093 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n","protected":false},"excerpt":{"rendered":"<p>General The Fiscal Responsibility Act makes provision for securing that the rules in Article 3 of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union take effect as part of the law of the State as required by that Treaty. The purpose of the Fiscal Responsibility Act 2012 is to make [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[56],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/28093"}],"collection":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/comments?post=28093"}],"version-history":[{"count":7,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/28093\/revisions"}],"predecessor-version":[{"id":30245,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/28093\/revisions\/30245"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=28093"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=28093"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=28093"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}