Jump to content

Irish Fiscal Advisory Council: Difference between revisions

Edit links
From Wikipedia, the free encyclopedia
Browse history interactively
← Previous editNext edit →
Content deleted Content added
VisualWikitext
Line 77: Line 77:
Ireland's economic data is distorted by the tax planning schemes of US multinationals based in Ireland (i.e. "[[double Irish]]"). While traditionally this distortion manifested itself in divergences between Ireland's GDP and GNI, as the schemes have become more developed (i.e. "[[double Irish|capital allowances for intangibles]]"), Irish GNI and GNP have also become materially distorted. This was most evident in the "[[leprechaun economics]]" affair when Apple restructured its controversial Irish operations (the subject of the EU Commission's €13bn fine) in January 2015 and Irish GDP rose 26.3% while Irish GNP rose 18.7%.
Ireland's economic data is distorted by the tax planning schemes of US multinationals based in Ireland (i.e. "[[double Irish]]"). While traditionally this distortion manifested itself in divergences between Ireland's GDP and GNI, as the schemes have become more developed (i.e. "[[double Irish|capital allowances for intangibles]]"), Irish GNI and GNP have also become materially distorted. This was most evident in the "[[leprechaun economics]]" affair when Apple restructured its controversial Irish operations (the subject of the EU Commission's €13bn fine) in January 2015 and Irish GDP rose 26.3% while Irish GNP rose 18.7%.


The problem of Ireland's economic statistics post "leprechaun economics" and "modified GNI", is captured on page 34 of the OECD Ireland survey:<ref name="oecd">{{cite web|url=http://www.finance.gov.ie/wp-content/uploads/2018/03/OECD-survey.pdf|title=OECD Ireland Survey 2018|publisher=OECD|date=March 2018}}</ref>
Page 34 of the OECD's Ireland Report (for 2018) highlight the issue:


* On a Gross Public Debt-to-GDP basis, Ireland's 2015 figure at 78.8% is not of concern.
IFAC has introduced a new measure of thinking about Irish public debt by comparing to Tax Revenues (similar to the Debt-to-EBITDA ratio using in capital markets). On this bases, Ireland's 2016 Gross Public Debt-to-Tax Revenues is 282.9%, which is the 4th highest of the EU-28 (after Greece, Portugal, and Cyprus).
* On a Gross Public Debt-to-GNI* basis, Ireland's 2015 figure at 116.5% is more serious, but not alarming.
* On a Gross Public Debt Per Capita basis, Ireland's 2015 figure at over $62,686 per capita, exceeds every other OECD country, except Japan.

IFAC has introduced a new measure of thinking about Irish public debt by comparing to Tax Revenues (similar to the Debt-to-EBITDA ratio using in capital markets). On this basis, Ireland's 2016 Gross Public Debt-to-Tax Revenues is 282.9%, which is the 4th highest of the EU-28 (after Greece, Portugal, and Cyprus).<ref>{{cite web|url=http://www.fiscalcouncil.ie/wp-content/uploads/2017/07/Fiscal-Assessment-Report-June-2017-Presentation.pdf|title=Debt levels remain high following the crisis June FAR Slide 7 | publisher=Irish Fiscal Advisory Council | date=June 2017}}</ref><ref>{{cite web|url=http://www.fiscalcouncil.ie/wp-content/uploads/2017/06/Fiscal-Assessment-Report-June-2017-Final.pdf|title=Section 1.2.2 Recent Fiscal Context June FAR Page 14 | publisher=Irish Fiscal Advisory Council | date=June 2017}}</ref>

In this regard, IFAC advised the Irish Government against using public funds, or proceeds from State asset sales, to stimulate the fast-growing Irish economy, and instead use for debt repayment.<ref>{{cite web|url=https://www.rte.ie/news/business/2017/0607/880813-national-debt-it-hasnt-gone-away-you-know/|title=National Debt - it hasn't gone away, you know | publisher=RTE News | date=June 2017}}</ref>


===Corporate Taxes===
===Corporate Taxes===

Revision as of 12:21, 6 April 2018

Irish Fiscal Advisory Council (IFAC)
Company typeIndependent Statutory Body
GenreIndependent Budgetry Oversight of State
FoundedJuly 2012 (interim)
12 December 2012
Headquarters
Whitaker Square,
(ESRI Building),
Sir John Rogerson’s Quay,
Dublin D02 K138
,
Ireland
Area served
Ireland
Key people
Seamus Coffey (Chairperson)
Mr Sebastian Barnes
Dr Íde Kearney
Mr Michael G. Tutty
Dr Martina Lawless
ProductsStatutory Body that conducts independent budgetry oversight of Irish State finances and compliance with leglislated fiscal rules
WebsiteIFAC website

Irish Fiscal Advisory Council ("IFAC") is a non-department statutory body that provides independent assessment and analysis of the Irish Government's economic and budgetary forecasts, as well as its wider fiscal approach. It also monitors compliance with EU budgetary/fiscal rules and other EU agreements.

Purpose

IFAC was formed as part of an agenda of reform of Ireland’s budgetary architecture post the Irish economic and financial crisis. It was created on an interim basis in July 2011, and legally created formed under the Fiscal Responsibility Act 2012[1] which was part of the EU-IMF Programme of Financial Support for Ireland.

IFAC performs a similar role to the Office for Budget Responsibility in the United Kingdom (also formed after the financial crisis) or other equivalent members of the Network of European Union Independent Fiscal Institutions (which IFAC joined in Septemeber 2015).[2]

IFAC is structured as a Council of 5 members (one Chairperson) and a supporting analytical team of circa 6.

The formal mandate of the Irish Fiscal Advisory Council (per IFAC website) is to:

  • Assess and endorse the Irish Government’s official macroeconomic forecasts.
  • Assess the Irish Government's budgetary forecasts.
  • Assess the broader fiscal stance of the Irish Government.
  • Monitor compliance with legislated fiscal rules by the Irish Government.

IFAC has been well received by Irish financial commentators and its publications are widely covered in the Irish media.[3][4][5]

Publications

The key mandated publications of the Irish Fiscal Advisory Council are:

  • Bi-annual Fiscal Assessment Report (FAR) (produced after the Irish autumn Budget, and the spring Stability Update).[6]
  • Bi-annual Endorsement Letters of macroeconomic forecasts (produced in advance of the Irish autumn Budget, and the spring Stability Update).[7]
  • Annual Pre-Budget Statement (produced before the Irish autumn Budget).[8]
  • Annual Ex-Post Assessment of Compliance with the Domestic Budgetary Rule.[9]

The Irish Fiscal Advisory Council has commenced an annual conference titled “Path for the Public Finances” that was started in March 2017. The goal is to bring attention to long-term Irish State finance issues relevant for Ireland. International speakers attend. Each annual event is intended to focus on a particular theme, which has been:

  • March 2017 Path for the Public Finances: Fiscal Risks.[10]
  • March 2018 Path for the Public Finances: Too Hot, Too Cold! The Irish Cycle.[11]

IFAC also publishes Analytical Notes and Working Papers in areas of concern to Irish financial stability (including House Prices, Tax Receipts, Public Debt, and EU Rules/Guidelines).[12]

Focus

The IFAC looks for areas that would affect the stability and confidence levels around Irish economic forecasts, and/or, create potential for economic shocks.

Public Debt

See also: Leprechaun economics
See also: Corporation tax in the Republic of Ireland

Ireland's economic data is distorted by the tax planning schemes of US multinationals based in Ireland (i.e. "double Irish"). While traditionally this distortion manifested itself in divergences between Ireland's GDP and GNI, as the schemes have become more developed (i.e. "capital allowances for intangibles"), Irish GNI and GNP have also become materially distorted. This was most evident in the "leprechaun economics" affair when Apple restructured its controversial Irish operations (the subject of the EU Commission's €13bn fine) in January 2015 and Irish GDP rose 26.3% while Irish GNP rose 18.7%.

The problem of Ireland's economic statistics post "leprechaun economics" and "modified GNI", is captured on page 34 of the OECD Ireland survey:[13]

  • On a Gross Public Debt-to-GDP basis, Ireland's 2015 figure at 78.8% is not of concern.
  • On a Gross Public Debt-to-GNI* basis, Ireland's 2015 figure at 116.5% is more serious, but not alarming.
  • On a Gross Public Debt Per Capita basis, Ireland's 2015 figure at over $62,686 per capita, exceeds every other OECD country, except Japan.

IFAC has introduced a new measure of thinking about Irish public debt by comparing to Tax Revenues (similar to the Debt-to-EBITDA ratio using in capital markets). On this basis, Ireland's 2016 Gross Public Debt-to-Tax Revenues is 282.9%, which is the 4th highest of the EU-28 (after Greece, Portugal, and Cyprus).[14][15]

In this regard, IFAC advised the Irish Government against using public funds, or proceeds from State asset sales, to stimulate the fast-growing Irish economy, and instead use for debt repayment.[16]

Corporate Taxes

Council

Chairperson

  • 2nd (2016-current) UCC economist Seamus Coffey.[17]
  • 1st (2011-2016) UCG Professor John McHale.[18]

Council members

  • Mr Sebastian Barnes
  • Dr Íde Kearney
  • Mr Michael G. Tutty
  • Dr Martina Lawless

See also

References

  1. ^ "Fiscal Responsibility Act 2012" (PDF). Department of Finance. 2012.
  2. ^ "What is the Irish Fiscal Advisory Council for?". Irish Independent. 14 June 2015.
  3. ^ "Fiscal Advisory Council's timely warning". Irish Times. 7 September 2017.
  4. ^ "Fiscal Council says Ireland is still vulnerable and warns against extra Budget spending". thejournal.ie. 5 September 2017.
  5. ^ "Chairman, Fiscal Advisory Council: 'There's been a very strong recovery - we are now living within our means'". thejournal.ie. 18 January 2018.
  6. ^ "Fiscal Assessment Reports". Irish Fiscal Advisory Council. 2018.
  7. ^ "Endorsement Letters". Irish Fiscal Advisory Council. 2018.
  8. ^ "Pre-Budget Statements". Irish Fiscal Advisory Council. 2018.
  9. ^ "Assessments of Compliance with the Domestic Budgetary Rule". Irish Fiscal Advisory Council. 2018.
  10. ^ "Path for the Public Finances 2017 Fiscal Risks". Irish Fiscal Advisory Council. 2017.
  11. ^ "Path for the Public Finances 2018 Too Hot Too Cold The Irish Cycle". Irish Fiscal Advisory Council. 2018.
  12. ^ "IFAC Analytical Notes Series". Irish Fiscal Advisory Council. 2018.
  13. ^ "OECD Ireland Survey 2018" (PDF). OECD. March 2018.
  14. ^ "Debt levels remain high following the crisis June FAR Slide 7" (PDF). Irish Fiscal Advisory Council. June 2017.
  15. ^ "Section 1.2.2 Recent Fiscal Context June FAR Page 14" (PDF). Irish Fiscal Advisory Council. June 2017.
  16. ^ "National Debt - it hasn't gone away, you know". RTE News. June 2017.
  17. ^ "Michael Noonan appoints Seamus Coffey as Chairperson of Fiscal Advisory Council". 21 December 2016.
  18. ^ "John McHale to step down as fiscal council chief". Irish Time. 25 October 2016.
Retrieved from "https://en.wikipedia.org/w/index.php?title=Irish_Fiscal_Advisory_Council&oldid=834565100"