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An Oifig Buiséid Pharlaiminteach Parliamentary Budget Office
The role and functions of Ireland’s Parliamentary Budget Office (PBO)
Briefing Paper 1 of 2017
Séanadh
Is í an Oifig Buiséid Pharlaiminteach (OBP) a d’ullmhaigh an doiciméad seo mar áis do Chomhaltaí Thithe an Oireachtais ina gcuid dualgas parlaiminteach. Ní bheartaítear é a bheith uileghabhálach ná críochnúil. Féadfaidh an OBP aon fhaisnéis atá ann a bhaint as nó a leasú aon tráth gan fógra roimh ré. Níl an OBP freagrach as aon tagairtí d’aon fhaisnéis atá á cothabháil ag tríú páirtithe nó naisc chuig aon fhaisnéis den sórt sin ná as ábhar aon fhaisnéise den sórt sin. Tá baill foirne an OBP ar fáil chun ábhar na bpáipéar seo a phlé le Comhaltaí agus lena gcuid foirne ach ní féidir leo dul i mbun plé leis an mórphobal nó le heagraíochtaí seachtracha.
Disclaimer
This document has been prepared by the Parliamentary Budget Office (PBO) for use by the Members of the Houses of the Oireachtas to aid them in their parliamentary duties. It is not intended to be either comprehensive or definitive. The PBO may remove, vary or amend any information contained therein at any time without prior notice. The PBO accepts no responsibility for any references or links to or the content of any information maintained by third parties. Staff of the PBO are available to discuss the contents of these papers with Members and their staff, but cannot enter into discussions with members of the general public or external organisations.
Executive Summary 2
Introduction 4
Independent Fiscal Institutions 5
Improving Parliament’s capacity to exercise its budgetary oversight role 7
Factors influencing the effectiveness of PBOs 8
Publication protocols 9
Access to information 9
Budget and Staffing 9
Relationship with the legislature, and leadership 10
Advisory support and evaluation 11
Functions of OECD PBOs 13
The potential role and functions of the PBO in Ireland 15
Briefing on Economy and Public Finances 16
Analysis of the Government’s budget proposals 16
Supporting parliamentary committees 16
Costings 16
Conduct work at own initiative 17
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The role and functions of Ireland’s Parliamentary Budget Office (PBO)
Contents
This Briefing Paper sets out:
n The roles and functions of OECD Independent Fiscal Institutions (IFIs);
n The distinction between PBOs and other IFIs (in the case of Ireland, the Irish Fiscal Advisory Council (IFAC));
n How PBOs can improve Parliament’s capacity to exercise its budgetary oversight role;
n Some of the factors influencing the effectiveness of PBOs;
n The range of functions of OECD PBOs; and
n The potential role and functions of Ireland’s PBO.
It briefly recaps the background to the establishment of the PBO in Ireland and that of IFAC, and how they fit into the
budgetary landscape. It is intended that this will help to provide context to a discussion about the further development
of the PBO’s functions and the services to be provided to Members of the Houses of the Oireachtas.
Given Ireland’s membership of the OECD and the extensive OECD literature and experience in this area, this paper
addresses OECD countries only.
The PBO and the Irish Fiscal Advisory Council (IFAC) – Independent Fiscal Institutions (IFIs)
The term ‘Independent Fiscal Institutions (IFIs)’1 includes both Parliamentary Budget Offices and Fiscal Councils.
Both are publicly funded, independent bodies under the statutory or administrative authority of either the
legislature or the executive, which provide non-partisan oversight and analysis of (and sometimes advice on)
fiscal policy and value for money.
In Ireland, the PBO’s dedicated focus is on assisting the Houses of the Oireachtas and its committees.
With the establishment of the PBO, Ireland now has two IFIs. While they operate in the same policy sphere,
the PBO and the Irish Fiscal Advisory Council (IFAC) have different roles, objectives and statutory status. However,
in establishing the PBO, it will be important to ensure that there is no duplication with the work of the IFAC. To this
end, the two organisations are meeting regularly and intend to explore how they may co-operate with each other
to further develop the overall breadth and depth of analysis available – both to parliament and to other
stakeholders (including the public).
Ireland has previously been categorised as having the lowest parliamentary engagement with the budget process
of any OECD country.
1 As defined by the OECD.
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The role and functions of Ireland’s Parliamentary Budget Office (PBO)
Executive Summary
There are a number of benefits the establishment of a well-designed PBO can bring to parliament in relation to
improving budgetary scrutiny and accountability, particularly when it forms part of an inter-connected, and mutually
supporting, series of actions to enhance the Parliament’s role in the budget process. This includes making complex
budget information more easily accessible and providing it to parliament quickly, thereby facilitating increased
transparency in the budget process.
There is no single model for establishing IFIs in general, or PBOs in particular, and the institution must address local
needs and conform to the country’s legal framework and political culture. In addition, the resources available to PBOs
and the relative size of countries (see Table 1) should be taken into account.
However, the OECD suggests some fundamental principles be observed including:
n Impartiality;
n Sufficient technically competent staff;
n Ready access to timely information from the Government; and
n Effective communication channels (including with the media).
Various factors influence the effectiveness of PBOs and this paper reviews how Ireland’s PBO sits in the overall
framework of OECD PBOs with regard to these factors. The OECD recommends, for example, that the leadership of PBOs
should be selected on the basis of merit and technical competence and affirms that non-partisanship and independence
are pre-requisites for a successful IFI (see Table 2).
The mandates and functions, governance structures, leadership/staffing arrangements and budgets of PBOs differ from
country to country, depending on local institutional and environmental context. A significant amount of this variation
relates to whether or not the PBO is in an EU Member State, and accordingly is subject to the obligations of the Stability
and Growth Pact (SGP), the sequence of IFI establishment and the nature of the associated parliamentary debate.
Table 3 of this paper provides an overview of different functions, which a number of PBOs in OECD countries perform
(including Ireland). Ireland’s PBO was established in mid-August 2017 and the functions it will perform have yet to be
finalised. Ireland’s PBO, however, already addresses most of the functions that would be expected of a PBO. This paper
describes those functions in the context of the Houses of the Oireachtas, the potential role of Ireland’s PBO and what the
PBO has achieved to date. It also sets out the initial objectives and services of Ireland’s PBO.
Two significant functions are not being carried out at present. These relate to:
1. Costings;
2. Individual Member budget inquiries.
It should be emphasised in relation to both of those functions that the PBO is in its establishment phase and that there
is a substantial body of work to be carried out in relation to recruitment of staff; development of econometric models;
stakeholder relationship building and securing access to information.
A Discussion Paper is being prepared by the PBO in relation to the issue of Costings.
In relation to individual Member budget inquiries, the PBO is focussing on providing support, initially, to the Committee
on Budgetary Oversight.
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Ireland’s Parliamentary Budget Office (PBO) was established (on 15th August 2017) within the Houses of the
Oireachtas as part of the process of Dáil reform.2 A commitment in relation to its establishment was also made in
the Programme for a Partnership Government. The PBO is one of the specialist units which have been established in
recent years within the Houses of the Oireachtas Service. These include the Office of the Parliamentary Legal Advisor
and the Library & Research Service (L&RS).
2 The need for a Parliamentary Budgetary Office was identified by the OECD in its review of budget oversight by the Irish Parliament. The Oireachtas Sub-Committee on Dáil Reform, in its final report in May 2016, recommended that the office be established.
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The role and functions of Ireland’s Parliamentary Budget Office (PBO)
Introduction
The term ‘Independent Fiscal Institutions’ (IFIs) is used by the OECD and includes both Parliamentary Budget Offices
and Fiscal Councils. Both are publicly funded, independent bodies under the statutory or administrative authority of
either the legislature or the executive, which provide non-partisan oversight and analysis of (and sometimes advice on)
fiscal policy and value for money. This term is also employed by the European Union (EU) – another term is used by the
International Monetary Fund (IMF).3
A clear trend of establishing IFIs is evident in OECD member countries. The number has tripled since the financial
crisis of 2008, with the largest growth occurring in the European Union (EU) due to the changes to the fiscal framework.
According to the OECD (p.1), “Today IFIs are considered among the most important innovations in the emerging
architecture of public financial management.”4 A total of 26 out of 35 OECD countries have an IFI and a number
of those have multiple IFIs (e.g., Austria, Ireland).
In this regard, while fiscal decision-making is ultimately the responsibility of democratically elected representatives
(and the executive in most instances), IFIs are seen as a mechanism to:
n Help address bias towards spending and deficits;
n Generally enhance fiscal discipline;
n Promote greater fiscal transparency and accountability; and
n Raise the quality of public debate on fiscal policy.
It is also suggested that PBOs in particular help to lend credibility to the budget process, promote a culture of evaluation
and develop greater use of evidence-based policy making. IFIs generally have no legally binding enforcement power –
their primary tool of influence is communication and dissemination of their analysis through various channels. Part of
their objective is therefore to influence Government behaviour through promoting transparency and constructive debate.
IFIs differ from audit institutions in that their analysis is generally ex-ante rather than ex-post. Lack of ex ante
parliamentary debate on budget priorities was one of the issues noted by the OECD in their report (2015) on Ireland’s
parliament’s role in the budget process. Essentially therefore, their function is to promote accountability and
transparency in the management of public finances during the policy-making and budget formulation process.
One of the main differences between the Parliamentary Budget Office (PBO) institutional model and the Fiscal
Council model (e.g. IFAC) is that PBOs place their primary focus on parliamentary oversight of the budget process
and supporting the work of the Budget Committee (in whatever form that may take).5
3 While broadly analogous with the OECD definition, the EU definition of IFI encompasses a wider range of bodies. The IMF uses the term ‘Fiscal Council’ to describe IFIs but restricts the categories of organisations it includes, i.e. to Fiscal Councils and PBOs, i.e. in keeping with the OECD approach. For further information in an EU context click here; in respect of the IMF, here.
4 Principles for Independent Fiscal Institutions and Case Studies, OECD (2016), OECD Journal on Budgeting – Volume 2015/2. Available here.
5 A full overview of the role and function of the IFAC is available in the Oireachtas Library & Research Service Note available here.
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Independent Fiscal Institutions
The establishment of a fiscal council was a requirement of the EU/IMF Programme of Financial Support for Ireland
(December 2010). However, it had been proposed domestically in the National Recovery Plan 2011-2014, by a report
of the Oireachtas Joint Committee on Finance and the Public Service6 and also in a Department of Finance discussion
document.7
The IFAC was formally established as an independent statutory body under the Fiscal Responsibility Act 2012 (FRA).
Further EU regulations (July 2013) resulted in the council being assigned the role of endorsing the macroeconomic
forecasts produced by the Department of Finance on which budgets and stability programmes are based
(implemented by the Ministers and Secretaries (Amendment) Act 2013). The process of this additional function
is outlined in a Memorandum of Understanding (MoU) between the IFAC and the Department of Finance.
In general terms, it can be assumed that the functions of a PBO should be focussed in such a way as to avoid
duplication with another IFI, if such exists in that country. In Austria, for example, the Head of the PBO sits in the
Austrian Fiscal Council meetings as a non-voting member thus promoting good communication and co-ordination
between the institutions. In Ireland, and to this end, the Director of the PBO and the Chief Economist/Head of
Secretariat of the IFAC have already met on a number of occasions to clarify roles/objectives and to discuss
potential areas of co-operation.
6 Joint Committee on Finance and the Public Service, Fourth Report, Report on Macroeconomic Policy and Effective Fiscal and Economic Governance, November 2010.
7 Reforming Ireland’s Budgetary Framework: A Discussion Document, Department of Finance (March 2011).
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Anderson (2009)8 explores the value of an independent budget capacity located in the legislature for expanding
parliament’s role in budgeting and for holding the executive accountable. He finds that the role of an independent unit,
within parliament, can be to provide information which places the legislature on a more equal footing with the executive
branch. Providing such information is essential if the legislature is to play an effective role throughout the budget cycle.
Apart from this important function Anderson (p. 6) suggests that there are additional benefits which an independent,
analytic, budget unit can deliver. The most important of these functions are:
1. Simplifying complexity. Budget information – when made available by government – may be so complex that
the legislature has difficulty understanding it. An independent unit should be in a position to ‘translate’ this
information into a more easily understood format.
2. Promoting transparency. The knowledge and expertise of an independent budget unit should encourage the
promotion of transparency within the budget process.
3. Enhancing overall credibility. Government budget forecasts may benefit from enhanced credibility, as a result
of reduced complexity and enhanced transparency.
4. Improving the budget process. The work of the independent unit in providing a more simple, transparent,
credible, and accountable version of the budget may promote the revision and introduction by the government
of a budget process which is more straightforward and easier to understand.
5. Rapid responses. An independent budget unit which is an internal part of the legislature should provide much
more rapid responses to budget inquiries from the legislature than would usually be provided by government
bodies.
8 Anderson, Barry (2009), The Changing Role of Parliament in the Budget Process, OECD Journal on Budgeting Volume 2009/1
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Improving Parliament’s capacity to exercise its budgetary oversight role
There is no unique model for establishing IFIs and they are a relatively recent and novel feature within the scrutiny
framework. However, some lessons on good practice have been learned over the last number of years that identify
important factors in the effectiveness of IFIs in general:10
n The institution must address local needs and conform to the country’s legal framework and political culture.
In general, importing a model from abroad is not effective;
n Independence and non-partisanship is crucial to the effectiveness of IFIs of any institutional model.
They must be seen as impartial and able to express views freely and openly;
n They must have skilled, technically competent staff – in addition, staff numbers must be adequate
and commensurate with the institution’s mandate;
n Ready access to timely information from the Government is vital and this continues to be one of the biggest
challenges for institutions. Ideally, right of access to information should be set out in legislation and/or in
Memoranda of Understanding although it is understood that this does not necessarily guarantee such access;
n Most IFIs make all their research and material publicly available so as to reinforce the independent and
non-partisan nature of the work and to contribute to public debate on the public finances.
The following sub-sections provide (including in tabular format) an overview of how Ireland (in its establishment phase)
sits in the overall framework of OECD PBOs with regard to factors that would influence its effectiveness. Specific aspects
addressed are:
n Publication protocols;
n Access to information;
n Budget and Staffing;
n Relationship with the legislature (including leadership appointment);
n Advisory support and evaluation.
The PBOs in both Austria and Canada, in particular, have similar structures and stakeholder relationships to Ireland’s
PBO and thus are specifically referenced by comparison.
9 This section draws on data provided by the OECD (Personal communication, 13th September 2017) and from the OECD IFI Database.
10 Source: Kopits, G. Independent Fiscal Institutions: Developing Good Practices, Prepared for the 3rd Annual meeting of the OECD Parliamentary Budget Officials meeting in Stockholm, Sweden, on April 28th/29th, 2011 (Draft for discussion, pp.17-18).
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Factors influencing the effectiveness of PBOs9
Publication protocols
With regard to open publication, the Austrian PBO publishes all analyses on the Austrian Parliament’s website, where
they are freely accessible. The Canadian PBO is committed to using a fully transparent, open publishing model and all
of its analysis is reported openly to committees and parliamentarians, as well as being published on its website, where
it is freely available to the public. Ireland’s PBO emulates this model and has published all its publications to date on
its dedicated webpage (www.Oireachtas.ie/PBO) on the Houses of the Oireachtas website.
In some cases, in the interests of facilitating good relations and/or in the context of fact-checking, PBOs give
Government sight of reports in advance of publication. However it is understood that this is not a universal approach.
Access to information
Access to information is a critical success factor when establishing any PBO as the effectiveness of the institution
is limited if it cannot access timely and accurate budgetary information.
The OECD Principles for Independent Fiscal Institutions suggests that it is useful to set out an institution’s access to
information in legislation, as well as clearly defining any restrictions to access. It can be challenging to achieve such
access to budgetary information – both the Austrian and Canadian PBOs have cited such challenges.11 At present there
are no special provisions in place in Ireland regarding access to this information. However, Ireland’s PBO intends to
begin the process of formally agreeing with various stakeholders the most appropriate means of accessing the
information the Office requires.
Budget and Staffing
Staffing complement varies significantly between institutions and countries. The wide range of staff complements and
budgets are illustrated in Table 1 (over). It should be noted that Canada’s staffing complement is due to more than
double in size (to 42 over the next 18 months) due to a significant legislative amendment to its role and functions.12
11 In respect of Austria, see OECD Parliamentary Budget Officials and Independent Fiscal Institutions 6th Annual Meeting, The Knesset, Jerusalem Austria Parliamentary Budget Office Update. In respect of Canada, see 2013-14 Report on Activities of the Parliamentary Budget Office (p.ii).
12 This relates to ‘costings’ and is addressed in more detail later in this paper.
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Table 1 – OECD PBOs: Budget and Staffing
Country Institution name Institution’s budget (year) € equivalent
Staffing (FTEs)
Total Government expenditure (2015) € equivalent
Australia Parliamentary Budget Office (PBO) €4.49 million (2014) 38 €385.8 billion (2014)
Austria Parliamentary Budget Office (PBO) €0.9 million (2017) 8 €175.4 billion
Canada Parliamentary Budget Office (PBO) €1.85 million (2014) 17 n/a
Greece Parliamentary Budget Office (PBO) €0.5 million (2017) 16 €97.3 billion
Italy Parliamentary Budget Office (PBO) €6 million (2014) 33 €827.8 billion
Korea National Assembly Budget Office (NABO)
€11.06 million (2017) 138 €391.1 billion
Mexico Centre for Public Finance Studies (CEFP)
€2.26 million (2016) 60 n/a
USA Congressional Budget Office (CBO) €39.28 million (2016) 235 €5.87 trillion
Ireland Parliamentary Budget Office (PBO) €0.96 million (2018 projected)
15 (projected)
€75.3 billion
Source: OECD, Updated 9th November 2017 and PBO (Ireland)
Relationship with the legislature, and leadership
The OECD recommends that the leadership of PBOs should be selected on the basis of merit and technical competence,
without reference to political affiliation. It also states that, “[n]on-partisanship and independence are pre-requisites for a
successful IFI.”13 PBOs generally have an individual leadership structure and the Director is usually appointed for a fixed
term extending beyond the term of the Government. Ideally, the Office should have its own technical staff and the
director should have control over recruitment.
The report of the Oireachtas sub-committee on Dáil Reform (2016) recommended (p.15) that the PBO should be
established on a statutory basis. It has, initially, been established on an administrative basis.
Table 2 (over) situates Ireland in a comparative OECD context.
13 Von Trapp, Lisa & Nicol, Scherie, OECD (2016, p.20), Designing effective independent fiscal institutions.
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Advisory support and evaluation
The OECD Principles for Independent Fiscal Institutions14 recommend that IFIs develop a mechanism for external
evaluation of their work (principle 9.1). Almost half (44%) of the IFIs across OECD member countries have an external
advisory panel in place (or in development) in order to enhance the credibility of their work. This is particularly the case
in respect of those IFIs which prepare economic forecasts.
Advisory panels can be in place for a number of reasons. They may, for example, make suggestions in relation
to an institution’s programme of work and topics of concern or provide methodological or technical advice.
A small number of IFIs also engage in peer review – both formally and informally. For example, the Australian PBO
uses peer review processes, as required, for its major reports. Peer reviewers are familiar with the data, methodologies
and estimation techniques and have, in the past, been sourced from independent think tanks, academia, international
organisations, private sector economists and other IFIs. In each case their identity has been made public. The Canadian
PBO has also actively sought to have its work peer reviewed for external validation and to ensure the rigour of the
methodology and the results. To do this, it regularly collaborates with other institutions such as universities, think tanks,
the Canadian Association for Business Economics, the United States CBO and the International Monetary Fund (IMF).
The Irish Fiscal Advisory Council (IFAC) published their first external review in 201515 and have indicated a willingness for
external evaluation to take place on a regular basis – having also committed to initiating a second external review of the
Council’s operations in 2020 taking into account performance over the period since 2015.16 This approach may act as a
future model for Ireland’s PBO.17
Ex Post Evaluation of PBOs’ impact
In relation to ex post analysis of the impact of PBOs, the OECD has (2015, p.6)17 noted that various practices exist
within the OECD IFI community, to assess specific elements of an IFI’s mandate. These tools for assessment
include peer review of products, stakeholder satisfaction surveys, as well as resource compliance audits.
The OECD notes, however, that these tools do not provide a comprehensive evaluation of the IFI as an institution
in a specific context, with a defined set of inputs, which produces outputs and that considers the outcomes of its
work through the perceived confidence of its stakeholders.
The OECD is therefore developing a framework for a more comprehensive evaluation of IFIs and notes that a full
evaluation of an IFI can serve to legitimise the institution relevant to its environment, resources, products and
perceptions of its legislated and non-legislated stakeholders.
14 See Footnote 4 of this paper.
15 Available here.
16 IFAC Strategic Plan 2017-2019 (p.13). Available here.
17 See Draft Discussion Handout from the 7th Annual Meeting of OECD Parliamentary Budget Officials and Independent Fiscal Institutions, Austrian Parliament, Vienna, 16-17 April 2015, entitled Evaluating the Performance of Independent Fiscal Institutions: Towards a Common Evaluation Framework for Independent Parliamentary Budget Offices and Fiscal Councils.
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Table 2 – Relationship with legislature (IFIs including Ireland – PBO and IFAC)
Country Organisation
Rep
orts
pub
lish
ed
Key
repo
rts
sent
to
the
legi
slat
ure
Lead
ersh
ip
part
icip
ates
in
parl
iam
enta
ry
hear
ings
Parl
iam
ent p
lays
a
role
in a
ppoi
ntm
ent
or d
ism
issa
l pro
cess
fo
r le
ader
ship
Lead
ersh
ip te
rm
leng
th
Lead
ersh
ip
appo
intm
ent-
rene
wab
le
Canada Parliamentary Budget Office (PBO)
• • • × 5 years Once
Italy Parliamentary Budget Office (PBO)
• • • • 6 years Non-renewable
Korea National Assembly Budget Office (NABO)
• • • • Not defined1
Not defined
Mexico Center for Public Finance Studies (CEFP)
• • • • 5 years2 Once
US Congressional Budget Office (CBO)
• • • • 4 years Without limit
Greece Parliamentary Budget Office (PBO)
• • • • 5 years Once
Australia Parliamentary Budget Office (PBO)
• • • • 4 years Once
Ireland Parliamentary Budget Office (PBO)
• • • × 5 years Not defined
Austria Fiscal Advisory Council (FISK)
• • • × 5 years Without limit
Ireland Fiscal Advisory Council
• • • • 4 years Once
Footnotes:1 In Korea, in practice every two years the Speaker of the National Assembly changes and the NABO Chief resigns at the same time.
2 In Mexico none of the past 5 Directors to date have served a full 5 year term or been renewed.
Key:• = Yes × = No
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While there are many similar features as outlined above, nonetheless there is significant variation between institutions
which are described as PBOs. Their mandates and functions, governance structures, leadership/staffing arrangements
and budget differ from country to country, depending on the local institutional and environmental context.
Variations arise based on whether or not the PBO is in an EU Member State, the order of IFI establishment18 and
the nature of the associated parliamentary debate.
Outside of the EU, the PBO tends to be the dominant model and it typically has a broad range of functions. In the
United States of America for example, the Congressional Budget Office (CBO) has a broad mandate because Congress
is the budget-maker, rather than because there is no other IFI.
Therefore, the functions of a PBO depend on a number of aspects including:
n What functions are being served by existing institutions (including other IFIs);
n The nature of the parliamentary system; and
n The local political context.
Table 3 (over) provides a comparative overview of OECD PBO functions – a selected number of these functions are then
described in more detail.
It may be noted that Austria has a similar institutional framework to Ireland’s, given that it also has both a PBO and a
Fiscal Advisory Council and is also an EU (and Euro Zone) Member State.19 For this reason, the table details both
Ireland’s IFAC and the Austrian FISK in addition to a range of OECD PBOs.
18 i.e. which IFI is first established – in the case of Ireland, this was the IFAC.
19 Greece also has both a fiscal council and PBO. Portugal has the UTAO (a technical budget support unit) in Parliament in addition to the Public Finance Council (CFP).
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Functions of OECD PBOs
Tabl
e 3
– O
ECD
PB
O f
unct
ions
(Ir
elan
d/A
ustr
ia I
FI f
unct
ions
)
Coun
try
FUN
CTIO
NS
Briefing on economy and
public finance
Analyse executive’s
budget proposals
Support parliamentary
committees
Long Term fiscal sustainability
analysis
Role in macroeconomic
or fiscal forecasts
Cost estimates (policies,
legislation)1
Individual member budget
inquiries2
Monitoring compliance w/
fiscal rules
Costing election platforms
Tracking cost of legislation
(scorekeeping)
Analysis of performance
budgeting
Evaluation of major national
projects
Conduct work at own initiative
Kore
a•
••
•
••
××
××
••
Mex
ico
••
•×
•
•×
××
××
•
Uni
ted
Stat
es•
••
•
••
××
•×
ו
Aus
tral
ia•
••
•×
••
ו
××
ו
Cana
da•
••
•
•×
××
××
ו
Gre
ece
••
••
n×
ו
××
××
•
Ital
y•
••
•n
××
•×
××
ו
Aus
tria
– P
BO
••
••
××
•×
××
•×
•
Irel
and
– PB
O3
••
•×
×TB
D×
×TB
D×
××
•
Tota
l – P
BO
99
97
65
52
11
11
9
% o
f OEC
D P
BO
s10
0%10
0%10
0%78
%67
%55
%55
%22
%11
%11
%11
%11
%10
0%
Aus
tria
– F
AC (F
ISK)
•×
ו
n×
ו
××
××
•
Irel
and
– IF
AC4
•×
See
foot
note
•Se
e fo
otno
te×
ו
××
××
•
Foot
note
s:1
The
Aus
tria
n P
BO
, the
Gre
ek P
BO
and
the
Ital
ian
PB
O u
nder
take
impa
ct a
sses
smen
t of n
ew le
gisl
atio
n
2 Th
e A
ustr
ian
PB
O a
nd th
e M
exic
an C
EFP
cond
uct i
ndiv
idua
l mem
ber i
nqui
ries
for m
embe
rs o
f the
bud
get c
omm
itte
es o
nly.
The
CB
O e
ncou
rage
s in
divi
dual
mem
bers
to c
hann
el in
quir
ies
thro
ugh
com
mit
tees
. The
Can
adia
n P
BO
doe
s no
t pro
cess
indi
vidu
al m
embe
r inq
uiri
es re
lati
ng to
the
budg
et –
it d
oes
proc
ess
finan
cial
cos
ting
s fo
r ind
ivid
ual m
embe
rs.
3 W
ith
rega
rd to
Cos
t est
imat
es, a
Dis
cuss
ion
Pape
r is
bein
g pr
epar
ed b
y th
e P
BO
. TB
D: T
o be
det
erm
ined
. Wit
h re
gard
to “
Ana
lysi
s of
per
form
ance
bud
geti
ng”,
the
PB
O m
ay m
ake
use
of p
erfo
rman
ce b
udge
ting
dat
a bu
t doe
s no
t pr
epar
e ex
ant
e pe
rfor
man
ce a
naly
sis.
4 W
ith
rega
rd to
“Ro
le in
Mac
roec
onom
ic o
r fisc
al fo
reca
sts”
, IFA
C ha
s an
end
orse
men
t fun
ctio
n (f
or m
acro
econ
omic
fore
cast
s) a
s w
ell a
s an
ass
essm
ent f
unct
ion
(for
mac
roec
onom
ic a
nd b
udge
tary
fore
cast
s) a
nd a
rare
nor
mat
ive
man
date
to a
sses
s th
e fis
cal s
tanc
e. A
“Lo
ng T
erm
fisc
al s
usta
inab
ility
ana
lysi
s” is
not
spe
cific
ally
man
date
d in
the
case
of t
he IF
AC b
ut is
rega
rded
as
part
of i
ts ro
le a
nd re
gula
r out
put.
Whi
le th
e IF
AC d
oes
not h
ave
a fo
rmal
role
in
supp
orti
ng O
ireac
htas
com
mit
tees
it d
oes
appe
ar b
efor
e th
e Co
mm
itte
e on
Bud
geta
ry O
vers
ight
on
regu
lar o
ccas
ions
.
Key:
• =
Yes
× =
No
= A
sses
s fo
reca
sts
only
n
= P
repa
re a
lter
nati
ve fo
reca
sts
Sour
ce fo
r non
-Iri
sh d
ata:
OEC
D (P
erso
nal c
omm
unic
atio
ns o
f 13t
h Se
ptem
ber 2
017
and
3rd
Nov
embe
r 201
7)
The
role
and
func
tion
s of
Irel
and’
s Pa
rlia
men
tary
Bu
dget
Off
ice
(PB
O)
The role and functions of Ireland’s Parliamentary Budget Office (PBO)
14
According to Wehner (2010),20 Ireland has the lowest parliamentary engagement with budget process of any OECD
country (based on the ‘index of legislative budget institutions’).21
The establishment of the PBO was one of a number of recommendations made in the OECD report Review of Budget
Oversight: Ireland (November 2015). The OECD suggested (p.41) that the Office would (in line with the role of PBOs
generally), “provide specialist analytical support to parliamentarians and…facilitate effective scrutiny throughout
all stages of the budget cycle.”
The purpose of these recommendations was to improve Dáil Éireann’s engagement with the budget process, and in
turn improve the evidential basis and quality of budgetary policy development, decision making and accountability.
The OECD review highlighted (p.14) the need to, “equip parliamentarians to engage more effectively on budgetary
matters, including through analysis of information on taxation, expenditure and performance, as well as policy
costings.”It also noted (p.41) that the functions of the PBO, “should complement and not overlap with those of IFAC”.
Following on from that report, the Oireachtas sub-committee on Dáil Reform also recommended, in May 2016, that the
office be established.
The establishment of the PBO was then provided for in the Programme for a Partnership Government (p.16) following
the 2016 General Election.
In respect of Government, the 2015 Spring Economic Statement (SES) had also noted (p.46) that it would examine,
“establishing an Independent Budget Office”. This proposal did not undergo any subsequent development and was
superseded by the OECD’s recommendations.
20 Wehner, J. (2010). Legislatures and the Budget Process: The Myth of Fiscal Control. New York, Palgrave Macmillan.
21 This index is a composite metric that compares legislative budget engagement across countries, based on a range of objective criteria.Tabl
e 3
– O
ECD
PB
O f
unct
ions
(Ir
elan
d/A
ustr
ia I
FI f
unct
ions
)
Coun
try
FUN
CTIO
NS
Briefing on economy and
public finance
Analyse executive’s
budget proposals
Support parliamentary
committees
Long Term fiscal sustainability
analysis
Role in macroeconomic
or fiscal forecasts
Cost estimates (policies,
legislation)1
Individual member budget
inquiries2
Monitoring compliance w/
fiscal rules
Costing election platforms
Tracking cost of legislation
(scorekeeping)
Analysis of performance
budgeting
Evaluation of major national
projects
Conduct work at own initiative
Kore
a•
••
•
••
××
××
••
Mex
ico
••
•×
•
•×
××
××
•
Uni
ted
Stat
es•
••
•
••
××
•×
ו
Aus
tral
ia•
••
•×
••
ו
××
ו
Cana
da•
••
•
•×
××
××
ו
Gre
ece
••
••
n×
ו
××
××
•
Ital
y•
••
•n
××
•×
××
ו
Aus
tria
– P
BO
••
••
××
•×
××
•×
•
Irel
and
– PB
O3
••
•×
×TB
D×
×TB
D×
××
•
Tota
l – P
BO
99
97
65
52
11
11
9
% o
f OEC
D P
BO
s10
0%10
0%10
0%78
%67
%55
%55
%22
%11
%11
%11
%11
%10
0%
Aus
tria
– F
AC (F
ISK)
•×
ו
n×
ו
××
××
•
Irel
and
– IF
AC4
•×
See
foot
note
•Se
e fo
otno
te×
ו
××
××
•
Foot
note
s:1
The
Aus
tria
n P
BO
, the
Gre
ek P
BO
and
the
Ital
ian
PB
O u
nder
take
impa
ct a
sses
smen
t of n
ew le
gisl
atio
n
2 Th
e A
ustr
ian
PB
O a
nd th
e M
exic
an C
EFP
cond
uct i
ndiv
idua
l mem
ber i
nqui
ries
for m
embe
rs o
f the
bud
get c
omm
itte
es o
nly.
The
CB
O e
ncou
rage
s in
divi
dual
mem
bers
to c
hann
el in
quir
ies
thro
ugh
com
mit
tees
. The
Can
adia
n P
BO
doe
s no
t pro
cess
indi
vidu
al m
embe
r inq
uiri
es re
lati
ng to
the
budg
et –
it d
oes
proc
ess
finan
cial
cos
ting
s fo
r ind
ivid
ual m
embe
rs.
3 W
ith
rega
rd to
Cos
t est
imat
es, a
Dis
cuss
ion
Pape
r is
bein
g pr
epar
ed b
y th
e P
BO
. TB
D: T
o be
det
erm
ined
. Wit
h re
gard
to “
Ana
lysi
s of
per
form
ance
bud
geti
ng”,
the
PB
O m
ay m
ake
use
of p
erfo
rman
ce b
udge
ting
dat
a bu
t doe
s no
t pr
epar
e ex
ant
e pe
rfor
man
ce a
naly
sis.
4 W
ith
rega
rd to
“Ro
le in
Mac
roec
onom
ic o
r fisc
al fo
reca
sts”
, IFA
C ha
s an
end
orse
men
t fun
ctio
n (f
or m
acro
econ
omic
fore
cast
s) a
s w
ell a
s an
ass
essm
ent f
unct
ion
(for
mac
roec
onom
ic a
nd b
udge
tary
fore
cast
s) a
nd a
rare
nor
mat
ive
man
date
to a
sses
s th
e fis
cal s
tanc
e. A
“Lo
ng T
erm
fisc
al s
usta
inab
ility
ana
lysi
s” is
not
spe
cific
ally
man
date
d in
the
case
of t
he IF
AC b
ut is
rega
rded
as
part
of i
ts ro
le a
nd re
gula
r out
put.
Whi
le th
e IF
AC d
oes
not h
ave
a fo
rmal
role
in
supp
orti
ng O
ireac
htas
com
mit
tees
it d
oes
appe
ar b
efor
e th
e Co
mm
itte
e on
Bud
geta
ry O
vers
ight
on
regu
lar o
ccas
ions
.
Key:
• =
Yes
× =
No
= A
sses
s fo
reca
sts
only
n
= P
repa
re a
lter
nati
ve fo
reca
sts
Sour
ce fo
r non
-Iri
sh d
ata:
OEC
D (P
erso
nal c
omm
unic
atio
ns o
f 13t
h Se
ptem
ber 2
017
and
3rd
Nov
embe
r 201
7)
The
role
and
func
tion
s of
Irel
and’
s Pa
rlia
men
tary
Bu
dget
Off
ice
(PB
O)
15
The role and functions of Ireland’s Parliamentary Budget Office (PBO)
The potential role and functions of the PBO in Ireland
PBO initial objectives and services
The initial objectives and services of Ireland’s Parliamentary Budget Office (PBO) are set out in a publication
available on its webpage. The key objective is to support the Houses of the Oireachtas and its committees in
relation to fiscal issues and the management of the public finances. The PBO’s services will include advising
Members in relation to:
l The EU fiscal rules including the Stability and Growth Pact (SGP), the Expenditure Benchmark (EB),
the Medium Term Objective (MTO), and the EU Semester process;
l Irish and international macro-economic developments;
l The national budgetary process and rules including the Medium Term Expenditure Framework (MTEF);
l The composition and sustainability of the revenue base;
l The efficiency, effectiveness and value for money of public services especially in the context of voted
expenditure (which forms the great bulk of Government expenditure).
Briefing on Economy and Public Finances
This is a standard function within most PBOs and Ireland’s PBO has commenced this with the publication of its
first Quarterly Commentary.
Analysis of the Government’s budget proposals
This too is a standard function within most PBOs and Ireland’s PBO appeared before the Oireachtas Committee
on Budgetary Oversight to discuss Budget 2018 on the following dates:
n 27th September prior to the appearance of the Minister for Finance and Public Expenditure and Reform
to present its pre-Budget 2018 Commentary and Key messages;
n 25th October to present and discuss its post-Budget 2018 Commentary.
Supporting parliamentary committees
The Austrian PBO, for example, has a special relationship with the Budget Committee of its parliament and it is
foreseen that Ireland’s PBO will, at least initially, focus on the Oireachtas Committee on Budgetary Oversight.
Costings
A Discussion Paper is being prepared by Ireland’s PBO which will set out the context, options and the potential
associated resource implications of such a function. A distinction can, however, be made between costing election
platforms and costing legislation/policy.
In general, it may be noted that costing may constitute a very challenging and resource-intensive undertaking –
not simply in analytical terms but also in terms of generating political capital and trust, i.e. establishing a ‘track record’
with all relevant stakeholders.
The
role
and
func
tion
s of
Irel
and’
s Pa
rlia
men
tary
Bu
dget
Off
ice
(PB
O)
The role and functions of Ireland’s Parliamentary Budget Office (PBO)
16
Election platforms
As can be seen in Table 3, costing of election platforms is not normally a function of PBOs.22
A recent development of interest concerns Canada’s PBO – the Parliament of Canada Act as amended (Section 79.21)23
which was passed just before the summer 2017 recess states that:
“the Parliamentary Budget Officer shall, at the request of an authorised representative or a member, estimate
the financial cost of any election campaign proposal that the authorised representative’s party or the member
is considering making.”
It is understood that this legislative expansion of the Canadian PBO’s remit will require a very significant increase in
financial resources and a doubling in size to enable that Office to undertake this function. Ireland’s PBO has, initially,
been established on an administrative rather than a legislative basis.
Reference is also frequently made to the work undertaken by the Centraal Planbureau (CPB) – the Netherlands Bureau
for Economic Policy Analysis – which was established in 1945 and is one of the longest established IFIs in Europe. Its
functions have, however, evolved over time and it does not constitute a PBO as described in this paper.24 In the 1980s,
the CPB’s role was extended to include a costing service for election manifestos, examining short and long-term effects
and impacts of party proposals. The CPB employs some 130 staff and has an annual budget of approx. €13 million.
Legislative/policy costing
When undertaken, the approach varies depending on the size of the institution and its mandate.
However, it is also possible to differentiate between initial and ongoing costing. For example, the US Congressional
Budget Office (CBO), which is very well resourced, costs between 500 and 700 Bills annually.25 In the US context
however, apart from its initial costings of legislation, the CBO routinely monitors the budgetary effects of enacted
legislation to help improve projections of spending and receipts under current law, as well as to improve cost estimates
for new legislative proposals.
Other institutions are more selective, such as the Canadian PBO which prioritises requests for costing based on whether
or not the proposal can reasonably be expected to have an impact on the Canadian economy or the Government’s
finances or estimates (a ‘materiality clause’).
Conduct work at own initiative
Most PBOs publish pro-active publications and would reserve the right to publish, on occasion, in relation to areas that
fall within their remit. This is also the case for Ireland’s PBO which has published its first two Notes – Gender Budgeting
and Public Service Performance Report 2016.26 This paper constitutes the third such publication.
22 The Australian PBO is an exception.
23 Available here.
24 The CPB’s mandate includes undertaking independent analysis relevant for economic policy making, preparation of the official Government forecasts of economic and fiscal development, the annual Central Economic Plan, and cost-benefit analyses (CBAs) of major infrastructure projects.
25 Essentially, this constitutes every Bill reported by Congressional Committees.
26 Available here.
The
role
and
func
tion
s of
Irel
and’
s Pa
rlia
men
tary
Bu
dget
Off
ice
(PB
O)
The role and functions of Ireland’s Parliamentary Budget Office (PBO)
17
Notes
The
role
and
func
tion
s of
Irel
and’
s Pa
rlia
men
tary
Bu
dget
Off
ice
(PB
O)
The role and functions of Ireland’s Parliamentary Budget Office (PBO)
18
Notes
The
role
and
func
tion
s of
Irel
and’
s Pa
rlia
men
tary
Bu
dget
Off
ice
(PB
O)
The role and functions of Ireland’s Parliamentary Budget Office (PBO)
19
Notes
The
role
and
func
tion
s of
Irel
and’
s Pa
rlia
men
tary
Bu
dget
Off
ice
(PB
O)
The role and functions of Ireland’s Parliamentary Budget Office (PBO)
20
Contact: [email protected] Go to our webpage: www.Oireachtas.ie/PBO Publication date: 24 November 2017
Houses of the Oireachtas Leinster House Kildare Street Dublin 2 D02 XR20
www.oireachtas.ie Tel: +353 (0)1 6183000 or 076 1001700 Twitter: @OireachtasNews
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