OECD review gives Fiscal Council the thumbs up

[Brendan Burgess]

OECD conducts independent Review of the Irish Fiscal Advisory Council​

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The OECD has completed a comprehensive Review of the Irish Fiscal Advisory Council drawing on international and local experts. The Review team held a series of interviews with stakeholders in March 2026.

The OECD Review finds that the Council “punches above its weight”. It ranks the Council sixth of the fiscal institutions ranked by the OECD, among the top performers and on a par with far larger organisations. It describes it as a highly credible and influential institution. The reviewers highlight the Council's independence, high-quality analysis and its role in informing public debate on fiscal policy, all delivered by a small team.

The Review flags that the Government has not increased the Council’s budget in real terms since it was first established. This is despite adding two new functions to its mandate, with a third expected soon. This recommendation has been outstanding since the 2021 OECD Review. The reviewers say, “no material progress can yet be claimed in this area”. Legislation to fix this was proposed in 2021 and has been on the agenda since spring 2023 but has yet to be adopted. These constraints have forced real trade-offs, falling directly on the Council’s ability to continue its in-depth, long-term analysis.

The Review points to several ways the Council’s effectiveness could be further strengthened:

• Addressing persistent gaps and delays in the Council’s access to official spending data.

• Giving the Council full autonomy over how its budget is used. Currently, this lack of autonomy is inconsistent with international best practice.

• Dedicating stable resources to long-term analysis, which would support more frequent and in-depth publications on long-term fiscal challenges.

• Giving the Houses of the Oireachtas a stronger role in scrutinising and approving Ireland's medium-term fiscal plans.

Welcoming the report, Seamus Coffey, Chairperson of the Council, said:



“We welcome this independent Review. It finds that the Council punches above its weight, ranks among the best-performing fiscal councils in the OECD and has helped improve understanding of the public finances in Ireland. It also confirms what we have known for some time: our mandate has grown but our budget has not. That has reduced the size of our team and hit our long-term work. We hope that the Government passes the legislation soon and look forward to building on the Review's recommendations.”

 

[Sister Sara]

I have been critical on the IFAC and remain so.

Not because of anything in the OECD review, but because of what is not in the review.

On the positive side I would broadly agree with OECD analysis above. The IFAC does produce quality reports, makes sound fiscal recommendations and drives public discourse on fiscal policy. All of which is a contributor to a healthy democracy.

Where I diverge is the lack of focus in the review of the IFAC's actual impact on government policy. In my opinion, the IFAC has little to no impact and the OECD review is practically silent on this. The IFAC is instead used a political tool by government and opposition parties to hide behind, to attack, or quite often, to simply ignore. Depending on the political expediency at any given time for each political position.

If you visit the IFAC website it has this to say about other organisations 'like us'.

Ireland has two independent fiscal institutions. The other is the Parliamentary Budget Office (PBO). In contrast to the Council, the PBO is specifically focused on assisting the Houses of the Oireachtas and their Committees with analysis and advice on macroeconomic and fiscal developments and the financial implications of budgetary proposals. For more information on the PBO, see www.oireachtas.ie/pbo.


To that end, I would see little benefit in expending additional public expenditure on IFAC, rather, if its ability to engage media and public could be applied to the Parliamentary Budget Office then the IFAC could be disbanded.

As it stands, the PBO is not public-facing like the IFAC so the modest sum of €800,000 - €1,000,000 a year for a dozen or so (?) reports and statements a year is more than sufficient.

 

[Brendan Burgess]

Hi Sister

Surely your criticisms are criticisms of our political system? The politicians ignore the advice of IFAC - so you argue that IFAC should be abolished.

On that basis, we should abolish almost all economists as they nearly all point out the irresponsible financial management by the government.

I would take the very opposite view to you. The best economic management in Ireland was while the Troika was here. So appoint a small group of non-politicians - IFAC, Central Bank and ESRI - and they decide the financial management of the country.

So they tell the government - with the current tax regime, you can spend €x. If you want to spend more, you have to raise taxes. If you want to cut taxes, you have to cut expenditure.

We would have a much better government and society if we adopted such an approach.

 

[Sister Sara]

Hi Brendan,

The politicians ignore the IFAC if it is politically expedient for them to do so. The opposition will point to the IFAC to attack government if it politically expedient for them to do so, and government will hide behind what the IFAC says if what the council says chimes with a fiscal policy the presiding government wants to implement.

In the end it becomes nothing more than a political tool. That's not a criticism of the council, just a reality.

Putting IFAC, Central Bank, ESRI as deciders of financial management of the country is simply not viable. None of them, unlike the Troika members (IMF and ECB) have access to funding at set interest rates to provide borrowing in the event that it is needed.

It is debatable to say the best economic management in Ireland was the Troika, but accepting for the moment it was, the Troika 1) didn't actually want to be here, they would prefer if sovereign nations managed their own finances, 2) the Troika did not have to take consideration of the social fallout of fiscal decisions - that would fall on the political class.

Since the bailout program (following the global financial crisis) and the restoration of public finances to good health, traditional political parties have been fractured, in this country and FF/FG have been effectively partners in government for 10yrs (?) and the Labour party has become near irrelevance. The British have left the EU, 6 Prime Ministers in 10yrs. The rise of nationalism has emerged in US (MAGA) and in pockets across Europe, notably AfD, anti-euro, eurosceptic party has now emerged as the largest opposition in Germany.

As arguable as it may be that the Troika being the best financial managers, it is also arguable that the political fractures and shared social ills across Europe and America and elsewhere of housing affordability, increased homelessness, illegal migration, rise of nationalism, are the hangover of the impact of measures to restore public finances.

Thats not to say things may have been far worse, or that those social matters would not arise anyway - we have no real way of knowing, rather, if its political class that will take the fall-out from fiscal decisions made by IFAC,CB, ESRI in charge of public finances then its unlikely that the political class will ever cede authority to decide how public finances are spent.