Party leaders will have to prepare a statement of their expenditure and have it audited before submitting it, with the auditor's report, to the Public Offices Commission, the Minister for Finance, Mr McCreevy told the Dail.
The auditor who examined the Party Leader's Allowance statement must not be an employee of any State institution, Mr McCreevy said during the second reading of the Oireachtas (Ministerial and Parliamentary Offices) (Amendment) Bill, 2001.
Currently the propriety of "this particular public expenditure" was self-policed and it was appropriate that normal audit procedures be put in place to correct this.
"Its sanction for non-compliance is simple: fail to deliver and the cash-flow dries up until you do," he said.
The commission's report would be laid before the Oireachtas and a copy of the party leader's statement and auditor's report would be freely accessible to the public for three years.
The Fine Gael spokesman on finance, Mr Jim Mitchell, welcomed the Bill. When the Dail resumed in October, he hoped the Oireachtas commission legislation would contain radical proposals for a complete overhaul of "the operations of this House".
In the past three or four weeks, said Mr Mitchell, a broad range of legislation had been passed "without even the most scant" scrutiny. In the past, guillotine motions were a rarity whereas now they were a "regular feature of the Order of Business", on the basis of prior arrangement between party whips. This was unacceptable, he said. He welcomed the Minister's proposal in the Bill to provide secretarial assistants for former Taoisigh but took issue with Mr McCreevy's proposal to increase the personal allowances of "Independents" from £15,000 to £22,000 pounds. "They are not required as party leaders, and I assume in this case that Deputy Joe Higgins is a party leader, to account for that allowance."
They could spend it as they wished, said Mr Mitchell. That was fundamentally wrong.
The Labour Party spokesman on finance, Mr Derek McDowell, also welcomed the Bill, with qualifications. Significantly, it increased considerably the allowances paid to party leaders and also set in place auditing procedures.
These increases, together with the increases to political parties made under the Electoral Bill, "go a long way towards instituting genuine State funding of political politics in Ireland".