Irish Budget to increase capital investment
Minister for Public Expenditure and Reform Michael McGrath announced: "Ensuring the provision of the necessary funding to support our citizens and key public services over the next phase of the Covid-19 pandemic will be the key priority in Budget 2021. While directing resources to these areas, we will also ensure that existing services are preserved and that the increases in capital investment set out in the National Development Plan (NDP) are implemented in order to support the recovery in the economy. This would see core gross voted capital expenditure of €9.1bn next year."
Ahead of the publication of Budget 2021 on 13 October, both the Construction Industry Federation (CIF) and Ibec have made Budget submissions calling for a multi-billion ramp-up in infrastructure investment backed by public, private and EU financing sources.
Following a meeting with Minister McGrath this week, CIF said an additional €15bn over the next six years into infrastructure and housing is essential to overcome Covid-19’s impact in the short-term and solve the housing and climate change crises in the longer-term.
CIF’s submission contains an economic impact assessment of the construction industry on the wider economy by EY, which shows a €15bn stimulus package would generate an additional €27bn in output.
The submission recommends that the government needs to “avail of measures included in the European Recovery Plan for funding of large-scale projects contained in the NDP through a range of models including joint venture and PPPs”.
Ibec’s submission states over the medium-term, a more comprehensive review of the NDP is crucial in the context of broader developments. This review should focus on an ‘NDP plus’ model with new schemes in addition to the existing NDP. The business membership organisation’s view is that there should be an increase in the NDP budget by €25bn over the lifetime of the plan supported through Exchequer, private and international financing sources.
Ibec also recommends unlocking non-Exchequer investment in infrastructure provision to encourage business investment.
CIF’s submission is available here.
Ibec’s submission is available here..