State sticking to €4.1bn capital spending plan
The Government has reiterated its commitment to an additional €4.1 billion in capital spending between 2018 and 2021.
The extra money announced in the Government’s mid-term review of its capital plan, published yesterday, had already been flagged in Budget 2017 and the spring economic statement, and does not represent any new allocation.
The latest review is seen as a precursor to a new 10-year national investment plan, which is expected before the end of the year. Since the Government’s capital plan was first announced back in 2015, approximately €6 billion has been added to the original €20.9 billion capital budget, against a backdrop of infrastructural bottlenecks in housing, water, health and education.
Earmarked for housing
Some €2 billion of this additional spend has already been earmarked for housing projects while the residual €4 billion will go to address other infrastructural deficits.
Launched by Minister for Finance Paschal Donohoe, the review noted that the context for public capital investment had “changed dramatically” in the relatively short period since the Capital Plan – Building on Recovery was published in 2015. “The significant progress made in restoring the public finances and the transformation in economic performance has enabled Government to supplement the €20.9 billion already committed to public investment between 2018 and 2021 by a further €6 billion,” it said.
“Taking account of the significant resources of €2.2 billion which has been provided to support the delivery of the action plan for housing over the period, €4.1 billion in additional capital expenditure is to be allocated on the basis of this review in Estimates 2018.”
Fergal O’Brien, director of policy at Ibec, said while the review did not announce any additional money it recommitted the Government to bolstering its capital plan, which was positive. He said Ibec hoped to see extra money in next month’s budget and/or in the 10-year plan as Ireland still lagged behind competitor countries for capital spending.
Mr O’Brien said the additional €4.1 billion would bring Ireland’s capital spend to about 2.5 per cent of gross domestic product (GDP), but he said it needed to be about 4 per cent if infrastructural deficits were to be addressed.
The review said the planned total increase in public capital investment was now almost 40 per cent greater than initially envisaged.