SIPTU backs IBEC call for maximum investment in strategic infrastructure

SIPTU has backed a call by the employers’ organisation, IBEC, for the maximum use by the Government of the available funds for investment in strategic infrastructure. SIPTU economist, Marie Sherlock, said: “In its pre-budget submission IBEC has called for the Government to fully exploit the fiscal space available for investment and to abandon plans for a so-called ‘rainy day fund’.“While we fundamentally disagree on its tax reform proposals that IBEC has added its voice to that of the trade union movement and others who are calling for major investment by the Government in our strategic infrastructure is to be welcomed.“The great irony for Budget 2018 is that there are more resources available to spend, while still driving down the deficit and remaining compliant with the EU fiscal rules, than the Government is willing to permit. It shows up the inconsistency of the Government position of complaining about the restrictive nature of the EU fiscal rules, yet, when it is essentially gifted additional space for investment it seeks to ignore it.”She added: “Despite welcome increases to the capital budget for 2018 to 2021, the public investment rate in Ireland is projected to be just 2.7% of GDP by 2021. This is just over half of the level necessary and the depreciation of our capital stock is set to reach unprecedented levels due to the failure to reinvest. Perhaps most worryingly, Irish residential construction is growing at half the rate which is necessary. “SIPTU has called on the Government to use the available resources for greater capital investment so as to expand the productive capacity of the Irish economy. If we fail to adequately invest now at a time when resources are available, then we risk exacerbating any downturn in future years.“It is also about securing the fiscal stability of the Irish economy. The hoarding of €500 million in a ‘rainy day fund’ in a period of almost zero deposit rates alongside the paydown of existing debt represents a very poor return compared to the economic benefits which could be generated by capital investment.”