Mr. Philip Crampton:

Economists, including in the Department, repeatedly use the term "fiscal space". From where do we get the money to build the extra infrastructure we need? What can the Government do? The European Commission should take a more realistic view of Irish unemployment figures when calculating the fiscal space. It erroneously considered the Irish economy to be overheating because the unemployment rate had dropped under the long-term average of 7%.

Locally, we know that 4.5% to 5% is full employment in the Irish economy. This should be taken into consideration, as it would remove a major constraint on capital investment.

The Commission methodology is getting rules changed in Europe, which is something for which we should all be lobbying, but the structural reform clause already exists. It could be used under the existing rules to release up to €1.3 billion of additional investment in one go. We understand that Italy and Lithuania have already used it. We recommend that the Department examine the structural reform clause. We do not need to change EU rules to use it.

As to whether we actually want to solve the problem, there are existing solutions that we are not exploring. I have referred to pursuing the EU for a relaxation of fiscal space constraints in terms of infrastructure, but there is also European Investment Bank, EIB, funding. We are in the lowest quartile for draw-down in that regard. We have had a low infrastructural uptake of the Juncker plan and are 13th in the EU. Irish public-private partnership, PPP, usage is low by historical and international comparisons. Procurement processes require updating because they have been a blockage. Thankfully, the Government contract that was introduced in 2007 was changed in 2014 or 2015. There is a medium-term strategy for procurement and other types of building contract. We would like to work with all Departments on that. We have made a submission to the relevant ones on the strategy. Capital receipts, such as proceeds from the national lottery for the children's hospital and so forth, can also be used to solve our funding deficit.

The last slide sets out our main recommendations, which the president and I have covered. We recommend that Exchequer investment in public infrastructure increase to at least 4% of GDP, the Government should secure a recalculation by the EU of the fiscal space, public procurement process modernisation should be adequately resourced, there should be a mid-term review of the capital plan and there should be greater transparency of upcoming projects. Interestingly, the UK has released a £500 billion construction infrastructure pipeline that outlines in detail the projects that will be delivered up to 2020 and 2021. We have nothing of the sort. Perhaps we should reconsider publishing our public capital programme, which we used to do every year.

The Department of Public Expenditure and Reform should investigate the scope of a rainy day fund and structural reform clause. Introducing a rainy day fund is a good idea, but perhaps it should be done a little later once we have our infrastructure up and running. We could use some of that funding in the meantime to invest. We strongly recommend that the construction sector group, which involved all stakeholders, should be reactivated to monitor and address the industry capacity issues. Doing this would ensure that, if we were to increase investment, we would have the capacity to deliver on same.

This has been a synopsis of a long submission. I am sorry for taking up so much of the committee's time.