David Cullinane (Waterford, Sinn Fein) | Oireachtas source

Everybody agrees we have very low levels of capital spend. That is just a fact. In European Union terms it is very low. That is because capital spending was the easy cut when cuts had to be made. If we are going to call for increased spending in capital we have a responsibility to say where the money will come from. If we are going to increase capital spend, how much will it be in monetary terms? Will it be from increased revenue or current expenditure? When the Construction Industry Federation says investment in public infrastructure should be 4% of GDP, is that essentially a way out so it does not have to say where the money will come from? If it is the case that the money should come from existing taxation and expenditure, that is existing revenue, and it is just 4% of GDP. That means the Construction Industry Federation is not looking for any increased revenue which means something has to be sacrificed. What is it that should be sacrificed?

GDP as an indicator of economic activity has been somewhat discredited. We now have GDI and all sorts of other indicators. When the Construction Industry Federation says 4% of GDP, is that really the best way to be planning investment? GDP can fluctuate widely in this State for all sorts of different reasons, so why was it picked as the percentage of spend?

The witnesses talk about a central database of capital projects, which is obviously very sensible, but the Departments have that anyway. Departments have a full database of what capital expenditure is needed across all of their areas. They make a pitch every year and get an allocation. I assume it is already there but the witnesses are talking about it being more publicly known. A cross-departmental committee was also mentioned. In terms of making decisions about where the capital spend should be, has any consideration been given to how that should fit in with the national planning framework because it would be crucial? The Minister, Deputy Coveney, is saying that we need to build up regional cities. If we take the south east as an example - I am sure the Chairman will agree - Waterford is the regional city of the south east. If the Construction Industry Federation is going to look at directing capital investment, it should be into those areas. Has it looked at that in policy terms? If that is where it is going, where should we prioritise? How do we link prioritising capital spending with policy in terms of the national planning framework? Has the Construction Industry Federation made a submission to the national planning framework in the context of capital spending?

My final question is to almost all the witnesses because it is something we can somewhat agree on, which is the inflexibility of the fiscal rules on capital spend. Is it something on which the Construction Industry Federation has lobbied Government? Specifically what has it lobbied Government on? The witnesses spoke about the structural reform clause and the investment clause. IBEC has called for capital investment to be classed as separate when it comes to the calculation of spend in terms of the fiscal space. That would require a change in European policies. What proposals in policy terms has the Construction Industry Federation made on the application of the fiscal rules on capital spend?