Brendan Howlin (Wexford, Labour) | Oireachtas source

I am glad to have the opportunity to outline to the House the capital investment framework, Building on Recovery, which represents an Exchequer spend of €27 billion over the next six years. The longer six-year timeframe for the plan will facilitate the delivery of a greater number of projects and programmes. Key investments will be made in transport, education, health and enterprise, including a new metro link between the city centre and Dublin Airport and Swords, a number of new road projects, a renewed and increased commitment to flood risk management, the relocation of both Dublin maternity hospitals as well as Limerick Regional Maternity Hospital, construction of the national children's hospital, installation of wireless networks in all schools, the removal of remaining prefabs at schools and investment in the enterprise regional building programme. In every part of the country, these investments will boost our competitiveness, create jobs and upgrade our social infrastructure. If we add investment from the wider semi-state sector and off-balance-sheet mechanisms such as public private partnerships, total State investment will amount to €42 billion in new and existing infrastructure over the period, which is an average of 3.5% of GNP per annum.

The House will recall that the capital plan announced in 2011 contained necessary reductions in expenditure which reflected the fiscal position we were then in. As recent Exchequer figures have shown, those difficult but necessary decisions are beginning to pay off. Of the €42 billion worth of investment set out in the new programme, €27 billion will be invested through direct Exchequer spending. This represents a significant increase of some €10 billion over the previous five-year plan. Decisions to allocate Exchequer funding were made following a lengthy review process, which included input from stakeholders at the national economic dialogue which we began this year. The dialogue process was a most worthy discussion over two days. The analysis identified capacity constraints, infrastructural bottlenecks and areas where demand pressures were building. It informed the investment decisions contained in this framework to direct funding where it is most needed while maximising the economic and social return to the taxpayer. The investment framework marks the beginning of a return to normal levels of investment.

In order to sustain growth, we must invest, but we must also do so in the right way. We will make affordable, sustainable investments that boost the productive capacity of the economy, improve public services and lay the foundations for future growth. It is intended to have a mid-term review of the plan, which will allow for a refreshing of the priorities and allocations, if appropriate, within the updated fiscal context at the time. The plan is not a departure from the prudent management of the public finances that has been the hallmark of this Government. Rather, it is an affirmation of that approach. The fiscal rules enshrined in both national and European law ensure that increases in expenditure reflect the underlying strength of our economy.  Building on Recovery is entirely consistent with this approach.

There is no doubt that the economy is now in a sustained recovery. All the data so far this year have been encouraging. Consumer spending has been strong in 2015, with retail sales up by almost 10% year on year in July. Car sales were up by almost 7% over the same period. Investment is also growing, with both building construction and machinery and equipment spending on a rising path. Recovery in the construction sector continued in July, with the purchasing managers' index for the sector recording its 23rd successive month of growth. In fact, with the inclusion of the August figure, there have been 24 consecutive months of growth. These encouraging macroeconomic data are mirrored in total taxation receipts, which are up 9.8% to August, year on year. The Department of Finance published its macroeconomic forecasts in April, in which GDP was expected to expand by 4% in 2015 and 3.8% in 2016. As can be seen from recent independent forecasts, the Department's forecasts may be a little behind the curve right now, and I expect they will be updated in the Budget Statement next Tuesday.

Investment decisions must take account of future needs as well as meeting current demands.  Demand for extra funding and investment is high, but decisions about how and where we spend our resources are not taken lightly. I have introduced a requirement that all capital programmes and projects with a value greater than €100 million will require Government approval prior to commencement. Further, and in line with long-standing practice, all projects and programmes to be delivered under this Exchequer capital investment framework are subject to the provisions of the public spending code, including the provisions in relation to the need for appraisal and value for money. Projects are also subject, of course, to planning guidelines and requirements, including environmental impacts assessments as appropriate.

The new capital programme supports the Government's number one priority, which is getting people back to work. An estimated 45,000 construction jobs will be directly supported as a result of the Exchequer plan. The Government has also committed to spending €3 billion to support business and innovation through our enterprise agencies over the duration of the plan. The IDA, Enterprise Ireland and Science Foundation Ireland support 320,000 jobs in this country. We will continue to support these agencies by providing funding for grants, equity investments and innovation supports.

In order to grow, businesses need fast, efficient transport networks. In the decade up to 2008, Ireland addressed many of the infrastructural deficits that had been constraining growth. I acknowledge that large-scale investments were made in our road network, public transport links and airports. As Europe's fastest-growing and most dynamic economy today, it is essential that we preserve our competitiveness by building on those investments. In recognition of the fact that large transport projects have long lead-in times, the Government will provide a seven-year capital envelope to the Department of Transport, Tourism and Sport. A total of €10 billion will be available to the Department over the period. By 2022, we will have doubled the level of annual investment in the transport area to €2 billion per annum. The largest single project will be a new metro and light rail link in Dublin. Based on the outcome of the recent Fingal and north Dublin transport study, the National Transport Authority has recommended that a revised metro project be selected as the appropriate public transport project to address the transport needs of the Swords and Dublin Airport to city centre corridor. The plan is to have a metro link in operation by 2026 to 2027 along a route for which travel demand is forecast to grow by almost 40% by 2033 and where the current and potential future levels of car dependency are unsustainable.

The proportion of our citizens aged over 65 is, thankfully, increasing, which poses challenges to our health care system. To meet these challenges, there will be a large-scale investment in health care facilities for the duration of the plan. By 2021, €600 million will be spent annually to upgrade our hospitals, residential homes and health infrastructure.

This level of funding restores capital expenditure in health to its previous peak.

The capital framework provides funding for the relocation of the Dublin maternity hospitals, which we announced, and Limerick maternity hospital. Under the plan, an additional €300 million will be invested in upgrading residential facilities around the country to meet Health Information and Quality Authority, HIQA, standards. These facilities will not only provide an excellent standard of care and recovery, but also ease the pressure on hospitals and improve efficiencies across the system.

Our young and growing population will allow us to sustain our recovery over the next decade and beyond, but we must ensure that public infrastructure is in place to support young families. Nowhere is this more evident than in education. Between 2012 and 2014, which were the most difficult of times, the Government built more than 84 new schools and 55 large-scale school extensions. The capital investment framework continues that commitment. We will spend more than €3 billion in the next six years investing in our children's future by building new schools and upgrading existing ones. These new and upgraded buildings will be fit for the 21st century. The capital plan provides €400 million for the installation of wireless networks in all schools, investment in IT hardware and a programme to replace the remaining prefabs in schools. Many of the record number of pupils due to complete school in the coming years will inevitably attend college. We must plan and invest for this as well. A total of €350 million will be invested in third level infrastructure, including a new €200 million public-private partnership, PPP, investment in the institutes of technology sector.

As the House will know, An Garda Síochána is embarked on a programme of substantial reform. A critical priority for the Government is to support this process of reform through increased expenditure on Garda information technology. We want to remove any impediment to the development of a modern, state-of-the-art police force. To support that goal in the six years to come, we will invest more than €330 million in Garda ICT systems and technologies and €46 million on new and upgraded Garda vehicles.

The Government is committed to ensuring that our economic infrastructure is available in all regions. Investment in ICT is critical to our national economy. Recently, the Department of Communications, Energy and Natural Resources agreed the national broadband strategy. The plan will utilise significant private sector investment and be supported by investment from the Exchequer. It will ensure that every business and household has access to high-speed broadband to help connect communities, spread growth and support local business.

Given the pressing need to recommence a house building programme to meet urgent housing needs, additional allocations to support social housing were announced as part of last year's budget. Through direct Exchequer spending and local government investment, approximately €3 billion will be provided for the social housing strategy. The Government remains committed to using every available source of funding to address the shortage of social and affordable housing.

The Government is also aware that we have obligations to behave responsibly not only in respect of fiscal sustainability, which we have proven, but also in terms of environmental sustainability. We need to protect and maintain our environment and habitats not just for today, but for future generations. We cannot ignore the impact of climate change and, as a country, we have a responsibility to play our part in reducing reliance on fossil fuels. We also have legally binding renewable energy targets and €444 million will be spent on energy efficiency and renewable energy programmes during the period of the capital plan. However, the effects of climate change are already visible in towns and villages across Ireland. To protect vulnerable communities, the Government has prioritised the introduction of a new flood risk management programme. By 2021, spending on this programme will have reached €100 million per annum.

As we approach the centenary of the 1916 Rising, it is appropriate that we complete all planned works on our important heritage sites and provide additional funding for commemoration projects. Under the capital framework, an additional €31 million will be provided next year for these works.

A new PPP programme valued at €500 million will be developed in the justice, education and health sectors. This programme will build on recent successes, utilise the significant level of expertise that we have developed in this area and leverage Ireland's positive position among national and international investors. To coincide with this PPP programme, the Government will introduce a PPP investment policy framework. The framework will limit expenditure on PPPs to a stated percentage of annual capital spending and provide transparency and clarity to ensure that the long-term interests of the taxpayer are protected.

The Government will provide a responsible, affordable and sustainable way forward. By working together, State and industry will deliver modern, strategic infrastructure that will build on the economic recovery and allow it to continue. I thank the House for its attention.

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