Dáil debates

Tuesday, 24 April 2012

2:00 pm

Photo of Clare DalyClare Daly (Dublin North, Socialist Party)
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Question 109: To ask the Minister for Public Expenditure and Reform his views on whether an emergency programme of necessary public works could put 100,000 persons to work on necessary infrastructure development within 2012. [11608/12]

Photo of Brendan HowlinBrendan Howlin (Minister, Department of Public Expenditure and Reform; Wexford, Labour)
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Before this question can be considered, it is necessary to point out that the sort of capital works programme required to create 100,000 new construction jobs in a given year would require a minimum of €10 billion in expenditure on top of existing allocations, and such funding is just not available. While some of this may be recoverable in the form of tax receipts and reduced welfare costs, very significant costs to the Exchequer would remain. This would require us to reduce dramatically expenditure on the current side and institute additional taxes on a scale significantly above those already imposed.

The quantum of pain to ordinary people that this would involve would be extreme. Moreover, this approach ignores the significant improvements in our infrastructure that have been made to date, as attested to by the OECD. It is worth noting that, over the past decade, some €70 billion was invested in infrastructure and the productive sector. Judged by a range of measures, the quality and quantity of the country's stock of infrastructure has been considerably augmented in recent years.

Even were additional funding available, it is questionable whether such an approach would be feasible or the most effective means of creating new employment. Capital planning must be undertaken with meticulous attention to detail to ensure that the infrastructure being proposed meets a genuine social or economic demand that cannot be adequately met by the private sector and that, if the infrastructure is necessary, the project approach that provides the best outcomes, value for money and optimum return to the State is undertaken.

In regard to job creation, it is important to note that much of the capital programme for the next five years as laid out in the infrastructure and capital investment programme will be geared towards smaller, more labour-intensive projects. However, it is not necessarily the case that capital works programmes would provide the optimal job-creation approach. Infrastructure best serves the economy by aiding economic growth and generating sustainable jobs in the medium term, rather than by providing short-term employment in its construction phase.

Additional information not given on the floor of the House.

Capital investment in enterprise supports has the highest direct employment impact. Accordingly, the capital review undertaken last year made a point of protecting supports to the enterprise sector primarily through agencies such as Enterprise Ireland and the IDA. The unprecedented level of investment over the past few years and in 2012 delivered through the enterprise development agencies can foster sustainable and valuable employment in the exporting sectors of the economy which will be critical to recovery. While the overall capital envelope for 2012 has been reduced, we have held the level of capital allocation for the enterprise sector relative to the preceding period.

Photo of Clare DalyClare Daly (Dublin North, Socialist Party)
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The Minister has given his answer to his colleagues in SIPTU who, precisely, are looking for a €10 billion investment programme in infrastructure in order to call for a "Yes" vote in the austerity treaty. I think the answer to the question is that it is possible. Such an investment of €10 billion would create-----

Photo of Brendan HowlinBrendan Howlin (Minister, Department of Public Expenditure and Reform; Wexford, Labour)
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I think the Deputy is supposed to ask a question rather than answer one.

Photo of Clare DalyClare Daly (Dublin North, Socialist Party)
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-----100,000 jobs in this sphere. The Minister seems to have mistaken "infrastructure" to mean solely construction projects even though the question did not ask that. It dealt with all aspects of infrastructure that could deal with the programme which is seriously necessary and which the Minister's colleague, the Minister for Social Protection, Deputy Burton, said will be delivered in terms of child care infrastructure and so on.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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Will you frame a question please?

Photo of Clare DalyClare Daly (Dublin North, Socialist Party)
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I would like the Minister to deal with that aspect and why he thought the question just related to construction when it did not and how he sees this fitting in with the treaty discussions.

Photo of Brendan HowlinBrendan Howlin (Minister, Department of Public Expenditure and Reform; Wexford, Labour)
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The Deputy is quite wrong if she interpreted it as a rejection of the SIPTU line in regard to economic stimulus and not infrastructural spend. Its demand was for economic stimulus. I have met the presidents of SIPTU and the Irish Congress of Trade Unions on this matter.

Can I say very emphatically that Government policy has three strands? Certainly, we need to have a balanced budget by working towards a 3% deficit by 2015 as laid out in the Stability and Growth Pact. Equally, we recognise there is a need for a stimulus package and we have been working on ways to do that. It is important that a third of the proceeds of the sale of State assets will be involved in infrastructure and stimulus. At the instigation of the trade union movement, we have been engaged with the pension funds because we want to ensure more of the pension funds, which ordinary workers pay into, are expended in this economy. I have had direct discussions with the European Investment Bank and other international lenders. I have met with the vice president of the European Investment Bank and I have more meetings coming up.

I say all of this to give the Deputy the absolute assurance that we regard stimulus as a very important co-strategy to ensure we meet the targets of economic recovery we have laid out.

Photo of Clare DalyClare Daly (Dublin North, Socialist Party)
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Sadly, the reality is the opposite. The Minister is presiding over an economy that is in a depression and he has not delivered any stimulus whatsoever.

Photo of Brendan HowlinBrendan Howlin (Minister, Department of Public Expenditure and Reform; Wexford, Labour)
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Do not will us to fail.

Photo of Clare DalyClare Daly (Dublin North, Socialist Party)
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The reality is that circumstances and resources exist in this country and necessary work and materials are in place which could, for example, deal with the archaic water mains infrastructure which could put tens of thousands of people to work repairing that network. In regard to the septic tank debacle, does the Minister think householders are going to solve that crisis on their own? It is a civil engineering matter. I mention areas in my constituency and Wavin pipes. The materials are there as are the workers but this Government has failed to match the two. Clearly, it is quite happy to preside over 0.5 million people on the dole.

Photo of Brendan HowlinBrendan Howlin (Minister, Department of Public Expenditure and Reform; Wexford, Labour)
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I know the Deputy prefers to make speeches than ask questions even at Question Time. There are Deputies in this House who wish us to fail, which is shocking.

Photo of Finian McGrathFinian McGrath (Dublin North Central, Independent)
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That is rubbish.

Photo of Brendan HowlinBrendan Howlin (Minister, Department of Public Expenditure and Reform; Wexford, Labour)
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The constant down talking of our economy is not without its own consequence. We were bequeathed the most disastrous economic hand ever left to a Government. We have set out a strategy to get us to recovery. I have said to the Deputy that it cannot be done by balancing the budget alone, although that is an integral part which she has entirely ignored. We cannot continue to borrow €1.4 billion per month. There is only one borrower and it set out conditions on the terms of borrowing. The Deputy knows that because she is fully briefed in regard to these matters, but she wants to pretend life is otherwise.

However, the Deputy is right to the extent that we need stimulation of the economy as well, although not with magic money but with real money and that is why we have identified the National Pensions Reserve Fund and the pension funds which, hopefully, we can persuade or encourage to invest in this economy. We have established NewERA and the strategic investment fund as a precursor of a State investment bank. We are very much on the stimulus agenda and we will succeed in getting this economy right.