Dáil debates

Thursday, 1 October 2015

Ceisteanna - Questions - Priority Questions

Capital Investment Plan

9:35 am

Photo of Michael ColreavyMichael Colreavy (Sligo-North Leitrim, Sinn Fein)
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2. To ask the Minister for Public Expenditure and Reform when the capital review will be published, given that it was announced in the spring statement that it would be published in June 2015; and if he will make a statement on the matter. [33643/15]

Photo of Michael ColreavyMichael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I am deputising for Deputy McDonald, who is attending today's meeting of the Committee of Public Accounts. I will try to fill her shoes. Our first priority question, which asks when the capital plan will be published, has been overtaken somewhat by events. It is not surprising that Deputy McDonald tabled this question because it had been expected that the plan would be published in June, but the Government kept moving the date back. The Deputy hoped that by tabling this question, the publication of the plan might be accelerated. I would like to ask the Minister a couple of questions about the plan. We welcome some parts of it, especially some of the projects mentioned in it. I would like to be parochial and mention the Cloonamahon Road, which is a death trap. It is great that this project is included in the plan because the work on that road will save lives. To what extent are the commitments or promises made in this plan predicated on economic well-being and EU instructions?

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I suppose the Deputy could claim that the question tabled by his colleague was the catalyst for making sure all of this was done. If he makes such a claim, I will not deny it publicly. As he is aware, I launched the public capital investment programme, Building on Recovery, earlier this week. It sets out the Government's commitment to a €27 billion six-year capital plan. This investment will increase the State's infrastructure, support economic recovery and jobs and support sustainable communities throughout the country. When we include investment from the wider semi-State sector and from public private partnerships, as outlined in the plan, it is clear that total State-led investment will amount to €42 billion over the period covered by the plan. The capital investment plan has been carefully designed to meet the needs of a growing economy, to improve the delivery of services to communities and to maximise the benefit of support by providing Exchequer investment throughout the country.  It builds on the recovery and addresses emerging pressures, especially on transport networks. It supports the regions, provides social infrastructure to enhance quality of life and is responsive to environmental challenges.

  The provision of jobs has been the Government's top priority from day one. This €27 billion plan will sustain 45,000 jobs. I will give a rough outline of the distribution of the money. Some €4 billion will be spent in education, €4 billion will be spent in the area of the environment, €3 billion will be spent in health, €3 billion will be spent in promoting enterprise and jobs, €1.25 billion will be spent in agriculture and €1 billion will be spent in justice. In order to grow businesses, we are also allocating a special envelope to support transport, amounting to €10 billion over seven years to fund public transport and roads. My colleague, the Minister for Transport, Tourism and Sport, Deputy Donohoe, has outlined the flagship project, which is the new metro scheme for Dublin.  However, I emphasise that this is a national scheme. I know the Deputy will be particularly interested in rural broadband, the rural development programme, the new village renewal programme and all the other supports that are laid out. I will be very happy to go through them in detail if he wishes.

Photo of Michael ColreavyMichael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I would certainly welcome many of the projects that are listed in the plan. I have worked out that over the six-year period covered by this plan, Ireland will continue to have one of the lowest levels of capital spending of any country in Europe. This overall figure includes public private partnerships. I would argue that such partnerships are a very inefficient way of doing business because it costs more to borrow the money and investors and shareholders have to be paid out of it. I think it is far better to provide for public investment in public services because a return can be got from it. The Minister has not answered my question about the extent to which this is predicated on the economy doing well. Could this Government or any future Government decide not to proceed with certain projects in this plan if the economy is not doing as well as expected? Is it anticipated or possible that the EU could direct us to have less ambitious capital plans - if one wants to use the word "ambitious" in this context - that differ from those announced in the report?

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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The total sum involved in the plan is €42 billion, of which €27 billion will be directly allocated by the State from Exchequer funding. Semi-States such as the ESB will spend money on energy development. Ervia and Irish Water will spend €4 billion. Just €500 million of the €42 billion in question will involve additional public private partnerships. I am mindful of what the Deputy has said about such partnerships. I agree that we must get value for money and I have set up a new regime to ensure that we do get it. We are vigorous in ensuring that is the case. When we had no money at all following the collapse of the economy, we were seeking any resources we could get. For example, we sought funding from the European Investment Bank. Public private partnerships were an option at that time, but they will be less of an option into the future. It is clear in the plan that I have set an annual cap of 10% on the total capital expenditure to be used to pay back all public private partnerships. I refer to the unitary payments we have agreed, including the site preparation payments, etc. There is a cap on what we will use for these purposes. I will answer the Deputy's final question when I come back in.

Photo of Michael ColreavyMichael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I still have not received an answer to my question about what the Government's plan is predicated on. A friend of mine from Sligo rang me the night the plan was published.

He stated it was an awful pity that an election is not held every year because the economy seems to improve in the run-in to elections. In any case, it may be that he was being slightly cynical.

9:45 am

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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The Fianna Fáil Party may not agree.

Photo of Michael ColreavyMichael Colreavy (Sligo-North Leitrim, Sinn Fein)
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May I assume, given the link made between the proposed capital projects and the creation of 45,000 jobs, that contracts valued at more than €1 million will include a social clause, meaning the Government will seek to have people who are unemployed taken off the live register to work on them? From where does the figure of 45,000 jobs come? Will these jobs be in Ireland for Irish people paying Irish taxes and will the companies involved pay taxes here?

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Since all the projects will be in Ireland, the workers must be physically in this country to do the work. On the figure of 45,000 jobs, there is a rule of thumb for determining the number of jobs to be created per €1 million investment. The 45,000 figure refers only to the direct investment of €27 billion by the State rather than total investment which will be a much larger figure.

The Deputy asked whether the plan could be threatened in future. If a different Government were in place and it did not have the level of stability and focus on jobs that this Government had in recent years, if it failed to deliver the growth rates we have delivered or if that growth were threatened, we could be faced with what we had to deal with in 2011 when the capital plan was eviscerated because the income of the State and its capacity to fund the plan collapsed. I hope that will not happen.