Pearse Doherty (Donegal, Sinn Fein)
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35. To ask the Minister for Public Expenditure and Reform if he will use budget 2018 to address the State’s need for infrastructure investment; and if he will make a statement on the matter. [40547/17]

Pearse Doherty (Donegal, Sinn Fein)
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This question follows on from the same line of questioning of my colleague, Deputy Calleary. It relates to the capital plan. As opposed to the review in the sectors under most pressure and where capital will be allocated, is the Minister of the view that he will increase the overall envelope in terms of capital more than what has already been outlined in the review using the resources that are available in this year's budget, particularly in view of the fact that capital can be smoothed over a four-year period?

Paschal Donohoe (Dublin Central, Fine Gael)
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I will not read out to Deputy Doherty the answer I have just shared with Deputy Calleary. I will just answer the specific question the former has put to me. I have already identified that we will seek to make a further €500 million available in 2019, 2020 and 2021 as part of the summer economic statement. This will take the additional amount of new capital we will be allocating across that period to more than €4 billion. The total amount of capital funding that will be available between 2018 and 2021 will be approximately €26.8 billion. At the end of this programme we will be increasing gross voted capital by nearly 85% more than where we stood in 2016. For those reasons I am not currently planning to increase the level of additional public capital expenditure that will go into those figures because I believe a near doubling of the level of public capital expenditure across those years is a very strong increase and because my judgment is that if we were to look to increase it further beyond that pace, we could get into difficulties regarding value for money and making sure we have the right amount of capacity in the economy to translate those levels of expenditure into the schools, roads, bridges and primary care centres we want to make happen. For these reasons, I am not at present planning a further change in that capital expenditure figure beyond that which I decided in the summer economic statement.

Pearse Doherty (Donegal, Sinn Fein)
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I recognise that there is to be an increased level of capital expenditure over the next number of years. This will represent an increase from the lowest level in Europe, which is the baseline from which we are working. When one is at the lowest level in Europe, it is easier to get 60% or 70% increases because one is starting from a very low base. Nonetheless, there is an increase and it will ramp up as we get closer to 2020-21. The problem is that we have at this point in time serious crises, as everyone in this Chamber knows, which require capital investment. For individuals who are either on housing waiting lists or in emergency accommodation, 2020 or 2021 does not mean much to them; they need investment now. I would argue - and I make this point to the Minister in advance of the budget - that smoothing rules are available. For example, for every euro the Government cuts in taxes, it could increase capital investment this year by €4. For every €200 million the Government gives in tax cuts, it could invest €800 million in capital that would be smoothed out over a four-year period in respect of housing. We are in the middle of an almighty crisis. As legislators, we do not have the luxury of saying we will reach the mid-term or the higher end of capital investment in four or five years' time after coming through a decade of drought, of underinvestment in capital that was a result of Government decisions and budgetary decisions. We can argue why those decisions, taken by both Fianna Fáil and Fine Gael, were taken and for what effect, but they resulted in the crises we now have. We must take decisions now and then, and I acknowledge that we are increasing investment in public housing, but it is not enough. It does not meet the scale of the crisis we have out there.

Paschal Donohoe (Dublin Central, Fine Gael)
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When I use a word or phrase such as "infrastructure", I always accompany it with an acknowledgement that we are talking about homes, schools and the overhaul of facilities that in many cases do not meet the needs of our citizens. I am crystal clear that behind technical phrases such as "public capital expenditure" and "where we are as a percentage of national income" is the reality that we have families who need homes and investment that needs to be made in many parts of our country. That is the reason we are making the increase in capital expenditure the Deputy has acknowledged. He can make the case that we should increase it more, as indeed he is doing, and it is obviously a legitimate case to make. My view is that we can reach a point at which we can deliver more things more quickly if those parts of the economy upon which we depend to build homes - and we will begin to build even more homes ourselves directly, as the Minister, Deputy Eoghan Murphy, has acknowledged - have confidence that the levels of expenditure I am outlining can be consistently held for a number of years. That will give companies, local authorities and banks, as well as other sources of investment, confidence that in the future money will be available for which they can plan. That is what we are looking to do. As for the approaching budget, while I still have a lot of work to do dealing with spending Departments regarding deciding what the budget will look like, I expect that the percentage increase in capital expenditure that will be seen at the end of this budget will be significantly ahead of the increase in current expenditure. The reason for that will be the desire to respond next year to the many difficulties I know people have.

Pearse Doherty (Donegal, Sinn Fein)
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We can talk about where we are, about the fact that we are at the lowest level in Europe and about getting to the midpoint or the higher midpoint, but the Minister must recognise that our capital investment was €10 billion and fell to €4 billion. There was a massive withdrawal of investment here. That is why we have a housing crisis, why our roads are now under pressure, why our rail is under pressure, why we do not have adequate broadband, why our flood defences in our communities are flooding and people are being put out of their houses and so on. Next year the Government intends to spend €70 million on flood defences. By 2021 the figure will be €100 million. It is completely inadequate. I know the Minister must balance all the needs in the budget. He has heard my articulation of the argument. I do not believe there is a need for the type of net tax cuts he proposes but I genuinely believe, as politicians, we have a responsibility - not a responsibility to chase votes but to act in the best interests of our citizens. We know about, we will all talk about and we will all sympathise with the fact that there are 3,000 children going to bed tonight in emergency accommodation. We have within our gift to ramp up delivery of social housing by using the resources this State has made available to us as politicians to decide where they should go. The European Union's rules have allowed that for every tax cut, every euro that is cut in tax, the Government can spend four times that much this year on social housing. I plead to the Minister and beg him to consider, even at this late stage, increasing capital investment out of the fiscal space available in this year.

Paschal Donohoe (Dublin Central, Fine Gael)
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I am acting in the best interests of citizens. What always motivates me, as I am sure is the case with the Deputy, is what the long-term best thing is for our country. The only reason I put the kind of focus I do on economic indicators such as where we are with bond yields, interest rates and so on is to give our country the chance to try to create the resources to deal with the kind of difficulty I know our citizens face because I represent them, just as does the Deputy Doherty. While he is correct to make the point that capital expenditure decreased for many years, I will make two points. First, when €10 billion was being spent in the past, it was buying things of poor value to our country. We should and must move away from asking how we can match a level of expenditure that, even at that time, many in the Oireachtas felt was not delivering good value for the citizen. What we must do is look at how we can get best value for the taxpayer while increasing expenditure.

Regarding housing and all the progress we need to make there - and I know we need to make progress - of course, what the Deputy's point did not acknowledge is that 80 citizens per day are now being given solutions to their housing difficulty, whether that be through use of payments available through our social welfare system or new homes being offered to people. This is happening as a result of decisions that were made in recent years too. While we have much more difficulty we need to deal with, if it were not for the change in our economic circumstances I would not even have the ability to allocate this additional funding.