Brendan Howlin (Wexford, Labour)

-----to ensure we can afford to undertake such projects in the not too distant future. Notwithstanding this, the transport allocation will include the commencement of the linkage of the two Luas lines, incorporating a line extending to Broombridge in north west Dublin, the railway safety programme that has been set out, replacement buses, and the upgrade of existing quality bus corridors will continue to be delivered.

It is worth pointing out that the smaller projects we are emphasising such as road maintenance projects, school building projects or school renovation projects tend to be significantly more labour intensive than the larger, grandiose engineering works that had been proposed.

Some €800 million will also be invested in programmes through the Department of Agriculture, Food and the Marine, bringing major economic and environmental benefits as that sector is important also to our economic recovery. It is important to note that the agrisector's contribution to the economy has been hugely resilient. They are leading the way on exports and the level of funding allocated will be a major help. Although there have been calls to continue with a high level of capital investment in order to stimulate economic activity, our priority at this time is to reduce the deficit. The bottom line is we are borrowing €18,000 million this year. Nobody will give us that money except the troika, and they will give it to us on their own terms and we need to reduce our deficit to 8.6% of GDP next year. That means increased taxation and cuts worth €3.8 billion. There is no gainsaying that. In this context, the public capital programme has to be scaled back. It is Darby O'Gill economics for anybody to suggest that we continue to spend regardless. However, I believe that we are providing for a level of funding that will not constrain the capacity of the economy to grow. This is the normal benchmark for deciding on the appropriate level of infrastructure investment. It is worth pointing out that in the years to 2016, average public capital spending will remain broadly in line with the European average, despite the tight fiscal constraints.