‘Chronic underinvestment’ harming recovery prospects – Ibec
Decades of chronic underinvestment in key infrastructure is threatening to undermine the prospects for economic recovery, according to Ibec.
Publishing its submission to the mid-term review of the National Development Plan, the business group says such under-resourcing has resulted in quality of life challenges in areas like housing, environment, health, childcare, and commuting.
It says the last year, while presenting enormous challenges, has demonstrated that Ireland now has ‘unprecedented wealth-generating capacity’ to invest in future development.
“Whilst the short-term focus may be on the challenges and changes brought about by Covid-19 and Brexit, we must plan for these less dramatic but equally important long-term challenges which litter our country’s path,” Fergal O’Brien, Ibec Director of Policy and Public Affairs said.
The submission calls for, among other things, an upskilling programme to get people – who may be left unemployed after state supports conclude – back into the workforce, addressing the long term under-funding of higher education, as well as investment in innovation to address the competitiveness aspects of Brexit.
It says an extra €70 billion should be deployed on key infrastructural projects with an acceleration of some key projects, including the Dart expansion plan and the Metro North plan in Dublin.
This could be achieved, it said, by addressing issues in procurement, project management and reform of the planning system.
“Reform is urgently needed in order to reduce overall project delivery times by 50%. In order for the investment plan to achieve its objectives and deliver a meaningful improvement to quality of life, radical reform is required to ensure that much needed infrastructure projects are delivered as quickly as possible,” the submission says.
While Ireland’s economy was the only one in the EU to register growth in Gross Domestic Product (GDP) terms last year, we have had among the strictest pandemic restrictions in Europe and for longer periods.
That has contributed to a deficit for the 12 months to the end of February of €14 billion, as reported by the Department of Finance yesterday.
However, income tax receipts have held up well and Central Bank figures on deposits suggest that households have been saving significant amounts of money since the pandemic restrictions were introduced.
Some commentators suggest a large portion of that money could be released into the economy as restrictions are gradually lifted, supporting an economic recovery.
“While the plan for economic recovery must address multiple evolving aspects of both the Covid and Brexit crises, the experience of the past year has shown that Ireland now has unprecedented wealth-generating capacity to ambitiously resource this plan. A substantially enhanced and more ambitious National Development Plan must be central to the recovery strategy,” Fergal O’Brien said.