Budget must increase investment, warns CIF
Construction body says housing plan won't work without infrastructure moves
The Construction Industry Federation (CIF) has called for a significant increase in infrastructure investment in the Budget, arguing that the Government’s housing measures and job creation plans will not succeed without this.
CIF director general Tom Parlon said that almost a decade of low-level investment in infrastructure now risked confining regions outside the Dublin area to permanent lower growth levels. He cited the M20 connecting Cork to Limerick as an example of a project that could bring economic recovery to key regions and struggling rural communities.
The CIF said Ireland had one of the lowest levels of infrastructure investment in the EU, adding that bodies such as the European Commission, the OECD and the National Competitiveness Council had all called for an increase in infrastructure spending.
"Prior to the recession our infrastructure spend was approximately 5 per cent, now it is less than half of that at only 2 per cent. This is at a time when funding is at historically low levels and we could deliver infrastructure more cheaply than at any other time in our history," Parlon said.
He added that Ireland was allowing itself to be curtailed by EU fiscal rules that were "wholly unsuitable" for a country emerging from a recession with a growing population and economy.
On housing, the CIF has called for the introduction of a help-to-buy scheme where the Government takes equity in the homes of first-time buyers. It says this approach would be more effective than the grant scheme being suggested.
It has also said that any housing measures announced in the budget must be complemented with a relaxation of the Central Bank’s application of mortgage restrictions, arguing that the regulator should allow banks more exemptions to the rules.
The construction body also wants the Government to address taxation issues, such as the introduction of a 9 per cent VAT rate for construction, amendments to the seven-year Capital Gains Tax rule and introduction of incentives for living in town centres to revitalise rural towns.
The Construction Industry Federation annual conference takes place on Thursday October 6 at Croke Park. For more information see www.cif.ie .