Fine Gael conversion on Rainy Day Fund welcome but more needed
Labour Spokesperson on Public Expenditure and Reform, Sean Sherlock has welcomed the movement by Government to designate a large portion of the rainy day fund for increased capital expenditure however he said that more investment is still needed. The Labour Party has proposed since April that the €3 billion fund should be allocated to capital expenditure.
Deputy Sherlock said:
“Labour proposed in our submission to the mid term review of capital expenditure that the €3 billion allocated to a rainy day fund from 2019 to 2021 should be committed to increased capital expenditure to make it a meaningful package. On current fiscal plans, we will only be investing 2.2% of GDP in capital expenditure by 2021.
“I welcome the Fine Gael conversion on the rainy day fund, adopting our position, and I hope Fianna Fáil will also now recognise the need for increased capital investment.
“With historically low levels of investment, a growing and aging population, and the threat of Brexit it is clear that Ireland must invest in critical infrastructure. There are capacity constraints in housing, health, education and transport that must be addressed.
“An extra €2.65 billion of capital is currently available for allocation, however with increased construction costs, we have argued that to make it a meaningful package a further €3 billion from the rainy day fund should be committed for essential projects.
“For example we believe these funds would cover the cost of the three new maternity hospitals that are planned but not funded, the construction of the M20 linking Cork and Limerick, as well as the electrification and delivery of DART services on the Maynooth-Connolly line, and Heuston-Hazelhatch Kildare line, alongside other necessary projects.
“The Labour Party has previously pointed out that the successor to the NPRF, the Ireland Strategic Investment Fund (ISIF), with a discretionary portfolio of €8.1 billion, and a further €12.6 billion of directed investments in our banks, has served as a rainy day fund before, and can do so again if needed.
“The €3.4 billion raised from selling a quarter of AIB could also be committed to investment rather than paying down debt, if the Government would seek support in Europe to change the Stability and Growth Pact rules.”
The Labour Party Submission to the Capital Review is available here: