Fianna Fáil Spokesperson on Finance, Michael McGrath has welcomed the inclusion of a Rainy Day fund in the Summer Economic Statement published today and has called on the Government be more ambitious in pursuing off Balance Sheet financing options for capital investment.
Deputy McGrath commented, “The essential purpose of the Rainy Day fund is to avoid a scenario where, at the next economic downturn, the government of the day will have to immediately raise taxes and cut public spending on vital public services.
“It makes sense to have a cushion in place to protect the economy in such a situation and I am pleased that the ‘Confidence & Supply’ commitment to establish a Rainy Day fund is being honoured. We will work with all stakeholders now to work out the modalities of how such a fund will be established and how it will work in practice.
“In relation to capital investment, the government needs to be far more ambitious when it comes to using Public Private Partnerships (PPPs) and the Ireland Strategic Investment Fund to boost investment in the economy.
“The domestic 10% PPP rule is too conservative and I welcome the fact the government will now review this rule. The fact that ISIF has €6.3bn invested outside of Ireland at a time when we are crying out for investment in public infrastructure also needs to be urgently addressed,” concluded McGrath.
Spokesperson on Public Expenditure and Reform, Dara Calleary added:
“We have heard a lot from the Government in recent weeks in relation to capital expenditure. It’s as if the Government just woke up and realised that major connectivity and housing deficit appeared overnight.
“In 2015 the previous Government published the Capital Plan with a lot of fanfare. Again today, the Government releases its Summer Economic Statement with the same empty rhetorical flourish.
“There is little or no ambition in the SES today when it comes to investing in crucial development projects.
“Fianna Fáil has been consistent in calling on the Government to look for alternative funding mechanisms for critical capital projects.
“The Strategic Investment Fund or ISIF has around €6.3 billion invested in the global markets. ISIF is currently reassigning these funds and commercially investing them in the real and domestic economy. This needs to be accelerated.
“The Government’s own self-imposed rule of not spending more than 10% of the capital expenditure budget on PPPs is one such example of their inability to think big and think bold.
“In their annual report, the NTMA make it clear that PPPs offer an alternative means to financing some of our significant infrastructural requirements.
“PPPs will not be appropriate for every project, and it indeed will not in itself solve the deficit we have in terms of our capital infrastructure. However, every option must be explored to find creative solutions to the infrastructural challenges we face.
“Finally, it seems that the Government is undertaking a review of PPPs. Their efforts over the past number of weeks to convince the public and the media that they are the saviours of capital investment won’t work. Their record of delivery on capital investment is clear for all to see,” concluded Calleary.