Ibec has today claimed that the Government has more within its power to spend on investment in much needed infrastructure, education and training, if it so chooses.
The group that represents Irish business today launched its Budget 2018 submission which calls on the Government to show further ambition in meeting Ireland’s critical infrastructure and demographic needs.
According to Ibec, the economy is growing quickly and sustainably. Despite this, there is a serious risk that under investment in public infrastructure, coupled with strong demographic pressures, will lead to overheating if action is not taken.
The group says that the 2015 GDP growth surge has afforded Ireland a potential additional €7 billion in investment capacity between 2018 and 2021 (€400 million in 2018) if the fiscal rules are obeyed. Ibec warns that the decision to forgo this additional space by excluding the 2015 GDP figure from fiscal space calculations would be a mistake.
Ibec believes this additional spending capacity should not be used for day-to-day spending and by channelling it into one-off investment projects Ireland can insulate the public finances from any future shocks.
The submission calls on the Government to focus on creating a high-skilled economy. Ibec says education and life-long training must be prioristised by reforming the tax and share option systems to attract high-skilled workers while also improving childcare affordability and quality, by targeting existing resources better.
Furthermore, Ibec is calling on the Goverment to defend Ireland's Foreign Direct Investment model where necessary and improve it where possible. The group claims that despite recent challenges, Ireland’s model of a small, business-friendly open economy within Europe has continued to demonstrate much substance, with accelerating investment and employment in highly globalised industries. Ibec warns that Ireland’s corporation tax strategy is a major part of its offering and must be safeguarded.
Ibec has also emphasised that the Budget must be Brexit proofed. The submission warns that Brexit leaves the Irish economy exposed, particularly the indigenous sectors most reliant on the UK market. In order to support businesses, Ibec say a multi-annual framework for funding Brexit mitigation should be put in place, targeted at supporting innovation, market diversification, upskilling and capital expenditure in equipment and machinery.
Speaking at the launch of the submission, Ibec Director of Policy and Public Affairs, Fergal O’Brien said, "The Government must use the opportunity of Budget 2018 to build on the success and substance of the Irish business model, with its compelling track record of recovery from global recession to once again being Europe’s fastest growing economy."
He added, "Our analysis shows that it has more scope to invest than previously estimated - it would be both sensible and prudent to use these resources to more urgently address the economy's severe capacity constraints."
Source: www.businessworld.ie
