Construction groups call for boost in Budget

Two building industry groups called on the Minister for Finance, Mr Cowen, at the weekend to boost infrastructure spending in his first Budget, writes Barry O'Halloran.

In a pre-Budget submissions published yesterday, the Construction Industry Federation (CIF) and the Institute of Engineers warned that spending on roads, public transport and other services has fallen behind the Government's own long-term target of 5 per cent of gross national product (GNP).

The CIF pointed out that Mr Cowen's predecessor, Mr Charlie McCreevy, set this target last year, while the Minister reiterated the Government's commitment to it in a speech to the group's national conference last month. According to a federation forecast, infrastructure spending could fall below the 4.6 per cent of GNP target set out in Budget 2004.

"The end of September Exchequer figures show net voted capital spending amounted to €2.6 billion in the first nine months of the year, a 6.4 per cent decrease on the same period last year," CIF director general, Mr Liam Kelleher said in a statement.

"This was €742 million below the expected profile. These figures clearly indicate that Government capital spending in 2004 will fall significantly short of the budget target of 4.6 per cent.

"GNP for 2005 is estimated by the Economic and Social Research Institute (ESRI) to be of the order of €132 billion. To reach the Government target of 5 per cent, the Government capital programme for 2005 will need to be around €6.6 billion.

"This would mean an increase in Exchequer capital spending of the order of 18 per cent for 2005."

The Institute of Engineers in Ireland (IEI) called for a similar increase. The group urged the Government to implement the Strategic Infrastructure Bill, which is designed to fast track key infrastructure projects through the planning process.

The institute's director general, Mr Kevin Kernan, said that failure to close the infrastructure gap would undermine the country's attractiveness to investors.

"This view has been supported by the ESRI's mid-term evaluation of the National Development Plan," he said. Mr Kernan called on the Minister to introduce a range of environmentally friendly tax measures.

He recommended that the Government introduce charges for domestic water use, tax disposable packaging and introduce tax credits to encourage businesses to invest in energy reduction.

He also expressed concern at the fall in the numbers of students who go on to pursue careers in science, engineering and technology. Mr Kernan urged doubling the budget for the Discover Science and Engineering Programme from €1.5 million to €3 million.