Brendan Howlin’s modest proposal presented as a turning point

Stimulus to create 3,000 jobs to be funded from sale of State assets

Minister for Education Ruair
í Quinn: The money allocated to his department will enable work to be carried out on 28 schools

Minister for Education Ruair i í Quinn: The money allocated to his department will enable work to be carried out on 28 schools


The €150 million stimulus programme announced yesterday is a modest proposal, as Minister for Public Expenditure and Reform Brendan Howlin freely conceded.

He added, though, that the plan “represents a turning point for capital investment which will hopefully gain momentum as the economy improves”.

The stimulus amounts to additional investment designed to support the creation of 3,000 new jobs.

Sale of State assets
The money will come from the sale of State assets, particularly the National Lottery licence. The announcement came just a week before the launch of the long-awaited and much bigger €6 billion New Era investment programme, which will be funded through the National Pension Reserve Fund. It raised suspicions that a bit of jockeying for position is going on between the Coalition partners in advance of big budget decisions on next year’s spending that are due to be made in the coming months.

Since taking office, the Labour Party has longed for an opportunity to push resources into extra public spending to boost the economy but the overwhelming need to get the public finances under control has frustrated that ambition.

Fine Gael Ministers are just as anxious to stimulate the economy but are more inclined to focus on the need for spending cuts as an essential part of that process.

A big battle over how the resources freed up by the deal on the promissory note should best be applied is inevitable in the months ahead.

One aspect of that battle is whether the emphasis should be on reducing debt or maintaining day-to-day spending on State services but another battle will be fought over where the emphasis for any extra resources should be: on current or capital spending.

It is unlikely there will be a simple Fine Gael-Labour conflict on these issues. Ministers of both parties in big-spending departments will want to defend their budgets, while those controlling the purse strings will have a different perspective.

Howlin made it clear yesterday that he would like to follow up his modest €150 million stimulus with further action to create jobs next year, whether through public private partnerships or direct capital spending.

‘Wedded to stimulus’
He added that he was “very wedded to stimulus” projects as a means of boosting the economy.

Other Ministers present at the launch made the point that capital spending not only provides a direct job stimulus to the economy in terms of job creation but also delivers vital infrastructural projects required to underpin continuing prosperity in the long term.

Minister for Education Ruairí Quinn, who is getting €50 million for school projects out of the pot, made the point at the launch that children born yesterday will have no classrooms to go to in four years’ time unless money is spent on school extensions and new schools. The money allocated yesterday will enable work to be carried out on 28 schools.

Minister for Transport Leo Varadkar, who is getting €50 million for roads, said surface restoration would take place on 600km of local roads.

He said that while the money was small it was sending a big message to the local authorities that their allocations for next year depended on them spending the money allocated on road projects.

Insulation improvements
Minister of State for Housing Jan O’Sullivan, who has an allocation of €50 million for energy insulation improvements in local authority houses, said that as well as improving living conditions for the poorest families in the country more than 1,000 jobs would be created in the sector.

All of the Ministers made the point that small projects tended to provide more in terms of local jobs than the big infrastructural developments.

“The economy is at long last starting to recover,” said Varadkar. If he is right, further stimulus packages are likely to be announced at regular intervals in the years ahead.

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