The largest spending programme in the history of the State was unveiled by the Government yesterday. Under the seven-year National Development Plan (NDP), €183.7 billion will be spent on a range of projects, ranging from roads and public transport to social inclusion and social housing.
Launching the plan in Dublin Castle, the Taoiseach Bertie Ahern described it as another milestone on what had been "an extraordinary journey of sustained national achievement over recent years".
However, the Opposition questioned the capacity of the Government to deliver on its ambitious targets and accused Fianna Fáil and the Progressive Democrats of electioneering, while economists gave it a mixed reaction. Fine Gael and Labour said they would look again at elements of the plan if they ended up in government after the election.
The NDP will spend €54.7 billion on the country's economic infrastructure; €49.6 billion on social inclusion; €33.6 billion on social infrastructure, €25.8 billion on human capital and €20 billion on enterprise, science and innovation.
Minister for Finance Brian Cowen said the plan would be delivered within the framework of economic and budgetary stability and was based on the assumption that annual average economic growth over the period would be 4-4.5 per cent.
He said the plan was drawn up in light of the need to tackle the infrastructure deficit in areas like transport as well as in social areas like housing. A new framework for all-island co-operation with significant Irish Government investment in the North is also a key part of the plan.
Mr Cowen pledged that all projects would be subject to constant appraisal to ensure value for money was being achieved.
Fine Gael finance spokesman Richard Bruton said the plan would cost €120,000 for every family in the State in the next seven years, but maintained that there was no guarantee that the Fianna Fáil/Progressive Democrats Government would achieve value for money with that enormous sum.
Labour's Finance spokewoman, Joan Burton, described the NDP as "the longest election mainifesto in history" and she also queried the ability of the Government to deliver on its commitments.
Commenting on a preliminary draft of the plan last October, the Economic and Social Research Institute (ESRI) warned that the size of planned expenditure could lead to inflation, but Mr Ahern and Mr Cowen said yesterday that they were "confident but not complacent" that the plan would not lead to inflation in the economy.
Mr Cowen maintained that the timing of the plan would help to avoid inflation. "Growth will be lower, the price effect of regulated prices will have petered out and the plan itself will reduce inflationary pressure in the economy by providing infrastructure". The rate of inflation increased to 4.9 per cent in December up from 4.5 per cent in November, according to figures released last week.
The plan drew a mixed reaction from analysts. "From the point of view of inflation, the risk is not from capital expenditure contained in the plan, but from current expenditure; this is the first time they've included it in the NDP," said Rossa White economist with Davy Stockbrokers.
But the plan was criticised by Alan McQuaid, chief economist of Bloxham Stockbrokers. "The plan is aiming to cover too many areas in too little time. A better strategy in our opinion would have been to focus on a few key infrastructural projects," Mr McQuaid said.
The Department of Finance said yesterday the plan was not directly comparable with the previous one. However, combined spending on economic infrastructure and social infrastructure amount to €88.3 billion, compared with €26 billion under the previous one.