Capital spending deemed key to FF-FG coalition government

A new coalition between Fianna Fáil and Fine Gael will review the last government's flagship national development plan, with capital spending seen as a priority for both parties.

The 10-year capital investment plan, which runs to 2027, will be reassessed if such a government takes office, senior sources have said.

Fianna Fáil leader Micheál Martin last week told a meeting of his Senators and MEPs that inadequate funding was set aside for the existing plan and all the projects contained in it.

Mr Martin said the Department of Public Expenditure had discussed the issue during early government-formation talks.

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“The Department of Public Expenditure were basically saying these were very early estimates, not really worked out and that a fresher update of the NDP was required,” he said.

“That was parliamentary language from the Department of Public Expenditure to say that the NDP really wasn’t . . . that the monies available wasn’t corresponding to the projects that had been committed to.”

‘Houses’ and ‘hospitals’

Taoiseach Leo Varadkar has said he wants to "maintain capital spending, keep investing in those new houses, in the public transport, in the primary care centres and hospitals, because all that creates jobs in construction and also creates tax revenues and social infrastructure".

Other Fine Gael sources have said that capital spending will be key in ensuring that a perception that austerity has returned does not take hold among voters in the years ahead as the country recovers from the coronavirus crisis.

A framework document on how a Fianna Fáil-Fine Gael government would work is set to be signed off by Mr Martin and Mr Varadkar this week, and smaller parties will then be approached to see if they want to join a government with the two parties.

The two parties have 72 Dáil seats between them, eight short of a majority, and both say they want a third, smaller party and Independents to enter government.

While it is understood there will be no specific commitment on the national development plan in the framework document, there is said to be recognition of the need to increase capital spending after the Covid-19 crisis.

Health provision

“In that context [the] current NDP will be up for discussion,” said one source. Another source said capital spending would continue, particularly in housing, to “prevent a stop-start” and suggested a new review would examine the impact of the cost of the national children’s hospital.

Meanwhile, some sources have said that a Fianna Fáil-Fine Gael government could take a number of steps to build on the greater level of health provision during the coronavirus crisis.

The idea that the Covid-19 crisis has overnight created a single-tier health service was downplayed, with one source saying the State has instead rented facilities temporarily from the private sector.

One well-placed figure said another measure could include the retention of some of the emergency health facilities built to deal with the crisis, such as those used for self-isolation and step-down purposes, to be used as permanent step-down facilities. This, it is argued, would help tackle the shortage of bed capacity in the health service.

It was also suggested that €2.2 billion of extra funding that has gone into health as a “one off” due to coronavirus could be included in the base as part of calculations for next year’s budget, which would bring overall health spending to about €20 billion.