Politics

Extra capital spending can drive growth, says Joan Burton

Building schools and hospitals will act as stimulus, says Tánaiste

Tánaiste Joan Burton: ‘As we recover, I see capital investment, public capital investment programmes, as major drivers of the future prosperity of the Irish economy.’ Photograph: Frank Miller
Tánaiste Joan Burton: ‘As we recover, I see capital investment, public capital investment programmes, as major drivers of the future prosperity of the Irish economy.’ Photograph: Frank Miller
Fiach Kelly
Wed Dec 24 2014 - 01:00

Tánaiste Joan Burton has said the planned spring statement on the economy could focus on using capital investment, such as building schools and hospitals, as stimulus projects.

The Labour leader also said the spring statement would enable the Coalition to focus the political debate on the economy, which the Government feels is its strongest card.

Coalition sources say the timing of the budget next October will not allow enough time for economic announcements to sink in before the general election, due in spring 2016.

The most likely time for the Government's spring statement is April, at the same time as it submits its stability programme update to the European Commission.

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It would follow the UK template, where the chancellor of the exchequer issues a statement on growth in December, with the budget in March.

Public expenditure

In a Christmas briefing with political correspondents, Ms Burton said she believed there was “merit” in the Government stating its spending plans early next year. “In terms of a spring statement, one of the areas in relation to public expenditure that has suffered most during the crash has been the whole area of capital investment,” Ms Burton said.

“So, come every April, if we were to move to a spring statement, would be the likely time under the EU’s semester process, and it’s also when we send the stability programme update to the EU. I think that that would be a good time to look at how is the Irish economy performing and, in particular, what are the capital investment programmes that we’re committing to. Because as we recover, I see capital investment, public capital investment programmes, as major drivers of the future prosperity of the Irish economy.

Essential infrastructure

“It’s the way we build the schools, the roads, the hospitals, it’s the way we invest in Irish Water and in other essential elements of infrastructure. And the other side of that, is that’s putting people back to work and it’s putting money in circulation into the economy. So, when people talk about stimulus, capital investment in a mixed economy like the Irish economy is a key stimulus driver.”

The Tánaiste said the idea of a spring statement had been discussed in Government circles, and said it would allow for a public discussion on the floor of the Dáil about how the economy was performing.

“I do think there is a value in regularly having an economic discussion of the overall trend in the economy regularly.

“I mean, I’ve been a bit bemused I have to say, in the last year and a half, there has been no general economic resolution or private member’s motion put down by the Opposition at any point.

“Simply because they have been unwilling – it’s a bit like the Northern talks – they’ve been unwilling to come to the table and talk about the alternatives. They’re willing to say, if you like, what they don’t like.

“They’re willing – and that’s their job – to criticise what they see being offered and implemented by the Government and I don’t have a problem with that. So, having a spring statement and, indeed, an autumn budget statement and other debates during the year . . . would actually focus on where is the economy now, how is employment proceeding, what should we invest in.”