I propose to take Questions Nos. 74, 79 and 80 together.
The Irish Fiscal Advisory Council (IFAC) is an independent statutory body whose purpose is to provide an independent assessment of official budgetary forecasts and proposed fiscal policy objectives. While my Department did not consult with the IFAC in relation to the National Development Plan, IFAC's broad support for the Government's proposed approach to increased public capital investment, in its November 2017 Fiscal Assessment Report, was noted, as follows:
"Having been scaled back to a low base, public investment levels are expected to ramp up quite rapidly again, rising to levels that are among the highest in the EU under current plans. For instance, by 2021, public investment is planned to rise to 9.8 per cent of primary spending; 8.9 per cent of total revenue; and 3.5 per cent of GNI*. Across all measures, this would be higher than present levels for countries such as France, the Netherlands, Germany and the UK as well as for the EU and Euro Area aggregates. Importantly, this is possible while still complying with the fiscal rules in later years. "
"A commitment to stick to a specified level of public investment as a share of GNI* would be a sensible basis for fiscal policy over the medium term. If adhered to, this approach could help to prevent forced cuts to public investment in downturns and excessive expansions in investment during booms the preparation of the National Development Plan."
My Department consulted with the National Treasury Management Agency in connection with a number of the roles performed by that Agency, including:
- NewERA, in relation to the commercial State sector element of the National Development Plan;
- the National Development Finance Agency, as a member of the Expert Group reviewing the potential role for PPPs in helping to deliver elements of the Plan; and
- the Ireland Strategic Investment Fund, in relation to the role that the Fund could play in leveraging additional private investment to complement State-backed investment under the Plan.
In addition, of course, acting as the National Development Finance Agency, the National Treasury Management Agency is the statutory financial advisor to State authorities in respect of all public investment projects with a capital value over €20 million. The Agency will therefore continue to be consulted by the relevant Departments and Agencies in relation to all projects of this value that have been included in the National Development Plan, as required in accordance with the Public Spending Code.
With regard to the question of consultation with the European Commission Directorate General for Economic and Financial Affairs, the position is that the Government engages with that Directorate General on a regular basis, through the framework as established by the European Semester. This engagement has dealt with issues related to capital expenditure on a number of occasions in recent times:
- In July 2016 the European Commission made the Country Specific Recommendation that Ireland should prioritise government capital expenditure in public infrastructure, in particular transport, water services and housing.
- In February 2017 the European Commission subsequently commented in the Country Report for Ireland that some progress had been made in prioritising government capital expenditure.
- In July 2017 the European Commission made the following Country Specific Recommendation:
"Better target government expenditure, by prioritising public investment in transport, water services, and innovation in particular in support of SMEs. Enhance social infrastructure, including social housing and quality childcare; deliver an integrated package of activation policies to increase employment prospects of low-skilled people and to address low work intensity of households."
The National Development Plan seeks to address these issues by increasing investment levels in Ireland at a sustainable rate to amongst the highest in Europe and, very importantly, by ensuring that our infrastructure investment will be strictly guided by the National Planning Framework and its 10 National Strategic Outcomes.