Budget 2017: M20 could spread recovery
In terms of resolving the housing crisis, the Construction Industry Federations’s Irish Home Builders Association welcomes the introduction of this tax-rebate scheme aimed at helping first-time buyers to save deposits for starter homes.
The Central Bank’s loan- to-income rules will continue to ensure that first-time buyers can only access affordable mortgages and dampen significant increases in prices.
The CIF welcomes extending the home renovation incentive scheme. In addition, the minister’s commitment to reintroduce interest relief for landlords to 80% this year and up to 100% over the next five years is to be welcomed.
The significant amount of capital expenditure on social housing announced by Public Expenditure Minister Donohoe is also welcomed and it can lead to a significant increase in units available. Another key initiative of ministers Coveney and Donohoe in this regard is the local infrastructure fund that will see €50m made available to make ready land capable of supporting significant housebuilding activity and will make a major contribution.
However, we are predicting that the low level of infrastructure investment across our economy will be the next crisis Ireland faces. Nearly a decade of low-level investment in infrastructure now risks economic growth and is confining regions outside the greater Dublin area to permanent lower growth levels.
National infrastructure, like the M20 connecting Cork to Limerick, could bring economic recovery to key regions and struggling rural communities. The M20 project is estimated to cost €800m and the Government’s original analysis showed the economic benefits would outweigh costs 2:1.
Unfortunately, Ireland has one of the lowest levels of infrastructure investment in the EU. We are allowing ourselves to be curtailed by EU fiscal rules that are wholly unsuitable for a country emerging from a recession with a growing population and economy. The Government must continue to press our case with the EU to facilitate this investment. The CIF also welcomes measures in the budget that focus on supporting the self-employed.
