By Sarah Mac Donald - 02 September, 2013
Social Justice Ireland (SJI) has warned the Government that it must increase the scale of investment in the economy if Ireland is to see an economic recovery.
The organisation has published a new policy briefing focused specifically on investment.
It proposes the immediate establishment of an investment fund totalling €7bn aimed at tackling the stagnation in economic growth and generating new jobs.
Investment would be targeted in nine key socio-economic areas over the three-year period 2014-2016 and could generate up to 84,000 jobs and an additional €2.9bn in tax revenue according to SJI.
Ireland has the lowest investment level of all 28 EU countries, the non-profit charity said in a statement.
Outlining the basis for their programme, SJI said the €7bn investment would be funded by off-balance sheet sources including the Irish Strategic Investment Fund, commercial semi-state borrowings, domestic pension fund investment and funds from the European Investment Bank.
This would be focused on areas with long-term gains such as renewable energy, social housing, and care facilities.
“Without investment there will be no jobs, without jobs there will be no recovery and without recovery Ireland will be stuck in austerity,” SJI warned.
Dr Seán Healy, Director of Social Justice Ireland, explained that the country’s current level of investment is the lowest of any EU country.
“All other countries experiencing crisis in recent years have substantially higher levels of investment than Ireland. The scale of investment must increase,” he said.
The policy briefing proposes that the programme be structured as €2.5bn in 2014, €3bn in 2015 and €1.5bn in 2016.
The investment would be focused on areas such as renewable energy; new social housing units; primary care facilities; energy efficiency; school facilities; early childhood care and education; public healthcare facilities; non-national road improvements; and water services and facilities.
The briefing outlines how the implementation of the proposed programme would boost economic growth by 2% in 2014, 2.3% in 2015 and 1.1% in 2016.
It claims it would generate between 56,000 and 84,000 additional jobs as the programme is being implemented; as well as provide new and sustainable employment in the longer-term because of the availability of these new services and state assets.
The investment would also yield up to €2.9bn in additional tax revenues as a direct result of the stimulus; generate savings in other areas of state expenditure including rent supplement, healthcare spending and bank recapitalisations; and provide new lines of government revenue from water services and green energy sources.
The nine key socio-economic areas identified for investment over the three-year period are the development of renewable energy sources so that Ireland can reduce its dependence on imported and highly polluting fossil fuels.
The construction of additional social housing units across the country to address waiting lists which now total almost 100,000 households.
Development of Primary Care facilities to enhance community healthcare provision and reduce the pressures on hospital occupancy and use.
Retrofitting local authority and other social housing units with energy efficient products and devices so that the cost, morbidity and mortality benefits of this development can be accessed.
The construction of proper primary and secondary school education facilities so that all prefabs are eliminated by 2015.
The expansion of the early childhood care and education programme and facilities as well as additional investment to develop community nursing facilities focused on supporting older people.
SJI also proposes a large-scale programme aimed at improving the country’s non-motorway roads, and an investment programme to modernise water services addressing leakages and ensuring the long-term stability of a nationwide (urban and rural) supply of clean water.
“There will be both long and short-term returns to society from the adoption of an investment stimulus. In the long-run the improvement of infrastructure, the reduction in energy imports and the improvement in living conditions and public services offer substantial returns to Irish society” Dr Healy said.
“Ireland’s productivity will also benefit. Returns on such investment are likely to be much larger than the initial expenditure on the various projects,” the priest added.
“There are also a series of short-term returns from the investment stimulus which are significant given the current economic climate and the poor economic and employment outlook,” according to Michelle Murphy, Research and Policy Analyst with Social Justice Ireland.
“These returns include a boost to economic growth, an increased number of jobs and increases in Government’s tax-take.”
The full Policy Briefing can be read at: http://www.socialjustice.ie/content/policy-briefing-investment-growth-jobs-and-recovery-2013