The Government must support the construction industry in delivering the National Development Plan and providing for expanded capacity, the Construction Industry Federation says in its pre-Budget submission.
It calls for a correction to the imbalance between supply and demand in the housing market. The submission makes more than 25 recommendations to the Government including the delivery of infrastructure, increasing capacity, managing inflation, labour supply and tax reform.
A further widening of bands, increases in allowances/credits and a modest cutting of rates are the key tax reform recommendations being advocated by the federation. It calls for a 1 per cent reduction in the standard and higher rates. Entry to the higher rate band should be extended by £3,500 (€4,447). Such a move would also put most of the average construction worker's wage within the standard band.
The basic personal tax credit should be increased by £500, the federation says. Among its other tax reform recommendations are:
cutting the two main VAT rates as part of a three-year strategy, helping to curb inflation;
doubling the first-time buyer's grant and paying it as a deferred tax credit over six years;
scrapping the 9 per cent stamp duty in rural renewal areas;
postponing the re-introduction of the 60 per cent rate of capital gains tax.
Resettlement allowances for those returning home to fill key vacancies in construction, engineering and planning should be provided to combat labour shortages, the federation argues. The work visa regulations should be extended to those having the requisite skills without a job offer.
The federation calls for a review of the apprenticeship system to enable an expansion in places. It recommends an expansion in the number of planners and an improvement in the basic remuneration package for planners.
The federation estimates that £17 billion of the £23 billion in expenditure on key elements of infrastructure under the National Development Plan will be construction-related. It says four key elements should be implemented to encourage the involvement of public private partnerships:
contract standardisation;
agreed project/concession structure models;
tendering process;
and payments for unsuccessful tenders.
