One of the sectors likely to be hurt most in the harsh aftermath of the Estimates is construction, writes Una McCaffrey
Minus signs can be frightening things, particularly when you are in the business of making profits. So it must have been in the commercial sector on Thursday evening, as the Minister for Finance unveiled his Estimates.
Almost all aspects of the Republic's business community will be affected by the stringent measures contained within the 111-page document, as department after department cuts down on the money it will spend on everyday purchases such as travel, office furniture, postage and consultancy.
While this is undoubtedly bad news for the companies providing such goods and services, it arguably is not the biggest business blow in the Minister's overall expenditure-tightening.
Of more concern is the funding the Government will provide next year for the development agencies, IDA Ireland and Enterprise Ireland.
Despite Mr McCreevy's assertion at a software industry function last night that "the support of Government agencies such as Enterprise Ireland is particularly important", both bodies will suffer budgetary cuts of about 8 per cent next year, a reduction large enough to raise doubts about their effectiveness at an already difficult time.
Unsurprisingly, both are quick to dismiss such concerns, beyond the IDA's admission that 2003 will be a "pressurised year".
The authority's spokesman, Mr Colm Donlon, said that the cut in overall funding - from €137.5 million to €125.5 million - was "perfectly logical" in the prevailing economic context, but acknowledged that some projects would suffer. He said that grant aid - up 3 per cent on this year, less than the rate of inflation - would be delivered on an "extremely selective" basis.
All grants already contracted will be met in 2003, accounting for about €50 million of the IDA's €90 million grant purse.
The remainder will, according to Mr Donlon, be "flexible money" that needs to be spent cleverly.
"We wish we had more, but it's time for Ireland to stop marketing itself on the basis of handouts anyway," he said yesterday.
If there will be losers in the shakedown, they are likely to be the more developed parts of the country, as the IDA targets investment to the regions.
Large regional towns will also feel some pain, however, as the IDA's building budget is reduced by 84 per cent to just €3 million. The construction of business parks will be the biggest casualty.
As for Enterprise Ireland, a cut of about €12.5 million will bring the authority's overall budget to €151 million.
A spokesman there repeated the IDA's line that the emphasis should no longer be placed on grant aid to industry and more on "knowledge sharing".
A similar policy is likely to be adopted by the Shannon Free Airport Development Company, where grants to industry will shrink by 30 per cent next year, amounting to just €3.5 million.
In the domestic market, one of the sectors that will be hurt most in the aftermath of the Estimates is construction, as a 7 per cent cut in capital expenditure takes hold.
Construction Industry Federation (CIF) secretary-general Mr Liam Kelleher estimated yesterday that this reduction could halve profits at some member firms.