The greatly improved state of the national finances has made increased public investment in transport, infrastructure and services both more necessary and more affordable. The latest revised forecast by stockbroking firm Davy projects the economy to grow by 6.4 per cent of GDP this year, and by 4 per cent in 2016. The Government’s plans for capital spending – €27 billion over the next six years – are designed to sustain the strong economic recovery that has gathered pace. Publication of a capital investment programme helps to remove uncertainty, by clarifying the Government’s intentions on some major public spending projects. However, the timing of the announcement – months before a general election and at the end of the Coalition’s term – also means it will fall to its successor in office to implement or modify the plan.
The programme provides for a midterm review. Then – depending on how the economy performs and the State's compliance with the European Union's fiscal rules – a further increase in capital spending may be possible. The EU rules, however, are strict: expenditure increases are determined by the economy's medium-term growth potential. And, as Minister for Public Expenditure and Reform Brendan Howlin has pointed out, the Irish electorate – in 2012 by referendum vote – has fully endorsed those stringent fiscal rules.
The projects are expected to generate 45,000 jobs, through investment in a wide range of infrastructural developments – some of which were heavily curtailed during the financial crisis. Transport projects account for more than a third of the overall funding costs and, appropriately, the Government chose Heuston Station in Dublin to outline its contents. Coverage of the public transport network – which the recent OECD survey on Ireland noted was below the European average – has been boosted with the decision to establish a metro link from Dublin city centre to Dublin Airport, and on to Swords. A transport issue, long and hotly debated, has, it would seem, finally been decided; but with a completion date more than a decade away.
In addition, the upgrade of the N7 at Naas will facilitate improved traffic flows between Ireland's major cities. The overall plan, as Tánaiste Joan Burton said, was designed both to create employment and to improve the quality of life for people in their experience of the public services provided – in health, transport and in arts and culture. And for Taoiseach Enda Kenny, it was "an affordable and realistic plan" that struck a balance between urban and rural regions. Two weeks before the budget, and some months before a general election, in presenting the €27 billion capital programme the Government's political timing has certainly proved astute.