Pre-budget submissions from business lobby groups have traditionally focused on calls for hand-outs of various kinds. During the pandemic these calls were justified, while at other times the arguments were not as strong. But it is interesting to see the two major business groups, Ibec and Chambers Ireland, take a similar focus in their views on Budget 2024, both calling for more State investment to address key infrastructure deficits.
In its submission, published today, Chambers Ireland, chief executive Ian Talbot, says that the key issues faced by its members all relate to the lack of State “capacity” – from energy to water, transport, health and, of course, housing. Ibec’s recent document made the same point, saying that the resulting shortages are “a threat to economic advancement, generational solidarity and social cohesion”. Both focus, too, on the massive investment needs of the green transition.
That business lobby groups are focusing on the need for a bigger State is surely notable. And while the Government does, indeed, have plans to increase investment in key areas, there is a key decision to be made here before the budget. It is what happens to the cash projected to come into the exchequer coffers from budget surpluses over the next few years. The Government has indicated that much of this will be put into a fund to help pay for future bills in areas like pensions, while some will be set aside to help to support infrastructure investment. The Cabinet is due to decide how exactly this might work in the autumn.
The case of the business groups is that there needs to be a greater emphasis on directing funds to increase infrastructure investment, as this is the key economic need. The Department of Finance will worry that this could add to economic overheating and risk wasting money in a tight construction market. But the State system needs to do better in finding ways to get things done.
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This is a key debate for the autumn. It will also be framed by the resources which remain after once-off budget giveaways are added to the permanent changes already promised.