Any plan to spend 2.25billion euro is welcome and especially in an economy such as ours. Though the amount does have to be taken into context, it represents less than 5% of the total amount put into our banks which have all failed and most of the funds have long since gone from these shores.
I have some concerns regarding the type of stimulus, the sectors it is being spent in and the real potential of such spending over a 6-7 year period.
So we have very limited resources available to us and even the actual source of the 2.25b is scratchy to say the least. The minister insisting that he is going to be able to raise at least 50% of the fund in Public Private Partnerships (PPPs) is in my view very ambitious. What makes the minister think that investors who have fled the country in the past 5 years will invest in an economy that is still contracting? Or is he planning to give the projects away as was done in the past (M50 and Eastlink Bridges)?
The stimulus fund is to be spent in three major areas Health, Education and Roads. All of which have had massive investment in the past and in the case of health and education continue to have massive funding on an ongoing basis. Health spending contributes to our doctors and consultants being paid some of the top salaries in the world. While teachers in our education system are amongst the best paid teachers in the EU (and possibly in the world though I do not have the figures at hand). Do these areas really need any more spending and will the additional spending just result in more overpaid professionals? I have no doubt but it will. Is this another case of the elite political and professional classes of the country looking after them selves’ again?
As for the proposed road infrastructural spending in addition to other projects that have been approved previously will the projects be so beneficial to the country to spend the very limited resources on? Again I very much doubt it. And again we in Ireland manage to build 1k of road for the same price of 3k in Germany so will we really be getting value?
So the stimulus is all about jobs. Construction jobs which will be gone in a few year’s time and then jobs for overpaid professionals in the colleges, schools and medical centres. Sounds like a really great “pathway to recovery”!
Would our leaders not be better off in looking to different places for stimulus such as encouraging small businesses to grow with additional funding made available through a new development bank (as promised in the program for government), real concessions for employing additional people. Encouraging investment with the reintroduction of capital allowances for SMEs. This is where real sustainable jobs will be created without future drain on the state through high wages and massive pension schemes.
It looks like we are in for the same old thinking again. The pathway to recovery is going to be a very long one with this kind of thinking!