The CIF also firmly dismissed any suggestion that the capital investment programme in its current guise can act as a stimulus for the Irish economy.
Speaking on behalf of the CIF, Director General Tom Parlon stated: "Public infrastructure spending has become a vital part of the construction industry and the economy over the past 10 years. The government is now winding down this spending with the inevitable effect of depressing rather than stimulating the economy.
"The Public Capital Programme cannot be delivered unless sufficient pipelines of projects are commenced each year.
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CIF welcomes the use of private investment to provide additional investment on capital plans, and would welcome further exploration of off balance sheet financing.
Many of the government's assertions about its infrastructure spending plans do not hold up to scrutiny. The CIF has been monitoring the situation on the ground and all the indications are that the value of new projects started this year will not exceed half a billion. To achieve the targets set down by the government the value of new starts this year would need to be 16 times this figure."
Referring specifically to the cut backs in spending on non-national roads, the CIF Director General said: "These are the roads used by school busses and children cycling to school and the very same roads feature most of the country’s accident black-spots. The decision to cut investment in maintaining and improving these roads is extremely regrettable”.
The budget is a lost opportunity to stimulate activity, and realise outstanding VAT receipts. The value of trapped VAT in built but unsold houses is €1.1Bn.
The stamp duty trade-in scheme will have little impact on the overall market.
The reduced Mortgage Interest Relief for investors will deter any future investors in the residential market. This ultimately will impact on the supply of rental properties, and ultimately the rental market.
(JM/BMcc)
