Ireland is a growing country. Since the early 1990s, the number of people living here has risen from just over 3.5 million to over 4.75 million- an increase of over one third.
What is more, between now and 2046 our population will further, to 5.6 million.
This growth is hugely positive and a real asset to our country. But with this increase will come a greater need for rapid public transport, a modern healthcare system and world class education.
In tandem with these demographic developments, Ireland faces the challenge of Brexit. The eventual exit of Britain from the European Union means we need to have the social and economic infrastructure to make us attractive for inward investment and facilitate indigenous businesses to compete and grow.
With these two challenges in mind, this week I received cabinet approval to begin the review of Ireland’s plan for capital investment for the years until 2021, known as Building on Recovery.
The review is happening earlier than planned because our strengthening economy has allowed us to commit an additional €5 billion to the €42 billion originally envisioned when we launched the Plan in 2015.
The review will come in two stages.
The first stage will be to review the priorities contained in the original plan, while also deciding how the additional funding committed by Government for capital investment should be allocated over the remaining period of the plan. This will examine priority areas for investment, consistent with the objectives of the Plan and also reflecting the specific investment priorities set out in the Programme for Government.
The second stage will be to assess and report on the framework required to underpin longer term analysis of Ireland’s infrastructure planning needs.
Of course, construction is already under way on a number of projects referred to the 2015 plan; including the Luas Cross City, which will be completed this year; the new Children’s Hospital, that has received planning permission and the first phase of construction on which has commenced; and the delivery of 14 Primary Care Centres through Public Private Partnerships, which commenced last year.
So while we plan for the future, we are also building important pieces of infrastructure now.
That said, I know we need to do more.
One thing that our growing population will certainly need is more homes. In view of this clear and urgent need for additional investment in housing, the Government has already agreed that €2.2 billion of the €5 billion additional capital should be allocated to support the Government’s initiatives aimed at tackling the housing crisis. This is in support of the Government’s Housing Action Plan, published last year by the Minister for Housing, Planning, Community and Local Government, Simon Coveney.
Our plans for housing will see the delivery of 47,000 new social houses by 2021 and return the private housing market to normal levels of activity of 25,000 units per annum.
The rest of the additional funding will be allocated across such areas as, transport, broadband, health, education and flood defences.
In total, when the additional investment is taken into account, this will bring total State-backed capital investment to almost 4% by the end of the decade.
At a time when many countries are looking at walls and borders, it is vital we in Ireland look outwards. As a small open economy and as a welcoming society, we will ensure that our links to the outside world – and its markets- are up to the job of assisting our export sectors and allowing easy access to and from Ireland.
In this regard, we must and will ensure that our plans for capital investment assist our ports and airports to develop and flourish. Indeed, aviation is a real Irish success story; with Dublin Airport seeing record passenger numbers, Cork airport reporting 8% growth last year, and Shannon Airport seeing 2% growth, including 400,000 flights to the United States.
We are very conscious, too, of the need for balanced regional development to avoid any lopsided growth on the east coast that simply puts more and more pressure on infrastructure in one part of our country. To that end, the review will be closely aligned with Ireland 2040, the National Planning Framework. This week, the Government published a consultation document on the Framework, asking what sort of place Ireland should be in 2040 and what we need to do to achieve this. How we invest capital resources is obviously a key component to develop the type of Ireland we want in the future.
It also goes without saying that our plans should be environmentally sustainable. The existing Capital Plan already says that €14.5 billion of investment will be delivered by the State companies, which include ESB, Irish Water, and Ervia and will primarily be targeted at energy infrastructure development, including renewable energy and smart metering.
This fits neatly with the Government’s National Mitigation Plan, a briefing document on which was published in the last week. This represents a whole-of-Government approach to further Ireland’s transition to a low carbon, climate resilient and environmentally sustainable economy.
In the context of these challenges, though, it is essential that the focus isn’t solely on the level of investment expenditure, but also that the investments undertaken are efficient and generate the planned and required outputs and outcomes.
Professor Lawrence Summers, a key adviser to both President Clinton and President Obama, has pointed out that the focus of investment shouldn’t solely be on new projects, as is often the case, but should take into account the requirement and benefit of expenditure on maintenance of current infrastructure.
This maintenance piece is an aspect of capital spending that we must ensure is not overlooked.
Over the coming months, I will be hearing the views of Government departments, of business and other groups and, crucially, of the public on how best we should add to and refine the 2015 Capital Plan to make it the best it can possibly be.
Inevitably, the level of demands will far outweigh the resources that are available.
However, I believe that collectively we will reach a consensus on how best to invest for the future, prepare ourselves for the economic challenges and opportunities that lie ahead and ensure a better quality of life for all who live here.