Government Capital Programme Is a Lie

Sponge Bob

http://www.finance.gov.ie/documents/publications/reports/2010/capitalreview.pdf

Reading the table on pages 16 and broken down page 44 a GLARINGLY BIG LIE emerges from a peremptory reading the transport component which is allegedly one third of the entire programme.

The government has DELIBERATELY inserted CURRENT spending into CAPITAL spending.

EG in 2009 the government spent around €40m on National Road Maintenance and €120m on Regional and Local Road maintenance. This is CURRENT expenditure not CAPITAL expenditure, always was.

The €600m of roads expenditure shown in each of 2014 -2016 includes the €160m we spend now on inadequate maintenance and indeed the €300m we should be spending to maintain pavements in some useful kind of state.

The €600m will be net of €100m of PPP payments due by 2014 on the M50 Port Tunnel and Newlands Cross , Gort - Tuam , N3 toll subvention guarantee etc. We currently pay over €50m a year on PPPs ...mainly the M50. PPP PAYMENTS ARE ALSO CURRENT not capital

If we spend €300m to adequately maintain the network and €100m on PPP payments that leaves us with €200m a year for new roads in those years. Around €20km of high quality road build per annum in fact including land purchasing and design.

But 2/3 of the so called Transport Capital Budget is in fact Current, what a simply outrageous lie Probably the same in every other department.

Denerick

I can't figure out if you're angry here or not. I suggest using more bold formatting for greater emphasis.

danbohan

Sponge Bob wrote: »

http://www.finance.gov.ie/documents/publications/reports/2010/capitalreview.pdf

Reading the table on pages 16 and broken down page 44 a GLARINGLY BIG LIE emerges from a peremptory reading the transport component which is allegedly one third of the entire programme.

The government has DELIBERATELY inserted CURRENT spending into CAPITAL spending.

EG in 2009 the government spent around €40m on National Road Maintenance and €120m on Regional and Local Road maintenance. This is CURRENT expenditure not CAPITAL expenditure, always was.

The €600m of roads expenditure shown in each of 2014 -2016 includes the €160m we spend now on inadequate maintenance and indeed the €300m we should be spending to maintain pavements in some useful kind of state.

The €600m will be net of €100m of PPP payments due by 2014 on the M50 Port Tunnel and Newlands Cross , Gort - Tuam , N3 toll subvention guarantee etc. We currently pay over €50m a year on PPPs ...mainly the M50. PPP PAYMENTS ARE ALSO CURRENT not capital

If we spend €300m to adequately maintain the network and €100m on PPP payments that leaves us with €200m a year for new roads in those years. Around €20km of high quality road build per annum in fact including land purchasing and design.

But 2/3 of the so called Transport Capital Budget is in fact Current, what a simply outrageous lie Probably the same in every other department.

and your suprised about that ? they keep anouncing new jobs they previously announced 18 months ago as well, its just bluff to hide the reality

Sponge Bob

danbohan wrote: »

and your suprised about that ? they keep anouncing new jobs they previously announced 18 months ago as well, its just bluff to hide the reality

The outrageousness of the bluff is what annoys me. The 2010 figure of 1.414bn is Capital only and is confirmed as such on page 154 of 273 here along with a separately enumerated CURRENT expenditure of €222m.

The €222m is where maintenance, gritting, etc comes from and the 1.414bn is ( thoretically) for new build only .

Yet on page 44 of the new projection they say

Table 4.1 illustrates the financial allocation to the programme of capital investment in the Transport sector in the years to 2016 including provision for:

• The commencement of a number of key strategic national road priority projects (including progression of the Atlantic Corridor and the N11) and essential maintenance of the national network;
• Funding for ongoing local and regional road maintenance and improvement;

Showing clearly that they are disguising CURRENT as CAPITAL because there quite evidently will be no capital expenditure beyond 2013 and that before then is only for projects with EIB funding commitments I should think.

LFC Murphy

With the M18-M17 PPP securing EIB funding, will it go ahead?

Sponge Bob

At this stage yes. The 'at risk' PPP schemes are the Wexford package and the proposed Cork Limerick ones.

daithicarr

is this part of their 39 billion supposed stimulus over the next 6 years for schools and roads etc? which to me sounds like the regualr spending the state would need to engage. there are always capital projects, in good and bad times. this time they are just calling it a stimulus.

NYC353

daithicarr wrote: »

is this part of their 39 billion supposed stimulus over the next 6 years for schools and roads etc? which to me sounds like the regualr spending the state would need to engage. there are always capital projects, in good and bad times. this time they are just calling it a stimulus.

True but the finances are so bad they could have cut it back a lot more. The fact that some unnecessary projects like an underground railway are included certainly makes it fall under the "stimulus" category

daithicarr

true there are some projects like the metro north, which from what i read its groselly inadequate and projected to cost well above the international average for such projects, but a lot of it seems to be for things which they have no choice but to build, such as the extra school places.

dean21

The only plan is to buy the election in dublin again

flutered

the old f.f. smoke and mirrors stunt.

Godge

Sponge Bob wrote: »

http://www.finance.gov.ie/documents/publications/reports/2010/capitalreview.pdf

Reading the table on pages 16 and broken down page 44 a GLARINGLY BIG LIE emerges from a peremptory reading the transport component which is allegedly one third of the entire programme.

The government has DELIBERATELY inserted CURRENT spending into CAPITAL spending.

EG in 2009 the government spent around €40m on National Road Maintenance and €120m on Regional and Local Road maintenance. This is CURRENT expenditure not CAPITAL expenditure, always was.

The €600m of roads expenditure shown in each of 2014 -2016 includes the €160m we spend now on inadequate maintenance and indeed the €300m we should be spending to maintain pavements in some useful kind of state.

The €600m will be net of €100m of PPP payments due by 2014 on the M50 Port Tunnel and Newlands Cross , Gort - Tuam , N3 toll subvention guarantee etc. We currently pay over €50m a year on PPPs ...mainly the M50. PPP PAYMENTS ARE ALSO CURRENT not capital

If we spend €300m to adequately maintain the network and €100m on PPP payments that leaves us with €200m a year for new roads in those years. Around €20km of high quality road build per annum in fact including land purchasing and design.

But 2/3 of the so called Transport Capital Budget is in fact Current, what a simply outrageous lie Probably the same in every other department.

The conclusion I can draw from that is that €160m of road maintenance and €50m of PPP payments have been moved from current to capital which means that the real decrease in capital expenditure for next year is 1.2 bn euro rather than 1 bn euro. While infrastructure fans won't like it, those wanting the deficit cut will.

Sponge Bob

http://www.independent.ie/national-news/dempseys-secret-meeting-with-the-important-people-2297983.html

Mr Dempsey is said to have revealed that much of the €5bn promised for next year will not be used to start any new major projects, but will be used to pay off projects already under way.
Mr Parlon was highly critical of that, saying following the completion of major projects like the Limerick Tunnel, the Aviva Stadium and the Convention Centre, there is nothing left but "Mickey Mouse" developments.
"There is a real famine for decent work out there," he said.
According to sources, the normally combative Dempsey eventually agreed with much of what Mr Parlon was saying.
Mr Dempsey's spokeswoman said the meeting was "convivial but productive".

mikemac

convivial, that's my new word for today
I had to check what that meant

But I don't think it's a good idea for government ministers to hold secret meetings with lobby groups.
Which Tom Parlon is doing for CIF.

Yeah, let them put their points forward but at least in the open.

MrDarcy

It seems to me what is happening here is that the cabinet is looking down the road at the possible worst case near term scenario. This article:

http://www.independent.ie/national-news/markets-lose-faith-in-vulnerable-ireland-2297951.html

mentions that the state has currently gathered, (as in borrowed on the bond market), 80% of the cost of running the state for the rest of this fiscal year. But it's now August, almost September, so we can more or less call it month 9 of the year.

Now I'm no economist but there are only 12 months in the year and we are more or less at month 9, which is the end of the last month of the 3rd financial quarter. So come October, we are into the last quartile of the financial year or the last 25% of the year, with 75% of the year behind us and spent for. So pretty soon, we are at the 80% mark for what we have borrowed to run the state.

We also have the small little matter of the ECB now buying our government bonds behind the scenes to create the illusion that the markets are open for us when it appears that we are becoming increasingly untouchable as a national debtor, for two reasons, one is the amount of cash we have to forklift into Anglo and other banks to keep them in business and then even if we didn't have that going on, we are still spending twice what we are taking in, in terms of running the place.

It's starting to look to me like the government is holding back on capital spending or is now using/diverting capital funds to pay current liabilities, to keep the day at bay where there could be no money there to turn the lights on, Lenihan would have to call an emergency cabinet meeting to announce that we were facing default, as there was no money left to pay the bills. We are probably no more than a month or two from running out of cash if we cannot continue to borrow on the international markets, and it is seriously starting to look like that option is being closed off to us. All you have to do is read the increasingly focused financial articles that are now zooming in on Ireland and you can see the financial lions targetting it's next vunerable prey, the overweight, uncertain, confused, and blind wilderbeat that is Ireland Inc...

Scarab80

MrDarcy wrote: »

We are probably no more than a month or two from running out of cash if we cannot continue to borrow on the international markets, and it is seriously starting to look like that option is being closed off to us.

On top of frontloading our borrowing requirements into the first half of the year the NTMA have also stashed away 20bn in cash. In addition if things get really bad we could also liquidate 24bn in the pension reserve.

Regardless bond yields are now lower than they were for the past couple of months even after negative movements last week. Our bond auctions have been 3 times over subscribed on average during these higher yield periods.

The biggest problem we are going to have is if fears of a double dip recession continue or are realised. In that case the riskier soverign debt is going to be sold off by investors and targeted by speculators.

MrDarcy

Scarab80 wrote: »

On top of frontloading our borrowing requirements into the first half of the year the NTMA have also stashed away 20bn in cash. In addition if things get really bad we could also liquidate 24bn in the pension reserve.

Regardless bond yields are now lower than they were for the past couple of months even after negative movements last week. Our bond auctions have been 3 times over subscribed on average during these higher yield periods.

The biggest problem we are going to have is if fears of a double dip recession continue or are realised. In that case the riskier soverign debt is going to be sold off by investors and targeted by speculators.

Well at the rate we are forklifting pallets of cash into the banks, and whatever we save in cuts being completely negated by a balooning social welfare bill, on top of spending 60 odd billion just to run the place, the 20 billion that the NTMA have squirreled away in cash and the 24 billion in the pension reserve still doesn't look like a hell of a lot when we are burning through 5 odd billion a month in current spending. The banks are nowhere near cleaned up, forget NAMA and property losses, that's last years bad debt I reckon, the losses in the real economy are now the real iceberg, for every business that closes, there are bad debts left behind that end up hitting other businesses, causing more bad debts, more writedowns that end up driving more losses at the banks, I reckon we are completely and utterly in the manure business here, we haven't a hope under the current strategy or to put it better, under the current lack of any srategy. I reckon the ONLY option at the moment is for us to go bust.

Sponge Bob

MrDarcy wrote: »

We are probably no more than a month or two from running out of cash if we cannot continue to borrow on the international markets,

While you are correct overall the NTMA always maintains a sizeable float of €€s, perhaps even €20bn. Absent bailing out the rotten banks such a float will keep the government going for a lot longer than "a month or two" . Alarm bells will ring if that €20bn drops steadily month on month for a time.

If the bond market door shuts we have 6 months, not 1 or 2.

unit 1

Of course the 20 billion stash is really to keep the state intact should massive upheavel (unlikely ) occur, to fund the army and the likes. Strictly self preservation by the state, which would entail little or no regard for the general population.

Sponge Bob

http://www.independent.ie/national-news/road-projects-delayed-by-10-years-as-budget-halved-2307943.html

The NRA's funding of €800m will include the cost of paying for projects already completed, and maintenance of the network.

Maintenance was always counted as current spending ...until Dempsey took over as minister that is

The real capital spending will be €300m a year ...or so. That won't stop Dempsey making speeches every week promising some two bit road is on target and coming next year once his latest lot of consultants report to him on some aspect of it.

liammur

Sponge Bob wrote: »

http://www.finance.gov.ie/documents/publications/reports/2010/capitalreview.pdf

Reading the table on pages 16 and broken down page 44 a GLARINGLY BIG LIE emerges from a peremptory reading the transport component which is allegedly one third of the entire programme.

The government has DELIBERATELY inserted CURRENT spending into CAPITAL spending.

EG in 2009 the government spent around €40m on National Road Maintenance and €120m on Regional and Local Road maintenance. This is CURRENT expenditure not CAPITAL expenditure, always was.

The €600m of roads expenditure shown in each of 2014 -2016 includes the €160m we spend now on inadequate maintenance and indeed the €300m we should be spending to maintain pavements in some useful kind of state.

The €600m will be net of €100m of PPP payments due by 2014 on the M50 Port Tunnel and Newlands Cross , Gort - Tuam , N3 toll subvention guarantee etc. We currently pay over €50m a year on PPPs ...mainly the M50. PPP PAYMENTS ARE ALSO CURRENT not capital

If we spend €300m to adequately maintain the network and €100m on PPP payments that leaves us with €200m a year for new roads in those years. Around €20km of high quality road build per annum in fact including land purchasing and design.

But 2/3 of the so called Transport Capital Budget is in fact Current, what a simply outrageous lie Probably the same in every other department.

If that was the only lie they told, few would be complaining.