Government to announce €2 billion stimulus package

Dave!

RTÉ

Irish Times

So the government is leaking some details about a stimulus package which is to be approved today, and announced in the afternoon.

They've scraped together the money from various sources including the National Pension Reserve Fund, future sales of State assets, and the European Investment Bank.

Projects in the package include: Grangegorman campus for DIT, schools, healthcare facilities, and roads.

What do we make of this? Some critics are saying that this will only stimulate the economy in the short-term, and once these construction projects are completed we'll be back where we started.

There doesn't seem to be anything in it to help SMEs, isn't that where the focus should be? Maybe they'll have something on this later when they announce it fully.

Are there no initiatives that could be invested in which would see an actual return, or which would grow the economy in the long-term? Building roads is nice for the locals, but are the N17/N18 and N11/25 roads preventing businesses from settling in those locations or something?

I would think the DIT campus and schools would be good investments in the future.

These all sound like good things that should be invested in, but if the effect is just to create a load of short-term construction jobs (and the associated suppliers, etc), then it seems like a waste.

Incidentally the ESRI warns against this, and thinks that any growth agenda should be taken at an EU-level.

whatstherush

Dave! wrote: »

Are there no initiatives that could be invested in which would see an actual return, or which would grow the economy in the long-term? Building roads is nice for the locals, but are the N17/N18 and N11/25 roads preventing businesses from settling in those locations or something?

Galway, now has no functioning Airport, the N17/18 will give a full motorway link to Shannon, which should be reachable in 30~40 mins when complete.

antoobrien

Dave! wrote: »

Projects in the package include: Grangegorman campus for DIT, schools, healthcare facilities, and roads.

Most of these are already being discussed on infra/roads.

Dave! wrote: »

There doesn't seem to be anything in it to help SMEs, isn't that where the focus should be? Maybe they'll have something on this later when they announce it fully.

There's no point in pumping money into sme's if they don't have (a) the workforce (DIT) and (b) the transport facilities to make and move their goods.

Dave! wrote: »

Are there no initiatives that could be invested in which would see an actual return, or which would grow the economy in the long-term? Building roads is nice for the locals, but are the N17/N18 and N11/25 roads preventing businesses from settling in those locations or something?

Let's put it this way - on the N17 Claregalway is a massive bottleneck - makes Dublin traffic look like a picnic. There are all sorts of rat runs to try and get around it. It takes 60 minutes to travel between Galway and Tuam (about 20 miles) during peak times. On the N18, traffic stops if somebody is visiting a shop in Clarinbridge. The effect is that it makes people want to avoid the areas.

Dave! wrote: »

I would think the DIT campus and schools would be good investments in the future.

Considering the consolidation of services that it will achieve this will probably end up paying for itself over 20 years.

Dave! wrote: »

These all sound like good things that should be invested in, but if the effect is just to create a load of short-term construction jobs (and the associated suppliers, etc), then it seems like a waste.

The hope would be that these jobs will support other jobs etc. It will certainly provide a boost to the local economies in Galway, Dublin and Wexford, taking people off the dole generally gives a boost to the areas concerned.

Dave! wrote: »

Incidentally the ESRI warns against this, and thinks that any growth agenda should be taken at an EU-level.

I take what the ESRI have to say with a pinch of salt due to the pronouncements they've made over the years often being proved wrong in hindsight..

Dave!

It'll obviously give a boost, but once the projects are complete won't we be back where we started?

Is the hope that the global economy will grow in the next few years, and this will keep us going until then?

Shouldn't we be investing in something a bit more sustainable? Not that I have any specific ideas Half these builders should probably be retrained

The SME sector's main complaint these days is the lack of availability of credit, not infrastructure... Can't the government do anything to help this?

KyussBishop

I don't think the ESRI deserves much or any credibility any longer; incompetent forecasts before and throughout the economic crisis, and serious questions about their impartiality due to funding sources. They should be replaced with a more independent research institute.

As for the stimulus: All well and good, at least if it goes into infrastructure it's well spent; any thoughts of injecting money into business though, should probably come after debt restructuring/writedowns, otherwise it's likely to be wasted without a corresponding increase in demand.

antoobrien

Dave! wrote: »

It'll obviously give a boost, but once the projects are complete won't we be back where we started?

If nothing else happens...no. We'll be a small bit higher. If there's any kind of pickup, yes it'll make things a lot easier.

Remember we're still at a competitiveness disadvantage. The easiest way to fix that is to make the regions more attractive, rather than trying to make Dublin cheaper - just look at the costs of living and getting around Dublin and imagine how hard it is to reduce those. Compare it to the cost of making it easier to have say a new medical devices factory in Tuam/Gort when this new road is built. It gives Galway some breathing space to deal it it's problems (transport, water, telecoms) - making the Galway region a bit more competitive and hopefully more prosperous. Bonus - it takes Galway people home from Dublin, reducing the pressure on Dublin's infrastructure - especially water.

djpbarry

Dave! wrote: »

Half these builders should probably be retrained

While I agree with you in principle, I think expecting large numbers of unemployed builders to retrain is unrealistic.

Dave!

True enough, but I'm not sure what the alternative is besides permanent emigration, or the government propping up the construction industry with projects like this. It'll never be back to its previous level, so there are thousands of construction workers with no prospect of a job for the forseeable future.

antoobrien

djpbarry wrote: »

While I agree with you in principle, I think expecting large numbers of unemployed builders to retrain is unrealistic.

Throw in the fact that there will always be a portion that are unsuited to work other than manual labour that is the real challenge we face as a country. How do we get suitable work for these people?

Also throw in the possibility that the ones that can retrain easily will more than likely be among best at their jobs and we'd want to keep in that sector to keep the quality levels up.

djpbarry

Dave! wrote: »

True enough, but I'm not sure what the alternative is besides permanent emigration, or the government propping up the construction industry with projects like this. It'll never be back to its previous level, so there are thousands of construction workers with no prospect of a job for the forseeable future.

Yep, pretty much. Unfortunately, a bunch of youngfellas have grown up with the idea that one can put down roots and still work in construction - there'll always be something that needs building somewhere nearby.

Elessar

How many jobs will this create?

Directly...10,000, 20,000 in construction? Indirectly...who knows, but I can't imagine it will have any real impact on the 300,000 odd unemployed. It seems solely designed to create construction related jobs. What about those who have no construction background? Not everyone is a builder. Will the jobs created out of this really impact the economy enough to help deliver jobs in other areas?

I don't think so. The return on investment here seems, at least to me, very small. What about other uses for that money? Put some of it aside and create another SSIA type scheme, to kickstart the economy in the next few years?

antoobrien

djpbarry wrote: »

Yep, pretty much. Unfortunately, a bunch of youngfellas have grown up with the idea that one can put down roots and still work in construction - there'll always be something that needs building somewhere nearby.

That's not as fanciful a notion as it appears to be. There's a lot of rubbish housing and office space that has been built over the past 10 years that's going to need maintenance or even rebuilding over the next few years. The trick with every industry is to hit the sustainable level. The only question I have with this (and I'm cringing thinking about it) is have we gone too early with it?

Dave!

Elessar wrote: »

How many jobs will this create?

Directly...10,000, 20,000 in construction? Indirectly...who knows, but I can't imagine it will have any real impact on the 300,000 odd unemployed. It seems solely designed to create construction related jobs. What about those who have no construction background? Not everyone is a builder. Will the jobs created out of this really impact the economy enough to help deliver jobs in other areas?

I don't think so. The return on investment here seems, at least to me, very small.

You would hope that the thousands who get jobs out of it will start spending it, and that will in turn give boosts to the retail and other sectors. The suppliers for the construction industry will benefit hugely also. Hopefully the increased economic activity will increase the tax take, and with the thousands leaving the dole the government will get a few quid out of it.

I would think there's good potential for it to have a knock-on effect to many sectors. Hopefully the builders actually spend the money though and don't just use it to pay down debts etc...

Welease

Dave! wrote: »

You would hope that the thousands who get jobs out of it will start spending it, and that will in turn give boosts to the retail and other sectors. The suppliers for the construction industry will benefit hugely also. Hopefully the increased economic activity will increase the tax take, and with the thousands leaving the dole the government will get a few quid out of it.

I would think there's good potential for it to have a knock-on effect to many sectors. Hopefully the builders actually spend the money though and don't just use it to pay down debts etc...

Does that really happen if the government is footing the bill for the total cost of construction (incl. higher wages than previous dole payments for each construction worker)?

turbobaby

What people don't seem to realise in order for government to spend money on stimulus, they have to get it from somewhere else, i.e. they sell a state asset, take money from the private sector or borrow it to be paid back in the future with interest.

None of the items leaked are income generating.

So I am totally against it. The government takes money from one area of the economy and puts it somewhere else. The Irish government have a long, bloody history of wasting Irish people's money. When will this change? Never. So I'm against any sort of 'stimulus package' from the goons on Kildare Street.

antoobrien

turbobaby wrote: »

What people don't seem to realise in order for government to spend money on stimulus, they have to get it from somewhere else, i.e. they sell a state asset, take money from the private sector or borrow it to be paid back in the future with interest.

One of the sources is the NPRF - which is money that's already there and "lying about" doing nothing for the economy. Another source is selling off parts of companies that don't deliver much value to the exchequer (e.g. Bord Gais pay a dividend of about €30m). If we were to get a good multiple of that and put it into capital spending, rather than using it to pay say some of the SW bill that's a proper use of the funds.

turbobaby wrote: »

None of the items leaked are income generating.

Directly no, but the can be cost saving. The DIT one will pay for itself over time - they have 32 buildings spread across Dublin city that they have to have linked together with duplicated services in some cases.

turbobaby wrote: »

So I am totally against it. The government takes money from one area of the economy and puts it somewhere else. The Irish government have a long, bloody history of wasting Irish people's money. When will this change? Never. So I'm against any sort of 'stimulus package' from the goons on Kildare Street.

If they were using this money to pay public servants or sw then it would be a waste. This will at least create jobs (less people on the dole) and hopefully allow companies to stabilise or grow (taxes, both direct and indirect as well as more jobs).

Contrary to popular mythology we do need a construction sector - they're is a lot of maintenance work that is needed on buildings, so keeping people in work and their skills current is never a waste of money.

The mantra "it's easier to get a job when you're working" has never been truer than it is today.

Sponge Bob

Dave! wrote: »

so there are thousands of construction workers with no prospect of a job for the forseeable future.

In Ireland. There are opportunities elsewhere of course. We diverted far too much of our labour force into Construction from 1995-2008 and while we overcorrected since I cannot see half of the peak construction labour pool working here .....ever...again.

spank_inferno

Is this "Stimulus Package" just snippets from previous mothballed capital expenditure plans dragged back into the light?

I always chuckle when I hear about DIT/Grangegorman.
That was a 'done deal' back when I was attending there in 2001!

antoobrien

spank_inferno wrote: »

Is this "Stimulus Package" just snippets from previous mothballed capital expenditure plans dragged back into the light?

While the projects are all pre-existing projects they're being fast tracked for funding that it looked like they wouldn't get.

There was a bit of discussion about this on infra last November (finally dragged up a link). All the projects mentioned are in the 4 year plan. Gort-Tuam was slated for 2013 (under a full PPP), New Ross/Enniscorthy was parked and DIT was a fudning dream project.

Pride Fighter

Next budget will cut 3.5 billion, the one after that 3 billion.

I welcome the stimulus, but wont there be still a mean contraction, even with the stimulus?

Bill Shock

I see a road construction project in Wexford among the plans expected to be announced.

What a surprise and an even greater coincidence given the home place of our pompous little Minister for Public Expenditure!! So much for a break from the past ways of doing things!!!

Would have thought after Martin Cullen's reign that the South-east was more than well looked after.

antoobrien

Pride Fighter wrote: »

Next budget will cut 3.5 billion, the one after that 3 billion.

I welcome the stimulus, but wont there be still a mean contraction, even with the stimulus?

This has been described in the media as "off the balance sheet" funding i.e. it doesn't appear in exchequer figures, so it's not as if they're taking money off DSP to pay for this.

All the cuts that can realistically be made to the infra budget have already happened, so it'll be "efficiencies" in service provision that will be the target of the next set of cuts.

That means shared buying, shared services etc, so the impact of the cuts won't be 3.5bn in wages (those figures also presuppose 0% growth, so the actual cuts will be different amounts as one rarely sees a flat 0), especially considering the €2bn infra plan.

antoobrien

Bill Shock wrote: »

I see a road construction project in Wexford among the plans expected to be announced.

What a surprise and an even greater coincidence given the home place of our pompous little Minister for Public Expenditure!! So much for a break from the past ways of doing things!!!

Would have thought after Martin Cullen's reign that the South-east was more than well looked after.

Would you rather spend the money on consultancy and planning for projects that aren't "shovel ready" because there's a minster and the president from the two counties that happen to be benefiting?

4.legs.good

1. cut billions from capital spending and kill existing plans (metro,t21) guys from infrastructure forum can provide exact figures over last few years

2. lower government expenditure mainly due to 1. above while crook park delivers **** all

3. announce "stimulus" which is just small portion of projects from 1. going ahead

4. ??? (cut billions more in coming budgets once again focusing on capital spending)

5. profit, get re-elected saying "see we stimulated"



politicians....

4.legs.good

antoobrien wrote: »

This has been described in the media as "off the balance sheet" funding i.e. it doesn't appear in exchequer figures, so it's not as if they're taking money off DSP to pay for this.

The NPFR kitty has been setup to save on future costs of pensions, this piggy bank has now been plundered for banks and now this (mind you this is better than giving it to banks)

those pension obligations WILL APPEAR on the balance sheet when the time comes already the pensions bill has grown by leaps and bounds in the last few years of "austerity" as public workers are pushed out the door with generous incentives.

Sierra Oscar

This is to be welcome, it will be good for the economy and good for the development of infrastructure - that much is clear. However I firmyl believe that a more encompassing and bigger stimulus is needed.

antoobrien

4.legs.good wrote: »

The NPFR kitty has been setup to save on future costs of pensions, this piggy bank has now been plundered for banks and now this (mind you this is better than giving it to banks)

those pension obligations WILL APPEAR on the balance sheet when the time comes already the pensions bill has grown by leaps and bounds in the last few years of "austerity" as public workers are pushed out the door with generous incentives.

We're not spending it on roads/schools/.hospitals and expecting it to disappear, we're investing it.

http://per.gov.ie/2012/07/17/speech-by-minister-brendan-howlin-td-government-infrastructure-stimulus/

The State must pay for these projects through an annual unitary payment to the PPP company over an extended period (usually 20-25 years). It is envisaged that annual unitary payments associated with projects identified for delivery in Phase 1 will be around €140 million. However, unitary payments are linked to performance of the asset over its lifetime and the State will only make payments where the asset is delivered in line with the terms of the contract. Projects will be monitored closely to ensure that they meet all requirements as set out in the project contract.

The NPRF will also be an important investor in this Phase 1 PPP programme and will decide on investment in individual projects in accordance with its commercial investment mandate.

CasaBonita

Bill Shock wrote: »

I see a road construction project in Wexford among the plans expected to be announced.

What a surprise and an even greater coincidence given the home place of our pompous little Minister for Public Expenditure!! So much for a break from the past ways of doing things!!!

Would have thought after Martin Cullen's reign that the South-east was more than well looked after.

Yeah, like Martin Cullen brought so much to the South-East that we are the envy of the rest of the country!

How about all the road infrastructure projects built during the boom in other regions? M7 to Limerick - Mid West, M8 to Cork - South, M6 to Galway - West. Then build a motorway to Waterford in the South-East (M9) and you have people up in arms saying the South-East is well looked after? The South-East currently has the highest unemployment rate in the country and I can tell you straight there is no-one in Government looking after us.

I have been reading / posting on Boards for more than 10 years now and every time some infrastructure was announced for the South-East you had people crying parochialism and saying that the infrastructure was not needed, Cullen pulls another stroke and so on.

Yet today a motorway project is announced for Galway (that get's more than it's fair share of Government investment) that goes from nowhere to nowhere and bypasses some small villages. Response on Boards.ie? Great, badly needed, about time etc. Get real, the south-east needs investment badly and I think that the projects announced for the south-east are of a far higher priority than the M17/M18.:cool:

antoobrien

CasaBonita wrote: »

Yet today a motorway project is announced for Galway (that get's more than it's fair share of Government investment) that goes from nowhere to nowhere and bypasses some small villages. Response on Boards.ie? Great, badly needed, about time etc. Get real, the south-east needs investment badly and I think that the projects announced for the south-east are of a far higher priority than the M17/M18.:cool:

Meh, the combined populations of Waterford and Wexford (the areas that will benefit) is about the same as that of Galway. Throw in the fact that Claregalway is competing with Adare for the honour of most congested village on a main route (20k vs 15k) and you'll see why so many people rate the West as being a higher priority.

You also have to consider our parish pump is a bit bigger now:

We have el presidente, you wouldn't want him on shocking bad roads would you?:D

Also I'm surprised that nobody has spotted the Enda link in there - the N/M17 (whatever it will be) will have to go through Mayo, he'll want to see work on Tuam-Claremorris, Tobercurry to Knock & Collooney to Tobercurry schemes.:eek:

Now if any of that goes ahead it'll be the biggest installation of parish pumps since the p flynn highway.;)

Chazz Michael Michaels

A lot of detractors on here could do well by Googling 'demand-side economics' and having a read. For something more specific, try 'keynesian multiplier'. Fiscal expansion creates demand (well, it tends to).

RichardAnd

djpbarry wrote: »

While I agree with you in principle, I think expecting large numbers of unemployed builders to retrain is unrealistic.

Indeed. I recently read a comment over on the RTE news site wherein, the poster advised a unemployed construction graduate to "retrain to become a software developer." Whilst one is ever capable of changing careers, the belief that someone can simply retrain and start a new position in a reasonable amount of time is not wholly true. Advising someone to retrain as a computer programmer is akin to advising someone to retrain as a pianist. It doesn't seem very realistic, does is?

Chazz Michael Michaels

RichardAnd wrote: »

Indeed. I recently read a comment over on the RTE news site wherein, the poster advised a unemployed construction graduate to "retrain to become a software developer." Whilst one is ever capable of changing careers, the belief that someone can simply retrain and start a new position in a reasonable amount of time is not wholly true. Advising someone to retrain as a computer programmer is akin to advising someone to retrain as a pianist. It doesn't seem very realistic, does is?

Back to education allowance, the grant, free university fees, entrance exams for mature students. No, it isn't realistic at all.

ardmacha

Then build a motorway to Waterford in the South-East (M9) and you have people up in arms saying the South-East is well looked after? The South-East currently has the highest unemployment rate in the country and I can tell you straight there is no-one in Government looking after us.

The south east has two railways and two motorway class roads. Donegal, a county with a bigger population than any county in the South East has none of these things. And unemployment there is worse if anything.

MOC88

Wasn't the investment in to jobs meant to be through renewable energy etc. not what appears to be 2 bypasses and a building/extension for d.i.t through ppp - they madfe out their investment plan to be a piece of genius - it seems to me like they didn't think about how it would affect the economy as a whole a geat deal

I was really hoping for the renewable energy investment - it would have potentially cut the costs for businesses and households throughout the country while providi9ng the temporary stimulus etc. rather than a temporary injection of cash in to the economy. Instead the balance of trade means more money flowing out Ireland and in to the middle east

Have the contracts been negotiated yet or jsut put out for tender - I really can't wait to see who winds up getting the jobs and will they be multinational who has their own workers coming from whatever eu country they originate

MOC88

ardmacha wrote: »

The south east has two railways and two motorway class roads. Donegal, a county with a bigger population than any county in the South East has none of these things. And unemployment there is worse if anything.

motorway is stretching it a bit but the south east caters for a much larger population as a whole (Waterford, Tipperary, Kilkenny, Carlow and Wexford) - not that Donegal isn't being badly ignored yet again -

Sponge Bob

I see Ruari Quiinn took the opportunity to REannounce some of the schools he announced earlier this year, they are all listed here.

http://www.education.ie/servlet/blobservlet/pr_12_3_2012_five_year_programme_2015_2016.pdf

poeticseraphim

djpbarry wrote: »

Yep, pretty much. Unfortunately, a bunch of youngfellas have grown up with the idea that one can put down roots and still work in construction - there'll always be something that needs building somewhere nearby.

This is a bigger social problem...we are not an industriaized nation as we have no natural resources to sustain that type of industry. And the cost of importing those resources here to work on is just not economically sensible.

It is why the Govt invests in eduation as it is a resource for us.


People are going to have to realize we are a services country..we have nothing else. There are a lot of communities that are going to have to wake up and realize their kids MUST get a full education and on to third level if possible.

Jobs requiring manual labor are never going to be a huge part of this country's economy again.

With the exception of fishing and farming there are no professions for these people.

If it is not realistic these communities had better get real. There are only so many jobs in the fire service and as a mechanic going.

The trade era is over. If it is not realistic for them to go on to university or some third level education we have a serious problem. They have to change.

And the mentality has to change ....why can't they go on to university...i know plenty of people from woring class backgrounds who went on to third level and did masters and PHD's. Realistically there is not an alternative.

djpbarry

RichardAnd wrote: »

Advising someone to retrain as a computer programmer is akin to advising someone to retrain as a pianist.

Depends on how good a pianist you want to be.

I don’t want to go into too much detail as it’s off-topic, but anyone who can use a computer is capable of programming to some extent. Granted, learning the fundamentals of computer science takes time, but something like Visual Basic will allow even a complete novice to start knocking out simple programs in a matter of hours.

djpbarry

poeticseraphim wrote: »

People are going to have to realize we are a services country..we have nothing else.

Ireland has significant food, pharma and semiconductor industries, among others.

poeticseraphim wrote: »

The trade era is over. If it is not realistic for them to go on to university or some third level education we have a serious problem. They have to change.

Jesus – do intellectual snobbery much?

You realise there’s a pretty severe shortage of tradesmen in the UK and Ireland? Probably because over the last 10 – 20 years, kids were discouraged from doing apprenticeships in favour of going to “university” to obtain degrees that aren’t worth the paper they’re written on. Do you know how much you can make as a plumber, for example, here in London? It would make your eyes water (EDIT: I just spotted the unintended pun here).

poeticseraphim wrote: »

And the mentality has to change ....why can't they go on to university

Maybe they don't want to? University isn't for everyone.

poeticseraphim wrote: »

...i know plenty of people from woring class backgrounds who went on to third level and did masters and PHD's. Realistically there is not an alternative.

Right, so if everyone’s going to go and get postgraduate degrees, who’s going to fix my boiler when it breaks? And how much is it going to cost me?

Max Powers

ardmacha wrote: »

The south east has two railways and two motorway class roads. Donegal, a county with a bigger population than any county in the South East has none of these things. And unemployment there is worse if anything.

Incorrect,
The South east according to latest unempoyment stats has the worst unemployment figures (2012)

The south east of Ireland has a population of of approx 490000, the west has a pop of 440000 approx (2011 census)

Duggys Housemate

The best thing a government can do is capital expenditure during a bust. The flip side of that Keynsian fact is we should curtail spending and tax reductions during a boom.

The cost is always less to the government than the headline figure. The 2 billion circulates around the economy, most is spent on labour - so each job reduces the cost of social welfare and brings money in tax, and VAT, and other transaction taxes, generating more employment as well as people spend also generates more taxes, reduces welfare. And we get a road.

golfwallah

I thought we had a consensus that more than enough scarce resources had already been invested in roads, until Brendan Howlin’s latest initiative to boost growth, which re-prioritizes road building ahead other wealth generating infrastructure capacity, such as:
• Broadband
• Replacing school textbooks with digital media (already in wide use in the USA)
• Digitise health records and make Ireland a centre of excellence for more efficient health spending
• More focused investment in tourism
• Investment in the food industry

These investment ideas and many more are covered in this Independent article from last year.

There'll never be enough roads but putting roads at the top of the list of priorities smacks a bit of P Flynn’s highway in Mayo and Lord Brookeborough’s M1 from Belfast to Dungannon (pure co-incidence that it made it easier for these guys to get home)!

KyussBishop

djpbarry wrote: »

Depends on how good a pianist you want to be.

I don’t want to go into too much detail as it’s off-topic, but anyone who can use a computer is capable of programming to some extent. Granted, learning the fundamentals of computer science takes time, but something like Visual Basic will allow even a complete novice to start knocking out simple programs in a matter of hours.

In fairness, it takes a long time to be able to program well; anyone can write code, but usually do it quite badly for a long while before gaining the skills/knowledge to put out good code (and while they're trying to get a handle on it, they are a burden to their employer).

More than that, it takes a lot of accumulated specialist knowledge (specific API's or niche frameworks) to get a really decent job, and even then most job descriptions are still going to have the "Computer Science degree and 5+ years experience" requirements.
Sure, those employers are taking the piss a bit as usually their bar isn't that high (as can be determined by wages offered), but it generally shows that you need to invest a fair bit of time there in order to try and make a career out of it.

If people want to retrain in coding, they need to spend a lot of time doing it in their free time as a hobby first in my opinion (for up to a year at least), and they need to get some enjoyment out of it; without that, doing it as a job will be cripplingly boring.

Chazz Michael Michaels

Duggys Housemate wrote: »

The best thing a government can do is capital expenditure during a bust. The flip side of that Keynsian fact is we should curtail spending and tax reductions during a boom.

The cost is always less to the government than the headline figure. The 2 billion circulates around the economy, most is spent on labour - so each job reduces the cost of social welfare and brings money in tax, and VAT, and other transaction taxes, generating more employment as well as people spend also generates more taxes, reduces welfare. And we get a road.

To be fair to Keynes, he said that the surplus saved in a boom should finance the expansion, not more borrowing. Chile are a good modern example of how to do it right.

antoobrien

golfwallah wrote: »

I thought we had a consensus that more than enough scarce resources had already been invested in roads

There are other investemnts going one, they're just not the big ticket items that attract headlines. E.g. there's apparently a joint courts/garda capital project investment going on which will entail three new regional Garda HQs being built.

golfwallah wrote: »

There'll never be enough roads but putting roads at the top of the list of priorities smacks a bit of P Flynn’s highway in Mayo and Lord Brookeborough’s M1 from Belfast to Dungannon (pure co-incidence that it made it easier for these guys to get home)!

Ah come on now be fair to Howlin (I hate labour so that's really sticking on my keyboard) the NRA made the decision to stop planning work on other projects like the M20 & N24 to ensure that they could get the ones that are currently further along like Nx/N11, New Ross/Enniscorthy, the N4 Downs Grade separation etc to go ahead.

It's not Howlin's fault (it's probably actually Leo's, seeing as it's his department) that the other projects were stopped, so when given a very short list of ones that can proceed within the timeframes of this investment (it wasn't supposed to go ahead until 2016 or later) it's a no-brainer to include something that's fairly ready, rather than go through possible years of planning, and potential delays from objections from anti roads groups over the other projects.

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golfwallah wrote: »

I thought we had a consensus that more than enough scarce resources had already been invested in roads, until Brendan Howlin’s latest initiative to boost growth, which re-prioritizes road building ahead other wealth generating infrastructure capacity, such as:
• Broadband
• Replacing school textbooks with digital media (already in wide use in the USA)
• Digitise health records and make Ireland a centre of excellence for more efficient health spending
• More focused investment in tourism
• Investment in the food industry

These investment ideas and many more are covered in this Independent article from last year.

There'll never be enough roads but putting roads at the top of the list of priorities smacks a bit of P Flynn’s highway in Mayo and Lord Brookeborough’s M1 from Belfast to Dungannon (pure co-incidence that it made it easier for these guys to get home)!

The construction industry has an active (political) lobby that asks for government money to be spent on construction, the IT industry by and large doesn't have such a lobby and largely opts out of such political activities, hence the construction industry gets the money.

That isn't the case in other places where the IT industry is prepared to get political and lobby for more spending on IT and their favoured pet causes.

turbobaby

antoobrien wrote: »

One of the sources is the NPRF - which is money that's already there and "lying about" doing nothing for the economy.

It's not "lying about", no money lies about unless it's under a mattress. If it's in a bank account it's having an effect on the economy by being loaned out.

Another source is selling off parts of companies that don't deliver much value to the exchequer (e.g. Bord Gais pay a dividend of about €30m). If we were to get a good multiple of that and put it into capital spending, rather than using it to pay say some of the SW bill that's a proper use of the funds.

100% agree

Directly no, but the can be cost saving. The DIT one will pay for itself over time - they have 32 buildings spread across Dublin city that they have to have linked together with duplicated services in some cases.

Surely we have enough college facilities in Ireland. If there's duplication, one should be eliminated, not consolidated with another. We are bankrupt after all. We need less people in college and more in work, learning actual on the job skills.

If they were using this money to pay public servants or sw then it would be a waste. This will at least create jobs (less people on the dole) and hopefully allow companies to stabilise or grow (taxes, both direct and indirect as well as more jobs).

Yes, it will create jobs, but it will also cost jobs too. The €2 billion isn't coming from thin air. It is being taken from somewhere else. The money can now not be used elsewhere (e.g. loaned to a small business instead) and will certainly have negative effects as a result.

Contrary to popular mythology we do need a construction sector - they're is a lot of maintenance work that is needed on buildings, so keeping people in work and their skills current is never a waste of money.

Sure, we need things maintained, but keeping people in work for the sake of it sounds like communist Russia. Surely there's better placed for money then repairing potholes.

Bill Shock wrote: »

I see a road construction project in Wexford among the plans expected to be announced.

What a surprise and an even greater coincidence given the home place of our pompous little Minister for Public Expenditure!! So much for a break from the past ways of doing things!!!

Would have thought after Martin Cullen's reign that the South-east was more than well looked after.

This is exactly what I mean. Taking money from other areas to pump it into areas that will buy them votes.

Sierra Oscar wrote: »

This is to be welcome, it will be good for the economy and good for the development of infrastructure - that much is clear. However I firmyl believe that a more encompassing and bigger stimulus is needed.

Typical one dimensional understanding.

In short, the Irish government are useless! They will mess this up, no doubt about it. I would rather they do not take €2b from one part of the economy and use it how they see fit, let the free market decide where it goes as they will likely do better than those hapless goons.

golfwallah

antoobrien wrote: »

Ah come on now be fair to Howlin (I hate labour so that's really sticking on my keyboard) the NRA made the decision to stop planning work on other projects like the M20 & N24 to ensure that they could get the ones that are currently further along like Nx/N11, New Ross/Enniscorthy, the N4 Downs Grade separation etc to go ahead.

It's not Howlin's fault (it's probably actually Leo's, seeing as it's his department) that the other projects were stopped, so when given a very short list of ones that can proceed within the timeframes of this investment (it wasn't supposed to go ahead until 2016 or later) it's a no-brainer to include something that's fairly ready, rather than go through possible years of planning, and potential delays from objections from anti roads groups over the other projects.

Don't get me wrong, I like to see a good road infrastructure in place and improvements are always welcome.

But, my point is about priorities and choices. And the recent announcement, welcome and all that it is, leaves me wondering if more spending on roads will produce a better long term sustainable return for the economy than some of the other alternatives, such as investment in the IT industry, etc.

Sure, investment in roads will produce a return (I wonder if these will be toll roads - they'll need to be to guarantee returns on the PPP deals) but will this produce more long term jobs in the economy than the alternatives?

I'd love to see the business cases to back up these decisions.:)

antoobrien

turbobaby wrote: »

It's not "lying about", no money lies about unless it's under a mattress. If it's in a bank account it's having an effect on the economy by being loaned out.

Way to catch on that's what the NPRF are doing, instead of leaving to to bank to do, after all they've done a steller job in the past 15 years.

turbobaby wrote: »

Surely we have enough college facilities in Ireland. If there's duplication, one should be eliminated, not consolidated with another.

AFAIK the DIT proposal is to consolidate the existing set of buildings into one campus - not to create a bigger DIT that keeps the current buildings. They might be able to seel a few off or elase them out, creating revenue for the campus, helping to pay back the moneys invested.

turbobaby wrote: »

We are bankrupt after all. We need less people in college and more in work, learning actual on the job skills.

JHC, do you know how much training goes into creating somebody that is capable of doing the kind of programming, engineering and other "smart economy" jobs that we are pushing. If you throw a brickie that can't even type at a programming job it's a waste of both the company's money and the brickie's time.

So how do we get these people to a state where they can be moulded by companies. It isn't like the trades where 2 years of training will leave you capable of most jobs, the complexity of learning programming is far in excess of anything most of the construction workers in Ireland will have done without direction from people that have letters behind their name.

In IT, most programmers aren't particularly useful in their first 1-2 years as it take a long time to get used to things that you've spent 2-4 years just learned the basics of.

Also it should be pointed out that DIT is a fairly popular institution with business for part time courses and business qualifications, so the facility itself is need to support existing businesses that want to upskill their workforces.

turbobaby wrote: »

Yes, it will create jobs, but it will also cost jobs too. The €2 billion isn't coming from thin air. It is being taken from somewhere else. The money can now not be used elsewhere (e.g. loaned to a small business instead) and will certainly have negative effects as a result.

The 2 billion will not be coming from the exchequer (read taxes) so the premise that it's being "taken from somewhere else" is flawed. It's coming from funds that we wouldn't have otherwise tapped. It will not ahve a negative effect - companies like Lagan, who had to lay off workers, will be able to consolidate their staff levels if they win contracts to supply these projects. This will in turn help support the small businesses in the areas where these people are living and working.

BTW it's illegal under EU law for a government to subsidize business (your suggestion for loans to small businesses).

turbobaby wrote: »

Sure, we need things maintained, but keeping people in work for the sake of it sounds like communist Russia. Surely there's better placed for money then repairing potholes.

These projects won't include repairs, but come tell me that when you've wreaked a wheel on a pothole of an unmaintained road

turbobaby wrote: »

This is exactly what I mean. Taking money from other areas to pump it into areas that will buy them votes.

The fact that this decision was announced by howlin doesn't change the fact that it comes under the remit of Varadkar (based in West Dublin) - who's department made the decision to keep this project going - not Howlin's. Howlin would have asked Leo of a list and he came up with, shock horror, the 4 projects that the NRA decided to pout into the second PPP scheme way back in 2009.

turbobaby wrote: »

Typical one dimensional understanding.

In short, the Irish government are useless! They will mess this up, no doubt about it. I would rather they do not take €2b from one part of the economy and use it how they see fit, let the free market decide where it goes as they will likely do better than those hapless goons.

Here's where you're wrong, the €2bn represented by these projects will not appear on the exchequer between now and 2018 (when the projects will finish) - spit's not taking from other parts of the economy. This will not cause redundancies anywhere else because the capital is not currently being used!

The only one dimensional thinking here is the thinking that we shouldn't be spending money on capital projects because it's taking away from elsewhere in the economy, when it's clearly and blatantly coming from funds that were not part of the economy (hence the off balance sheet nature of the spending - you will not see €2bn added to the exchequer spendning between

Duggys Housemate

turbobaby wrote: »

It's not "lying about", no money lies about unless it's under a mattress. If it's in a bank account it's having an effect on the economy by being loaned out.


Yes, it will create jobs, but it will also cost jobs too. The €2 billion isn't coming from thin air. It is being taken from somewhere else. The money can now not be used elsewhere (e.g. loaned to a small business instead) and will certainly have negative effects as a result.

The banks aren't lending anyway, they are consolidating their balance sheets, there is no way that the government money kept in banking will promote as much job creation. And some of it comes from the ECB.

antoobrien

golfwallah wrote: »

Don't get me wrong, I like to see a good road infrastructure in place and improvements are always welcome.

But, my point is about priorities and choices. And the recent announcement, welcome and all that it is, leaves me wondering if more spending on roads will produce a better long term sustainable return for the economy than some of the other alternatives, such as investment in the IT industry, etc.

Sure, investment in roads will produce a return (I wonder if these will be toll roads - they'll need to be to guarantee returns on the PPP deals) but will this produce more long term jobs in the economy than the alternatives?

I'd love to see the business cases to back up these decisions.:)

Investment in the IT industry is broadband around towns (which many towns have already done) and investment in education. Apart from those two things, IT needs buildings and service providers (e.g. network maintenance engineers, hardware sellers etc).

The big problem with saying that we should invest in broadband is that fact that we'll have to give it away to the telecoms companies (see what happened to Eircom and the lessons learned with BG & ESB networks - they kept the grids in state control and split out the supply side).

I'd love to see us doing what the Australians are doing and bring Fibre to the house, telling the service providers to work on content but I can't see that happening (sorry no link).

Besides all that we need to acknowledge that IT isn't the sliver bullet, and the lead time to getting developers is a long one (tv/film depictions of nerds bashing out world class apps in an all nighter creating instant millionaires not withstanding), talking several years to produce a developer that is effective.

We need manufacturing jobs as well as there will be people that simply are unsuited to IT jobs. For manufacturing, we need roads.

Edit: The business cases for the decisions will have be the labour intensive nature of the work. It's estimated that it could create 13,000 jobs - if they all come off the dole there's an immediate saving of 188*52*13,000=€127m per year on SW (probably more as they'll have other benefits that will lower/stop)