Business groups have issued a warning to the Irish government, urging them not to squander the current windfall from exchequer returns. These groups have called for excess funds to be allocated to a special purpose fund that will address the country’s infrastructure deficits in the coming years. Chambers Ireland, representing 40 chambers of commerce organizations, emphasized the need to lock in these funds to ensure consistent availability for infrastructure development.
In its pre-budget submission, Chambers Ireland highlighted that this is the first time in five years that the government is drafting a budget without the immediate threat of a crisis. They urged the government to seize this opportunity to solidify the progress made and prepare for the uncertainties ahead, including the impact of population growth on infrastructure and services.
Chambers Ireland’s submission focused on housing and infrastructure, specifically addressing the activation of vacant sites, brownfield redevelopment, and the use of modern construction methods. The organization emphasized the importance of utilizing the current unprecedented tax revenues effectively, which are largely a result of the unique mix of businesses in Ireland.
Ian Talbot, the Chief Executive of Chambers Ireland, expressed concern about the infrastructure gap and its impact on the quality of life for those working in Ireland. He highlighted that the challenges of recruiting and retaining staff are reducing competitiveness and damaging the country’s international reputation. Talbot attributed the infrastructure gap to a decade of under-investment following the financial crash, further exacerbated by the effects of Covid, Brexit, and inflation.
Taoiseach Leo Varadkar has acknowledged the concerns raised by business groups and has assured that Budget 2024 will include measures to support businesses, taking into account the additional costs they will face, including an expected increase in the minimum wage. Varadkar emphasized the importance of not becoming complacent, citing the vulnerability of a small, open economy like Ireland to wrong policy choices and international events.
To mitigate these risks, Varadkar announced that approximately €10 billion will be set aside from the surplus next year to pay down debt and cover future infrastructure and pension costs. This decision aims to ensure the prudent allocation of resources and safeguard the country’s long-term financial stability.