Use opportunity provided by Budget 2014 for stimulus says CIF

The Construction Industry Federation (CIF) is calling on the Government to use the opportunity available to them in the forthcoming Budget to stimulate the economy as this will create jobs, increase tax revenue and reduce social welfare costs.

In the “CIF Budget 2014 Submission” document, the CIF highlights the fact that the upcoming Budget will be the first time since the Government came to power that it has room to bring forward stimulus measures.

The CIF points out that stimulating growth in the construction sector through a capital spending stimulus is the quickest way to create jobs which reduces unemployment, while also increasing income tax revenue and reducing social welfare payments. Referring to the fact that one in four of the people on the Live Register are former construction workers, the CIF highlights out that the construction sector offers the shortest turnaround to get people back to work and that is also provides a regional spread of employment opportunities throughout every town and village in Ireland.

“Budget 2014 represents an opportunity,” said CIF Director General Tom Parlon. “For the first time since this Government came to power, it has room to manoeuvre and the ability to bring forward stimulus. Up until now the Government has concentrated on tightening the State’s fiscal and economic conditions. These steps played a major part in getting the economy back on track. The measures taken, combined with the excellent diplomatic negotiations carried out by the Irish Government with our EU and other Troika partners have provided the means whereby stimulus can be implemented.

“This opportunity must be grasped. If the Government wants to create more jobs, to reduce the level of unemployment, to increase income tax revenue while also reducing the social welfare burden on the State, then we need to encourage growth in the economy. The most effective way to achieve that goal in the shortest possible turnaround is to get the construction sector working.

“One in four of the people on the Live Register (104,754 according to the Department of Social Protection) are former construction workers. These people are spread all over the country. A significant portion of them would not require retraining. If there was more construction activity taking place they could move seamlessly from the dole queues to the ranks of the employed with the minimum turnaround.

“No other sector provides that kind of opportunity. Growth in no other sector will reach as many different parts of the country, improving local economies in as many regional towns and villages.

“For all these reasons the main and overarching priority from the CIF for the forthcoming

Budget is that the Government uses this opportunity to stimulate the economy by providing

more funding for capital projects,” Mr. Parlon said.

The CIF submission also highlights several objectives that the Government should look to implement in Budget 2014 if they wish to improve the level of construction activity taking place. These are: 

1 Maximise Exchequer benefits from public capital expenditure.

2 Stimulate private sector investment.

3 Stimulate residential sector activity.

4 Prepare for the future needs of the industry.

5 Tackle the shadow economy in the construction sector.

6 Address taxation matters which inhibit the planning process.

Among the specific measures put forward by the CIF to achieve these objectives are:

· The public capital programme should be increased for sustainable projects with increased emphasis on local construction activity.

· Unemployed apprentices/ craftspeople should retain social welfare entitlements while undergoing re-training programmes.

· A temporary VAT rate of 9% should be introduced for the construction sector for a period of two years.

· An enhanced capital allowance for energy efficiency works on commercial buildings should be introduced.

· ‘Safe Pass’ cards (training certification cards for the construction industry) of all construction employees should carry their PPS numbers.

· The ‘Living City’ initiative should be extended to other urban areas on a national basis.

“There have been some positive signals seeping into the construction industry recently. For that progress to continue the Government needs to help the industry to keep moving forward. Budget 2014 provides a platform for the Government to send a signal that they want the construction sector growing and providing the boost to the economy it is more than capable of. If the Government wants to improve the level of employment, to increase tax revenues, to reduce social welfare costs and to improve the various facilities available to the Irish public then they should take the opportunity offered by Budget 2014 and start bringing in measures that will help the construction industry and achieve these very positive outcomes,” Mr. Parlon concluded.