Job creation proposals made by a local Kildare TD have been well received by members of the Troika.
Deputy Catherine Murphy, who along with several of her Technical Group colleagues, met a delegation from the Troika at Government Buildings in advance of their seventh quarterly review of Ireland’s bailout programme last week.
Before the meeting Deputy Murphy circulated a discussion document to the Troika representatives which was commissioned by her and prepared by independent social policy think-thank TASC.
The document sets out alternative proposals for a stimulus package for specific, ‘productive investment’ projects designed to bring a quick, real and durable economic benefit to the country with large positive knock-on effects. Potential funding sources for the projects are identified and discussed in the document, she said.
Deputy Murphy explained that “following a previous meeting with Troika officials where it was clear to me that alternative proposals would be considered once they had been prepared rigorously and were evidence-based, I undertook to have well-grounded, realistic job creation alternatives prepared by TASC in order to make maximum use of the chance to speak directly with the organisations which largely dictate our economic policies”.
She said she received positive feedback from Troika representatives.
“Targeted investment projects with a high potential for job-creation have been seen in other small, open economies to have a genuinely durable economic benefit.
“Because the scope for spending in Ireland is so limited, with high levels of government, private and corporate debt causing significant confidence problems, other sources of capital must be identified to fund these projects.
“From a creditor perspective, the faster GNP grows, the more surety there is that debts can be managed. Unfortunately, our export-led recovery will not materialise quickly. The Government should be exploring all avenues available at this time to encourage real domestic job creation – with this in mind I have circulated the document I had prepared to the Minister for Finance and Finance Committee in the hopes of placing these objectives on the national agenda.”
She said while fiscal adjustment is necessary direct, targeted State-led investment, in addition to transitioning Ireland to exploiting domestic renewable energy resources, is necessary.
Sources of funding for this investment must be identified and exploited, she added.
In several cases, funding can be accessed without adding to the State’s debt. The Government should prioritise these types of projects with the Troika.
Deputy Murphy said the Government’s heavy emphasis on export-led growth will not significantly tackle unemployment in the short to medium term; particularly in the context of weak global demand. The experience of similar schemes in other open economies shows that even a small level of targeted investment produces tangible benefits. We must invest in projects with the potential to create jobs domestically.
Examples of productive investment projects incldue retraining and upskilling construction workers, enhancing next-generation Broadband provision, loan guarantee scheme for SMEs, seed capital for SMEs and startups, investment in Renewable Energy infrastructure, expanded research and development in the alternative energy sector and State supports for offshore and onshore wind.
Another project is enabling home retrofitting programmes and an early childhood education scheme to help reduce childcare costs and enhance educational environment for pre-school and young primary school children.
Funding could come from the National Pension Reserve Fund – investing some of the €5.8 billion presently held in the NPRF discretionary fund, use of Irish commercial semi-state companies, direct investment opportunities for holders of private pensions, limited privatisation of State assets where there is a clear long term economic benefit.
Support from the European Investment Bank, where lending capacity is set to increase and project bonds and Eurobonds.
- Henry Bauress