The central challenge facing the country is its infrastructure deficit. We believe that more could be done to tackle this deficit more swiftly. This involves increasing and redirecting capital spending towards areas with the highest return and with the highest priority.

“The Public Capital Programme must major on addressing the infrastructure deficit,” said Dublin Chamber Chief Executive, Gina Quin. “We believe that Government should redirect the capital expenditure allocated to buildings around the country as part of the decentralisation process and use this money to accelerate the completion of the primary roads programme and strategic non-national roads.”

Early completion of the inter-urban motorway network by the NRA would provide a greater stimulus to regional development across the country than the protracted and flawed decentralisation process. Swift access to the major urban centres will help lower costs and ensure greater efficiencies amongst firms and support balanced regional development. We believe that the NRA have sufficient capability and a clear line of projects that could accelerate the ten year national programme outlined in Transport 21 and deliver it by 2012 – some three years earlier than envisaged.

The 2006 budget for what are termed strategic non-national roads is grossly inadequate. While some local funding is available, we consider an annual Exchequer allocation in the order of €150m is required. Such a budget allocation could ensure the swift delivery of important road projects in the Greater Dublin Area such as the Macken Street Bridge, the road improvements around Dublin Airport known as the “Airport Box” and the link from Military Road to Heuston Station.

Transport 21 is a welcome development. In addition to this plan, Government should prepare other multi-annual capital programmes along similar lines, focusing on the key areas where investment and clear decision making is necessary. There is a need to provide clear strategies in these areas in order to provide for the substantial projected increase in population. Government must produce an Environment 21, Health 21, Housing 21 and Education 21. Businesses and citizens need a clear assurance that waste, water, education and health facilities will be able to meet their future needs.

Dublin has a strong potential to develop as a knowledge city, but needs Government actions to produce an environment that nurtures city and regional growth. A number of steps must be taken, including a review of the R&D tax credit scheme, implementation of the Strategy for Science, Technology and Innovation and more concerted action to develop a vibrant 4th Level and increase the number of postgraduates engaging in research. In particular, we believe that a detailed implementation plan is required for the Strategy, indicating how it will ensure greater co-ordination between the agencies involved.

Summary of Recommendations

- The rate of growth of gross non-capital supply services expenditure should not exceed that of the nominal rate of GNP growth in 2007 and 2008. This would indicate an increase of 8-9% in 2007.

- Capital spending should be ramped up from the present level of below 5% of GNP to 6% of GNP by 2008, with appropriate measures to ensure efficiencies and value for money.

-  Government should reconsider its goal of decentralisation. The €1bn capital spending programme planned by the Office of Public Works should be redirected towards the primary roads programme and strategic non-national roads.

-  Government should prepare other multi-annual capital programmes along similar lines to Transport 21.

-  The EU target for R&D expenditure of 3% of GDP by 2010 should be set for Ireland. The existing Government target of 2.5% of GNP by 2013 lacks ambition.

-  The implementation of the Strategy for Science, Technology and Innovation should seek to simplify the administration of the range of R&D funding schemes, and rationalise the number of agencies, involved.

-  ‘Innovation Vouchers’ should be made available to small businesses in every sector, which can be exchanged for advice, expertise and information from accredited knowledge providers.

-  Central Government should pay the full economic cost of providing domestic services through Local Authorities.

-  The 12.5% rate of corporation tax should be maintained.

-  The Business Expansion Scheme should be renewed with limits of €300k for individuals and €5m for companies.

-  The decision to abolish the indexation of capital gain tax should be reviewed.

-  The R&D tax credit scheme should be amended to improve the number of firms taking up the scheme.

-  Government should examine PC penetration schemes that have been put in place elsewhere with a view to introducing a scheme.

-  The application of Benefit in Kind to childcare funded by an employer should be reviewed. Government should consider a scheme to promote flexible work hours through reductions in employers’ PRSI.

-  The VAT on legitimate corporate expenditure in hotels and restaurants for conferences, incentive travel and corporate meetings should be refundable.