The Minister for Finance, Brian Lenihan, TD, was guest of honour at the annual dinner of Waterford Chamber of Commerce on Friday night last. While some expected him to be negative, he expressed much hope for the future stressing that the current crisis must be worked through in the correct manner.
Minister Lenihan also voiced some positive views on the Waterford Institute of Technology upgrade agreeing that it was growing through a process and those close to the WIT camp seemed pleased with what he said. The Minister pointed out the financial difficulties that pertained at present but noted that the university plan had not been blown off course by the Department of Finance. Mr Lenihan said he understood that education was a hub for development and all that was involved.
Minister Lenihan said his goal was to foster more investment and we were not going back to the difficult times of the 20s and 30s nor the 80s but there was a new realism out there at the present time.
In his speech, the Finance Minister said the last few months had been a very difficult period both for the Irish economy and the World economy. Here in Ireland, we could no longer be in any doubt about the gravity of the economic and fiscal challenges that confronted us, a reduction of tax revenues, a substantial increase in unemployment and a fall in economic activity.
He said we must confront the most difficult and gravest situation we had seen for a generation. We had surmounted even graver problems in the past and we could do so again but there could be no room for complacency.
He continued: “Tough decisions on Government spending have already been taken and a rigorous control of public expenditure will have to be maintained into the future. We have to prioritise Government expenditure and investment to areas which will make the greatest economic return and help us to turn the economic situation around. We have to continue to ensure that Ireland is a business friendly environment.
“Throughout 2008, the world financial system has been in turmoil. The US domestic mortgage crisis has spread and the ensuing credit crunch has had serious implications. Many national banking systems, including Ireland’s, have come under pressure due to the credit crisis. Many banking systems have had to be assisted by way of Government nationalisation, guarantee schemes and, in some cases, mergers.
“Last September, our Government took the correct decision with firm and decisive action both in relation to the guarantee on deposit savings and the guarantee arrangement to safeguard the financial system in Ireland. It was essential to ensure that confidence in Ireland’s banking sector was retained and the image of Ireland as a place to do business was maintained.
“The deteriorating global and domestic economic situation has led to a contraction in the construction sector in Ireland with a consequential and regrettable loss of employment resulting in reduced tax revenues. A vibrant construction sector directly and indirectly contributed significant sums each year to the Exchequer in employment taxes, capital gains tax and stamp duty. That income source has fallen significantly and the Government is faced with both lower tax revenue and additional public expenditure pressures. This is the reality of the public finances deficit.
“The ensuing lack of confidence has caused difficulties for businesses which has been evident in recent times through falling retail sales. This also further aggravates the Government revenue position and makes it even more vital that tough and decisive Government action is taken to control the situation.
Stark and sobering
“The most recent forecasts from my Department are stark and sobering: GNP will fall by 1% next year, with GDP falling by ¾%; unemployment will continue to rise to an average of 7.3% for 2009 as a whole; inflation will ease to 2.5% on average and the recent easing of interest rates will also ease the economic pressures which this economy is under.
“A further reason for optimism is that Ireland continues to attract a disproportionately high amount of Foreign Direct Investment into the EU. The IDA is optimistic about our prospects in the coming year. FDI has played a critical role in our economy and we must continue to provide an attractive investment location for investors into the future and look also to indigenous enterprise as an engine for economic growth and job creation for the future.
“Notwithstanding these positive developments, government action is crucial. The government is determined to protect the economic gains made in recent years by stabilising the public finances and restoring the economy to normal growth levels as soon as possible and restore confidence in the economy over the next three years.
“The reality of the financial situation in which we find ourselves means that hard choices had to be made in the national interest, it is time for all sections of our society to pull together and play their part. The choices required are how to spend scarce resources and to ensure that only those projects and programmes which are most essential to our economic recovery are funded.
“The principal pillars of the Government’s strategy for tackling the severe economic challenge Ireland faces and positioning Ireland to take advantage of a global economic recovery are to support budgetary sustainability and enhance the environment in which business operates. But we must also make the investment in infrastructure that will support Ireland’s economic development into the future.
Investing in Waterford
“Waterford’s role as a Gateway is reflected in the substantial level of capital investment undertaken and planned”, stressed Minister Lenihan. “In the transport area, work continues on the N9/N10 Dublin/Waterford Major Interurban Route due for completion in 2010. The total length of this interurban route amounts to 110kms with total investment of over €1.2 billion. The Carlow bypass stage has already been opened.
“Work continues on the N25 Waterford City Bypass being delivered by Public Private Partnership. When completed in 2010 it will include 23 km of High Quality Dual Carriageway and a River Suir bridge crossing of approximately 475m length which will reduce traffic significantly in the City area.
“Improvements in Public Transport include new bus services implemented on the Waterford City to Loglass route which will shortly be extended to Carrickpherish and a high frequency service in operation on the John’s Park to City Centre route.
“Over the past decade, Irish Rail has invested over €54 million on the Dublin to Waterford line. Waterford-Dublin services are set to benefit from a record €402 million order for 183 new trains for the national Intercity network under the Transport 21 investment programme.
“These new Intercity Railcars entered service on 5th August 2008 on the Dublin – Waterford line and the new fleet will deliver quality, comfort and frequency improvements on the route, with Intercity services due to operate every two hours all day on the Waterford-Heuston route. The Automation of approximately 18 level crossings on the Waterford line will be completed in 2008 at a cost of over €11 million.
“Major waste water schemes include the Dungarvan and Tramore Sewerage Schemes which were recently completed at costs in excess of €55 million. The East Waterford Water Supply Scheme costing €22 million is nearing completion and will ensure the future water supply for the city and the east of Waterford county.
“In the city, the Waterford Sewerage Scheme costing over €54 million is also nearing completion, while the City Council has recently awarded the contract for the North West City Water Supply Scheme.
“Regarding education, since 2005, five major refurbishment and extension projects have been carried out in primary schools in Waterford at SN Mhuire Baile Mhic Gonair, Ballyduff NS, Scoil Lorcain, St Paul’s Junior School, Lisduggan and Gaelscoil Portláirge. A further major project at primary level is currently under construction at Ballyduff NS and a post primary project, Bunscoil Bhóthar na Naomh, is preparing to proceed to tender.
“In the same period, five projects have been carried out under the Small Schools Scheme and nine projects have been carried out under the Permanent Accommodation Scheme. A further 21 projects have been carried out under the Summer Works Scheme. This level of investment demonstrates the Government’s commitment, both to Waterford itself and to enhancing Ireland’s productivity and competitiveness overall”, said Minister Lenihan.