Significantly increased infrastructure investment — starting in next month’s budget — is needed in order to avoid much of the country, outside of the Greater Dublin area, being saddled with permanently-low growth levels.
That is according to the Construction Industry Federation (CIF), the main representative body for the building sector, which outlined its budget wish-list to the Government yesterday.
The body wants a help-to-buy scheme — where the Government takes equity in first-time buyers’ homes — introduced to help solve the housing crisis and key infrastructure projects like the M20 road linking Cork with Limerick (which it said could bring economic recovery to struggling rural communities) built.
“Without significant infrastructure investment, people will continue to migrate to Dublin and the budgetary measures to address the housing crisis may deliver housing into what may become unsustainable ‘ghost’ communities.
"The CIF is proposing that any housing policy, under consideration by Government, should coincide with increased expenditure in national infrastructure investment,” CIF director general Tom Parlon said.
“We are predicting that the low level of infrastructure investment, across the country, will be the next crisis Ireland faces,” he added.
Elsewhere, while not expecting any huge tax changes in the budget, accountancy giant Deloitte has urged the Government to conduct a full strategic review of the country’s corporate tax regime in order to remain attractive to inward investors.
“Ireland should be open to taking bolder moves, particularly given the potential corporate tax strategy that the UK may pursue in a world post-Brexit,” said head of tax Lorraine Griffin.
“Ireland has one of the highest effective marginal tax rates internationally, with personal tax rates of over 50%, and with high rates kicking in at a relatively low level.
“This significantly reduces Ireland’s ability to attract highly-skilled and senior-level individuals.
“The Government should focus on reducing the marginal tax rate for all taxpayers below the 50% rate and introduced additional incentives to attract talent to Ireland,” she added.
Deloitte said it doesn’t expect any significant changes to foreign direct investment (FDI) in the budget, but “would welcome some commitment” by the Government to increase its focus on Ireland’s offering as a location for FDI.
“We would expect the Government to initiate a consultation process in relation to the implementation of the EU anti-tax avoidance directive,” it added.
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