A chronic lack of government investment in essential infrastructure and services poses a real threat to economic growth and stability, according to Social Justice Ireland.
Persistent underinvestment in areas such as housing, health, child care, and rural broadband and education is impacting the competitiveness of the country as an economic pickup begins to take hold in some parts of the country.
The think-tank’s 2016 socio-economic review advocates the allocation of greater resources to achieve the dual goals of improving the country’s business and social environments.
“Ireland’s ranking in global competitiveness has declined,” said Social Justice Ireland director Seán Healy. “A major factor in this decline is related to under-investment in state-funded areas: education; research; infrastructure; and broadband connectivity leading to a decline in the technological competitiveness of the economy. Increased, targeted and efficient government spending is a priority if Ireland is to prevent further decline.
“Substantial investment over a protracted period is required if Ireland’s social and physical infrastructure deficits are to be addressed. Such investment is also required given the demographic changes the country faces in the coming decades as the population grows and ages.”
The review outlines five key action areas it is encouraging the next government to prioritise. These include: ensuring macroeconomic stability; strengthening social services; an increase in the overall tax take; good national governance; along with environmental sustainability and regional development.
National objectives such as reaching full employment, providing adequate housing and social services and investing in infrastructure are not feasible given funding levels, the independent body argues.
The document argues Ireland should remain a low-tax economy, but not one incapable of adequately supporting the economic, social, and infrastructural requirements necessary to support our society and complete our convergence with the rest of Europe.
Consequently, the overall tax take as a proportion of GDP should be increased in the coming years as opposed to cut as envisaged in last year’s budget. Social Justice Ireland believes policy should focus on increasing Ireland’s tax-take to 34.9% of GDP.
The Department of Finance puts this figure at 30.5% in 2014 and forecasts year-on-year falls to 28.5% by 2021.
“The next government must launch a substantial public investment programme,” said Michelle Murphy, Social Justice Ireland research and policy analyst.
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