CIF says €2bn capital cut would hit 55,000 jobs

THE Construction Industry Federation (CIF) yesterday wrote to the Government claiming 55,000 jobs would be put at risk in the industry if reports were correct that capital investment was to be cut by €2 billion.

In the letters to Taoiseach Brian Cowen and Finance Minister Brian Lenihan, the CIF said infrastructure spending must be prioritised in next week’s budget.

It also published a 10-point economic plan aimed primarily at resuscitating the ailing construction industry. Among those points were:

nA tax credit scheme to encourage first-time buyers to purchase empty unsold houses, thereby releasing the e1.2bn tied up in the properties.

nStamp duty on transactions of residential property to be halted until 2010 and on commercial property for the duration of 2009.

nReduce the costs of PRSI and PAYE contributions for employers during the next year.

nRemove cap on tax deductibility for charitable donations.

CIF director general, Tom Parlon, said: “The budget has to balance the need to stabilise the public finances with the absolute imperative of saving jobs. The CIF’s 10-point economic plan would cost the Exchequer nothing and in reality would generate significant revenue flows.”

Meanwhile, in its budget submission, the Irish Business and Employers Confederation (IBEC) has sought, amongst other things, a 3% reduction in social welfare rates in line with the reductions in the cost of living. It claimed that move would provide the economy with savings of €400 million in 2009.

That will prove controversial with unions in the social partnership talks.

Earlier this week, Irish Congress of Trade Unions general secretary David Begg said getting any guarantees on the social welfare rates was problematic, and he was seeking guarantees from the Government that it “would not go there”.

IBEC said its package of savings would be worth e3bn to the economy.

It sought increases in the income levy for 2009 only to raise e1.2bn in extra taxes, and a 9% reduction in current expenditure, including the pay and pensions bill, to save e2.1bn over the rest of this year.