In next month’s budget, an additional €3 billion will be allocated to enhance infrastructure for housing construction, as indicated by the Minister for Finance, Jack Chambers. The fund will also be used to upgrade water and energy facilities. The announcement is made amidst increasing multinational sector worries concerning inadequate infrastructure and severe housing scarcity.
The said budget will be obtained from the Irish Strategic Investment Fund, maintained by the State’s investment managers and financed by the revenues of bank shareholdings, which the State acquired during the bailout of Irish banks from the financial crisis.
Moreover, the government faces mounting pressure from influential multinational sectors to utilise the €14 billion Apple profits to boost economic capacity, thereby promoting further growth.
Minister Chambers, who took office as Minister for Finance in June and is currently drafting his inaugural budget, referred to the calls to expend the €14 billion ensuing from the Apple tax case as “imprudent”. He also noted that Ireland’s taxation model generates a “small Apple annually in surpluses.”
In addition, Mr Chambers confirmed that there is no ongoing investigation into Ireland’s tax matters by the European Commission.
Mr Chambers expressed apprehension about some recommendations made by ex-European Central Bank head, Mario Draghi, in a recently published report about the European Union’s future. Draghi advocated for a novel approach for the EU to conserve its prosperity amidst the challenges of a transforming world likely to be characterised by rivalry between China and the USA on all levels.
According to Mr Chambers, plans to lift limitations on State aid aiming to boost strategic industries could result in an unfair competitive advantage for Germany and France. He added that while the UK Government will object to these proposals, they recognise that a significant change in the European Union’s approach may be on the horizon. Consequently, he stressed the UK’s need to adapt their business and industrial policies in line with these changes.
In the coming weeks, the foreign direct investment industry insiders intend to emphasise to the government that prioritising infrastructure development is pivotal. Concerns have been expressed about the Government’s ability to successfully plan and execute substantial projects across sectors like energy and water. One industry expert proposed that any unexpected financial surplus should be invested in pre-existing plans to improve competitiveness.
This perspective is shared by certain members of the Cabinet, who argue that the government should commit to investing a significant portion of any financial windfall into infrastructure, designating specific areas where these funds will be utilised. This approach, they believe, would reassure multinational corporations that their future requirements will be met.
One Cabinet member indicated the need for a bold decision on whether to utilise these funds on areas that may not yield immediate returns, but are crucial for long-term growth.
The growing competition from the Middle East and even within Europe for investment is another concern. These regions are purportedly using subsidies to lure investment, with other jurisdictions gaining ground in areas where Ireland once held a clear strategic lead.