Building the Nation’s Capital Stock
In seeking value for money, we must also build up our capital stock to improve our competitiveness and help the economy to develop and expand. This is vital if we want to lay the platform for future growth and good quality employment. I am today providing some €43.5 billion for capital investment over the period 2006 – 2010 of which €38 billion is Exchequer funded and €5.5 billion is PPP funded.
This will also support strategic improvement in our education sector to deepen and widen our store of human capital; major improvements in health facilities; a very significant programme of social and affordable housing; and important new initiatives in the arts, culture and leisure aspects reflecting our development as a mature economy and society.
Third Level Investment
I mentioned earlier that any budget represents a moment in time on where we stand economically and where our priorities should be in light of the prevailing fiscal conditions. I referenced too the particular focus I want to give to education.
Many of those – both in Ireland and more particularly externally – who have commented on our economic success tend to attribute a disproportionate amount of the cause to our taxation policy. Clearly this has been beneficial to attracting inward investment. However, it is my belief that the single biggest contributor to our economic success has been the exceptional wealth of intellectual capital available to both our indigenous and overseas investors. Ireland has become synonymous with the quality of our graduates.
The investment in and reform of primary and secondary education through the sixties and seventies with the support of 3rd level in its wake has been pivotal to what has been achieved in Ireland over the past 15 years. That job is continuing and we will continue to deal with very real needs across both the primary and secondary levels.
The basis for future growth and prosperity is investment in the knowledge, skills and innovation capacity that will drive economic and social development in an increasingly competitive global environment. The higher education system must deliver people who will expand knowledge-based business located in Ireland. This will require substantial change and quality improvement in universities and centres of higher learning and the promotion of system-wide collaboration that can draw on the collective strengths of these institutions.
A major initiative within this Budget is a commitment to the establishment of a new Ph.D. level of education, a fourth level. Earlier this year my colleague the Minister for Education and Science signalled the Government’s intention to create a multi-annual Strategic Innovation Fund for higher education. To achieve what we have to achieve will require a commitment to substantial change in all our 3rd level institutions. We must strip out unnecessary duplication. There must be an appetite from within the sector itself for greater collaboration. This is a small country. It is not sensible to have our 3rd level institutions pitched against each other across all key disciplines. Instead what we need is the promotion of a system-wide collaboration that can draw on the collective strengths of all of our 3rd level institutions.
I am confident that such a commitment will be forthcoming. It must be if we are to deliver the required complement of people with Ph.D. level qualifications or 4th level Ireland. We are competing in a global world and to compete and to retain the strength of our ‘offer’ demands an investment in the knowledge, skills and innovation capacity of this nation. Our edge in education is being challenged not just by the established sources of excellence but also by emerging nations across the globe. This Government believes such a programme is fundamental to our economic and social development.
This then is a major plank of this Government’s policy. I am therefore announcing the allocation of €300 million to the Strategic Innovation Fund for higher education over the next five years. Competition for the new funds will stimulate excellence through collaboration and change. Details of the administration of the Fund will be announced by the Minister for Education and Science over the coming days.
In addition, it is essential that investment in modern facilities is maintained in university and institute of technology campuses around the country. As a result, we are committing €900 million to the 3rd level sector over the next five years as part of the Department of Education and Science capital envelope. Of this €630 million will be exchequer capital funding and €270 million PPP funding. The physical development will have to reflect the changed approach where there must be greater co-operation between the institutions involved.
This brings planned investment in capital spend and the Strategic Innovation Fund for 3rd level to €1.2 billion over the period 2006 to 2010. These strands of planned investment in higher education form a core element of the Government’s strategy for developing skills and competencies. This will be an important element of the investment strategy for the new National Development Plan.
National Development Plan 2000-2006
Under the current National Development Plan there have been unprecedented levels of investment in our economic and social infrastructure. This investment is delivering real outputs which are improving the quality of life for our citizens.
- Investment in roads will see the completion of over 70 major schemes by the end of the Plan with a major focus on new Motorway and Dual Carriageway Roads linking key population centres.
- We have significantly enhanced public transport in the Greater Dublin Area through investment in suburban Rail, Dart, Quality Bus Corridors and the LUAS, a totally new fixed line system with a capacity of 20 million passengers per year.
- We have reversed years of neglect of our National Rail System by investing €655 million in making our national network safe.
- Investment in social and affordable housing by the end of the Plan will have delivered some 56,000 new units.
- Our NDP investment in Childcare will have created about 30,000 new places by end 2006.
There have been other major enhancements in the quality of infrastructure in areas such as water services, broadband, education and health.
Transport 21 was launched a month ago with a ten year roll out horizon and a €34.4 billion investment cost. This is an unprecedented commitment on the part of the Government and recognises the importance of a world class public infrastructure in securing the competitiveness of the economy and enhancing the economic and social gains made in this country since 1997.
Today’s Budget underpins that commitment and sets out the capital funds allocated to transport over each of the next five years. Next years allocation will get Transport 21 off to an excellent start. 2006 will see the continued roll out of the motorway programme and construction of more bypasses across the country. Work will begin on the building of a new Docklands railway station and the Kildare rail route upgrade. New rolling stock will be delivered and there will be further investment in regional airports. Work will also commence on the Cherrywood Luas extension. Planning and design work on the Western Rail Corridor will get underway as the start of the process leading to its reopening. Planning of other major transport infrastructure projects will also be advanced. In addition, the new transport authority will be established to implement Transport 21 in the Greater Dublin Area and critically to ensure joined up thinking and the delivery of projects on time and on budget.
National Development Plan 2007 – 2013
The next National Development Plan, which will cover the period 2007 to 2013, will set out a coherent and integrated strategy for investment in economic and social infrastructure. This will be done within a framework of budget sustainability and will be informed by key objectives of enhancing national competitiveness and promoting better balance in regional development. My Department will shortly commence a major consultation process on the next NDP.