Press release

14 May 2020 Dublin, IE

Government needs to prioritise infrastructure spend

Infrastructure spending should be prioritised as the economy begins emerging from Covid-19

Infrastructure spending should be prioritised as the economy begins emerging from Covid-19, according to Shane MacSweeney, head of government and infrastructure at EY Ireland.

Not doing so will lead to a greater risk of economic, social and environmental problems, he warned.

"If we are sensible about how and what [the country] borrows money for, we will reap the benefits in a number of years time, and that's probably what we didn't do 10 years ago," Mr MacSweeney said.

"There's a whole host of reasons why we weren't able to do that," he added.

Since March 27 almost all of Ireland has been on full lockdown, however construction sites will be allowed to reopen from May 18, as economic activity starts to re-emerge.

Smaller projects that can be started quickly, such as road maintenance, should be among the first areas that are looked at, Mr MacSweeney believes.

One reason why capital spending should be emphasised is because under-investment, following the last financial crisis, has already led to problems including in the area of housing, he said.

Should the Government place emphasis on big spending projects, it will be a "real economic multiplier" for the country.

"Infrastructure tends to be quite construction employment intensive. Automatically you are getting people off the live register, you're getting them paying tax, and you're getting them spending in the communities, in shops and restaurants and creating that kind of rippling effect," Mr MacSweeney said.

In order to fund this spending, the Government should borrow more, he believes.

"We need to borrow and to prioritise capital expenditure. I think [markets] see us as the stable country," he said.

For more information, contact Eimear Rigby.