Latest news with #National Development Plan
Irish Times
2 days ago
- Business
- Irish Times
State set to devote extra funds to big projects, but where is the money coming from?
When the Government publishes its key economic documents on Tuesday, the natural focus will be on where the extra investment is being targeted. A key question involves additional resources being devoted to projects in housing, water, energy and transport in the revised National Development Plan. What will this mean for other parts of the budget and where is the money going to come from? We should get some clue from the second major document, the Summer Economic Statement (SES), which looks at the outlook for the budget. Here, the key question is whether extra spending has left less room for day-to-day supports and tax reductions to be factored into the budget. The SES will give some indication of room for manoeuvre in the budget – in other words, what the package on the day will cost. The budget ministers, Paschal Donohoe and Jack Chambers , are likely to indicate that less money is available this year. READ MORE David McWilliams on how 'big incentives' to build could save Dublin city Listen | 36:51 They are also likely to repeat the assertion that there is no cost-of-living package this year. How both of these commitments survive the run-up to the actual budget remains to be seen. A key issue to watch for concerns budget overruns and whether the Government is going to take action to stop them happening this year. The Irish Fiscal Advisory Council, the budget watchdog, has said that the spending allocations for this year were flawed from day one, because they failed to build in overruns in 2024. With the council estimating overruns of €2 billion-plus this year, does the Cabinet plan to rein these in? And what does it mean for 2026? The goal of keeping spending growth to 5 per cent a year, set in 2021, was quickly consigned to the dustbin. So, what will now replace it? Or is it just a case of spending whatever cash is available every year?
Irish Times
6 days ago
- Business
- Irish Times
Green Party leader calls on Government to retain funding of key climate projects
With Ireland struggling to meet its emissions reduction targets, Green Party leader Roderic O'Gorman has said the Government must retain funding of key climate projects flagged under the new Infrastructure, Climate and Nature Fund (ICNF). As a revised National Development Plan (NDP) is finalised over the coming days, and combined with the ICNF, which is due to come into operation in 2026, Mr O'Gorman echoed concerns climate spending may be rolled back in the context of a tightening fiscal scenario. 'With recent information from the Environmental Protection Agency showing Ireland struggling to meet those targets, it is essential that the Government allocate every cent of this fund to climate measures,' he said. The last government agreed €3.15 billion would be spent under the ICNF over the next five years, including on energy efficiency and the scale-up of district heating. READ MORE Minister for Climate, Energy and the Environment Darragh O'Brien on Thursday announced Ireland's first dedicated development funding scheme for district heating, committing €5 million to support early-stage projects. It is designed to prepare 'qualifying projects for subsequent capital support through the NDP'. The Irish District Energy Association (IrDEA) welcomed the move as a critical milestone in the transition to low-carbon, locally produced heating systems. District heating systems use insulated piped networks to heat residential homes and public buildings and provide hot water. They provide cheap, clean energy – using excess heating from industry including data centres and waste-to-energy plants and are considered critical to decarbonising the built environment. 'This is a hugely significant step for sustainable heating in Ireland,' said IrDEA chief executive Pauline O'Reilly. 'Heating is the largest contributor to carbon emissions in the Irish energy sector. District heating can address this at scale by distributing clean, locally-sourced heat to residential, public and commercial buildings.' [ Two thirds of Irish households would benefit from low-cost district heating, study finds Opens in new window ] A range of interests from local authorities to utilities and private developers are working closely with anchor institutions such as hospitals and universities to develop viable district heating schemes, she said. 'This marks the first time in the history of the State that a national funding scheme has been created specifically to advance district heating.' IrDEA chairperson Dr David Connolly said: 'In time to come, this will be looked upon as a key ingredient to set the foundations of Ireland's newest utility, and one which has huge potential to decarbonise towns and cities across the country.' Without scale-up of district heating, 2030 climate targets would not be met, he added. The department has estimated between €2.7 billion and €4 billion is required to meet district heating targets set in 2023. 'District heating is an obvious measure to support – using waste heat from industrial processes to provide heating to public buildings and family homes,' Mr O'Gorman added. 'It will save people money, and lower our emissions. We see it working in a scheme in Tallaght already. But it does need start-up financial support to put in the pipe network to allow heat be shared.' [ Is this Government serious about climate action? We'll soon know Opens in new window ] Mr O'Brien said he was strongly supportive of district heating 'and the opportunity it presents to both decarbonise Ireland's built environment, improve heating systems and use excess heat from large energy users'. The Minister added: 'While the NDP remains under negotiation, it is my firm intention that funding will be available over the coming time period to support district heating. Furthermore, I am making funding available now to support district heating projects progressing through initial feasibility stages [and] have committed to enacting the Heat Bill to provide for a policy and legal framework.'
Irish Times
15-07-2025
- Business
- Irish Times
Rein in spending to cut reliance on ‘volatile' corporation tax, Ibec says
Business lobbying group Ibec has called on the Government to reduce the growth of public expenditure in an effort to reduce the State's reliance on 'volatile' corporate profit tax receipts. The lobbying group said the positive status of the State's headline economic markers are largely funded by corporate tax, which its chief economist Gerard Brady said could be 'volatile' over the coming years. Ibec suggested a maximum net spend on budget day of €3 billion, with increased exchequer spending offset by fiscal drag and €1.3 billion made up of commitments under the National Development Plan. [ Ireland's corporate tax receipts hit €156bn Opens in new window ] Ibec pointed to figures showing that, should Ireland collect a level of corporate profit tax comparable to similar economies, every worker in the country would have to pay an additional €4,000 in taxes to make up the State's current tax revenue. In light of the reliance of the State's balance sheet on corporation tax, Ibec called for the Government to rein in spending increases in the coming budgets to 'return to a balance of income over expenditure, were our corporate tax receipts to be realigned with other mid-sized globalised economies'. The lobbying group said the gap stands at around €5 billion, and Mr Brady noted that recent US policy is adding to the economy's exposure to volatility with the State at risk of being left 'very short' on tax receipts should that risk materialise. Mr Brady said the Government could 'correct, fairly painlessly, the underlying budget deficit' over a number of years and would avoid 'more painful' measures in the future. He said the business community's biggest concern is of a 'sharp correction' in Government policy should that 'volatility be materialised'. Asked whether it supported Government indications that cost-of-living measures would not be needed in the Budget, Fergal O'Brien, Ibec's head of lobbying and influence, said the group was against 'universal supports'. 'We shouldn't be doing across-the-board, universal supports – it is just really bad economic policy,' Mr O'Brien said, urging the State to target distressed households and reduce the cost of business. [ The EU/US tariff deal: The good, the bad and the potentially ugly for Ireland Opens in new window ] Ibec also called for 'targeted supports' for industries hardest hit by US import tariffs, such as the the spirits industry, where Ibec noted more than 90 per cent of distilleries had paused or cut back production. Mr Brady said that some sectors would be placed under 'existential pressure' should the level of tariffs rest at 20 or 30 per cent. The lobbying group noted that their members have been 'very vocal' in raising 'a lot of concerns' about the EU's countermeasures in response to US tariffs. One measure Ibec suggested to reduce costs to businesses and households is reducing the fixed cost component on Irish energy bills through a 'strategic annual subvention'. The group also suggested indexing the top tax band and income tax credits to wage growth at a cost of €440 million and €240 million respectively. Amid economic turmoil, Ibec called on the Government not to reduce infrastructural spending, and to introduce a set of spending targets in the upcoming 2026-2029 medium-term fiscal plan. These include a fiscal investment target of 5 per cent of gross national income (GNI), and working towards increasing public investment in research and innovation to 1 per cent of GNI by 2035. To encourage homebuilding, Ibec called for the reduction of VAT to 5 per cent and the removal of Government levies on new-build apartments – which it said would 'improve the viability of apartment building'.
