Taoiseach, Tánaiste, Ladies and Gentlemen

Introduction

I am very pleased, as Minister for Finance, to launch the National Development Plan 2007-2013. This Plan is a fully costed 7 year blueprint to transform Ireland and create a better quality of life for all.

Baineann an Plean Forbartha Náisiúnta seo le todhchaí ár ndaoine óga, lena dtuismitheoirí agus lena sean-mhuintir. Leagann sé amach bunphlean do fhorbairt gheilleagrach agus shóisialta ar an oileán seo le haghaidh na nglún atá le teacht.

Sa Phlean seo, tá deis iontach againn chun an gnó a dhéanamh i gceart: i dtaca le pleanáil spásúil, le bonneagar tacaíochta, le hinchothaitheacht an chomhshaoil agus le fás eacnamaíoch.

Ag deireadh an Phlean seo, is cuma cá mbíonn cónaí ort in Éirinn, i mBaile Átha Cliath, i lárionad uirbeach tairsí, i mbaile contae, nó i gceantar tuaithe, is féidir leatsa, le do chlann, le do thuismitheoirí agus le do gharchlann, bheith ag súil le cáilíocht bheatha níos fearr i gcomhshaol inchothaithe laistigh de gheilleagar agus de chomhluadar sóisialta atá forásach fuinniúil.

Background

This is the fourth National Development Plan since 1989. When the 1989 Plan was launched unemployment was 15%, the National Debt was 107% of GNP and we experienced net emigration of some 208,000 in the 1980s. By contrast the backdrop to the current Plan is virtually full employment, a debt/GNP ratio of 25% and a population increase of almost 609,000 over the last decade.

The three previous National Development Plans, funded in significant part by EU Structural Funds, have played a significant role in this remarkable turnaround. Investment under these Plans, especially in employment creation, training, education and in infrastructure combined with other successful economic, budgetary and taxation policies and underpinned by the Social Partnership process, helped transform the economic climate into the excellent situation we enjoy today.

A new National Development Plan is not necessary to draw down the very limited Structural Funds available to Ireland up to 2013. Some might argue that given the evident strength and resilience of the economy we do not, in fact, need a new Plan. The Government profoundly disagrees with this view.

Despite our economic success, a medium-term economic policy and investment framework is required so that we can, to the extent that we have control, maintain and build on our current strong position. We also face new challenges, many of them the challenges of the very success we have enjoyed and which must be tackled within the medium-term framework provided by this Plan.

This new Plan has therefore been put in place because:

Firstly, we need a published, comprehensive, coherent, costed and integrated investment blueprint that sets out clearly how we will deliver sustainable economic and social development into the future thereby improving quality of life for all our citizens.

Secondly, we need to send a strong signal to private sector investors, both indigenous and international, that Ireland has a comprehensive blueprint for investment in areas that influence their decisions such as infrastructure, training and education of people, and research and development; equally Departments and Implementing Agencies need medium-term policy and financial frameworks within which to rollout projects and programmes.

Thirdly, we need to invest in a strategy that can address the regional imbalance in our economic development, promote environmental sustainability and underpin ever greater co-operation throughout the island.

Finally, we need to show taxpayers that there is a Plan in place which involves spending the resources which their hard work generates but which will deliver Value for Money outputs in the areas that impact positively on their quality of life.

Economic and Strategic Context

The Plan being launched today involves an estimated expenditure of €184 billion over 7 years. This is a very substantial level of investment involving in particular a major acceleration of Government Capital Investment from 4.7% of GNP in 2006 to 5.9% in 2009 and an average of 5.4% over the Plan period.

This investment will be delivered within the framework of economic and budgetary stability and in full compliance with the requirements of the EU Stability and Growth Pact over the Plan period. It is based on an assumption of annual average economic growth over the period of 4-4½% and it is affordable on that basis.

The Government is strongly of the view that the period to 2013 represents a major window of opportunity in resource terms to tackle, in particular, our infrastructure deficits before other expenditure pressures such as Health and Pensions appear more intensively on the horizon. At present Ireland has six persons of working age for every older person. This will gradually disimprove over the medium-term so that by 2050 we will have ratio of just two to one. The implications of this are that public spending on pensions, health and long-term care in Ireland will increase from some 10½% of GDP in 2004 to almost 20% of GDP in 2050.

It is incumbent on any responsible Government to take account of these factors in their economic planning. Thus we must, over the period of this Plan, use our favourable demographic situation to boost the productive capacity of the economy. We will do this through the investment programmes in the Plan so that longer term our economy will be ever more productive to meet the long-term challenges.

Basis and Content of Investment

I would now like to briefly set out the key elements of Plan investment as well as dealing with cross-cutting policy issues which the Plan is seeking to address. It is important to note that the Plan was the subject of extensive consultation involving submissions from, and, in some cases, meetings with, many of the interests represented in this room. I believe that the level and composition of investment in the Plan shows that the Government has taken full account of these important views.

It is also important to acknowledge that the Plan was not drafted in a policy vacuum. It therefore takes account of established policy, including commitments under Towards 2016, but, crucially, sets out a new multi-annual integrated blueprint for the implementation of this policy.

The Government commissioned a study by the Economic and Social Research Institute on the investment priorities for the Plan. This study mainly focused on capital investment and was a valuable input into the Government’s consideration of Plan investment.

The Plan accords with the prioritisation recommended to capital investment by the ESRI, notably in areas such as Transport. The Government is, however, strongly of the view that the quantum of investment required over the period is considerably in excess of that recommended by the ESRI. Accordingly, Central Government investment under the Plan is some €2 billion per annum higher than that recommended by the Institute.

This decision was based in brief on the following factors:

• The evident need to decisively tackle infrastructure deficits in economic areas such as transport and in social areas such as housing;
• The demographic projections which estimate a population of in excess of 5 million in 2021 with all regions showing significant increases;
• The window of opportunity in resource terms now available as I referred to earlier; and
• The economic rate of return on infrastructure investment. 

We are conscious of concerns expressed as to the inflationary impact of accelerated levels of capital investment. The Government believes that the construction industry has the capacity and flexibility to deliver the increased investment without causing an inflationary impact as occurred at the outset of the previous Plan. Notwithstanding very high levels of construction activity in recent years, annual tender price inflation has remained steady at around 3-4% per annum.

In addition, lessons have been learned from programme and project management problems which surfaced in the early part of the previous NDP leading to some programme overruns and some outputs behind Plan target. Key implementing agencies such as the National Roads Authority and the Railway Procurement Agency have had significant enhancement of resources and are now well geared to deliver the programmes and projects in the new Plan. Recent experience, especially in relation to the key Transport area is very positive in this regard.

The Executive Summary which will be circulated with the Plan document sets out in detail the investment proposed under the Plan and I will outline now some key elements.

Economic Infrastructure

An investment of €54.7 billion is proposed for Economic Infrastructure. Key target outputs and objectives for this funding include:

• Completion by 2010 of the major inter-urban routes linking Dublin with Belfast, Cork, Galway, Limerick and Waterford;
• Significant enhancement of the Atlantic Road Corridor from Letterkenny through Sligo, Galway, Limerick, Cork and Waterford;
• Major expansion in rail capacity in the Greater Dublin Region including Metro to Airport and Swords and extension of Light Rail;
• Enhanced rail services outside GDA including new commuter rail services in Cork and Galway;
• 15% of electricity generation from renewable energy by 2010; and
• New North/South and East/West Interconnectors and significant ongoing investment in the electricity network

Enterprise, Science and Innovation

There will be a total investment of some €20 billion under this heading. Key target outputs and objectives under this heading include:

• A radical enhancement in the quantity and quality of Research & Development with a particular focus to ensure that such research can be translated into commercial products with resultant economic benefits;
• Investment in potential start-up and growth potential companies;
• Investing €800m in Tourism numbers to increase visitor numbers from 7.4 million in 2006 to 10 million in 2012; and
• Investment across a number of headings in Agriculture to assist farmers to be more efficient, promote environmentally friendly farming and an agri-food sector that can compete internationally.

Some €25.8 billion will be invested in the key areas of training and education. Key outputs and objectives under this heading include:

• Continuing upskilling of the workforce and improvement of employment prospects for groups such as lone parents and people with disabilities;
• A particular focus on providing new schools in rapidly developing areas including through proactive engagement on planning with Local Authorities;
• A comprehensive ICT programme for schools;
• Further increase in the numbers attending third level, especially from disadvantaged areas; and
• Delivery of 35 large scale capital projects in the third level sector by 2010;
• Implementation of major reform and modernisation programme in the third level sector assisted by the Strategic Innovation Fund.  

• Some €33.6 billion will be invested in the area of Social Infrastructure. Key outputs and objectives under this heading include:
• 60,000 new social housing units and 40,000 new affordable housing units;
• Investing in primary care to achieve a target of 500 primary care health teams by 2011 as committed to in Towards 2016;
• Expansion of range and quality of sports facilities throughout the country, including the Lansdowne Road and Abbotstown projects; and
• Investment in arts and cultural facilities countrywide, including a new National Concert Hall and a new National Theatre.

Social Inclusion

About €50 billion is provided as a multi annual financial framework for schemes and programmes to promote social inclusion. Key target outputs under this heading include:

• The creation of an additional 50,000 new childcare places by 2010;
• Progression towards the target of halving the proportion of children with serious literacy problems in primary schools serving disadvantaged communities;
• 7000 additional people with disabilities to be in employment by 2010; and
• An additional 550 teachers as language support for the integration of migrants; and
• €9.7bn for older people, both to support them living independently in their own homes, and, when they can no longer live at home in independence and with dignity, to support the provision of high quality residential care.  

The Plan sets out a strong framework and commitment to investment in the following key policy areas:

• Regional Development;
• Rural Economy;
• All-Island Co-operation; and
• Environmental Sustainability

Regional Development

The Regional Development strategy set out in Chapter 3 of the Plan will give a major impetus to the implementation of the 2002 National Spatial Strategy. Whilst recognising the importance of maintaining Dublin as Ireland’s International Gateway the Plan sets out an investment strategy for the development of the other 8 NSS Gateways with a view to ensuring better balance in economic development.

This approach is about a better quality of life for citizens in all regions including the Greater Dublin Area. A key element is developing sustainable urban and rural settlement patterns and communities to reduce distance people must travel to employment, services and leisure facilities and to maximise use of investment in public services, especially public transport.

The Plan sets out in Chapter 3 a list of investment priorities in each of Gateway areas. This will be complemented by appropriate planning and land use strategies to maximise the impact of these and other investments.

Gateways Innovation Fund

A special Gateways Innovation Fund is being established under the Plan to assist development of the Gateways in line with the NSS framework. An initial €300 million is being provided by the Exchequer for the years 2008-2010 from this Fund. This is intended to leverage significant additional funding from private sector and/or other parts of the public sector so that the total quantum of investment will be more significant than the Exchequer contribution. I envisage that the Fund will finance local infrastructure such as urban regeneration projects, transport initiatives, in addition to those under Transport 21, and quality of life projects. A key consideration will also be the existence of close co-operation between Local Authorities in Gateway Areas.

Rural Economy

The Regional Development strategy will not be implemented at the expense of the Rural Economy. Chapter 4 of the Plan sets out a general framework and key initiatives to develop the Rural Economy over the period of the Plan. The broad objective is to sustain the continuing process of growth and diversification in the rural economy through enhanced accessibility, communications infrastructure and activation of local development potential in areas such as local enterprise and services, tourism and the natural resource sectors.

Key Plan interventions that will assist the development of the Rural Economy include:

• The roll-out broadband in rural areas, particularly those areas where the commercial provision of broadband would otherwise be uneconomic;
• Investment in non-national roads and rural water services;
• The Rural Transport Initiative, the remit of which will be significantly expanded; and
• Investment under the LEADER and Rural Economy Programme to promote diversification of the rural economy.

Environmental Sustainability

It is clear that we face major environmental challenges over the period of the Plan and beyond. These include climate change, waste management and the maintenance and improvement of water quality. The Plan provides for investment of some €25 billion in programmes which will directly protect the environment. Of particular note is the fact that we are more than quadrupling public transport investment as compared to the period 2000-2006. This is complemented by the regional development strategy based on a land use strategy which is environmentally sustainable.

All-Island Co-operation

The Plan sets out a major new proposed framework for all-island co-operation. For the first time it contains proposals for significant Irish Government investment in North/South projects and initiatives for mutual benefit. The Government wishes to agree and implement these with the British Government and a restored Northern Ireland Executive in the period 2007-2013. The proposed investment, to be funded from the overall Plan funding envelope, can only be of great mutual benefit to both parts of the island. For example, under Transport 21, we are funding the enhancement of the southern section of the road linking Dublin and the Letterkenny/Derry Gateway. We are now signalling a commitment to a contribution to the northern section of this key route. We look forward to urgently progressing these initiatives in a co-operative way.

Value for Money (VFM)

The bulk of capital projects are now being delivered on or below budget and, in some instances, ahead of schedule. Building on this performance, all expenditure under the NDP 2007-2013 will be subject, as appropriate, to a robust Value for Money framework.

Key elements of this framework include:

• All projects will subject to project appraisal to ensure that NDP programme objectives and Value for Money are being achieved;
• All capital projects over €30 million will require a full cost benefit analysis in line with the Department of Finance guidelines of February 2005;
• New procurement arrangements which will deliver greater cost certainty for public capital projects;
• NDP Programme Evaluations and Value for Money and Policy Reviews will be published and submitted to the relevant Select Committees of the Oireachtas; and
• As provided for under the Budget and Estimates Reform proposals set out in Budget 2006, all Ministers will submit an Annual Output Statement with their Annual Estimates to the relevant Oireachtas Committee. This will detail target outputs for the Estimates and the following years’ Statement will set out achievements against target. This process will encompass Exchequer funded NDP spending.

This robust and transparent process will be augmented by the new requirement for the submission of an Annual Report on NDP progress to the Oireachtas where it will be subject to debate. Other factors such as the Strategic Infrastructure Act 2006 and extra judicial resources will also impact positively on Value for Money, delivery and implementation.

In summary, the National Development Plan which we are launching today is a major 7 year investment programme that has at its core policies to build a better quality of life for all the population, in every part of our country. This is not a plan without a context. It is part of a sequence of development programmes stretching back to 1988 which have driven the transformation of our country. As the economy has evolved, so too has the development challenge. Against a very different economic backdrop, earlier plans emphasised the need to create employment, to get our economy moving. That challenge has been met successfully and we now have one of the world’s most income-rich economies.

The recent scale of our prosperity and the pace at which our country is developing present new challenges. If we are to sustain the gains made, we must build on our success in creating a high income economy by investing in our public wealth. That involves committing unprecedented resources to our human and economic infrastructure in order to underpin our prosperity and enhance the quality of life of every citizen. That is precisely what this Plan seeks to achieve.

Sustaining our success and securing the gains already made is only possible if we rebalance our development to ensure that all the regions of this country can reach their potential. Lopsided economic growth which sees the capital and its hinterland as the primary driver of all activity is not in anybody’s interests, not least the interests of the people of Dublin and its surrounding counties. Balanced regional development is a pre-condition to sustainable national development. If we are to enjoy a high quality of life alongside and in support of a high level of national income, every region, every community must be able to reach its potential for success. It is vital to delivering a better quality of life for all.

The imperative of securing balanced development provided the backdrop to the National Spatial Strategy. That strategy provides the blueprint for the Plan which we are launching today. With the regional planning guidelines adopted and the Gateway needs studies completed and published, the NDP provides the specifics in terms of programmes and resources to implement the vision of the Spatial Strategy.

While the Plan will support economic growth and sustainable development over the decades ahead, it can only become a reality if the economy generates the necessary resources. Domestically, the success of the Plan’s implementation will be determined by the continuation of good economic and budgetary policies. A strong economy is the bedrock on which this Plan can be built. Without such a foundation, the Plan will fall by the wayside. That is why the Government is emphasising the importance of continuing the successful policies of recent years.

The National Development Plan represents the development channel for the realisation of the aims and objectives set out in Towards 2016. That agreement puts the citizen at the centre of all our concerns. This plan provides the resources which can make that ambition a reality to the benefit of all. However, achieving that ambition requires more than resources and planning: It requires hard work and a commitment to modernise. Social partnership has a major contribution to make in the realisation of this plan through implementing the reforms contained in the Towards 2016 framework agreement and thereby improving the delivery of public services to the citizens of this country. Change is always challenging. I look forward to working constructively with the social partners over the months ahead as the new National Development Plan is rolled out.

This plan addresses Ireland’s current development needs directly. It sets out a roadmap for the next phase of our country’s transformation and will deliver a better quality of life for all. Its implementation will help to secure our prosperity and make Ireland a better country, with stronger communities throughout the island. We have the plan, we have the resources. Now let’s get on with the work of improving quality of life for this and future generations.

Thank You