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Dublin needs to invest more in itself, not the rest of the country

The reality is that Dublin accounts for 40% of the nations economy and so it attracts an outsized proportion of its investment, writes Aaron McKenna.

Aaron McKenna

WHEN THEY WERE students, government transport planners were the type to reheat week old takeaways they found down the back of their sofas. The “announcement” of a €10.3 billion transport infrastructure investment for the greater Dublin area during the week is a homage to their days living on campus.

Metro North, DART spurs and Luas extensions were all lovely ideas when they were first proposed during the reign of Saint Bartholomew Ahern.

Both governments during the recession were guilty of cutting the arse out of capital infrastructure spending to preserve themselves from making truly tough decisions. There are very few strikes when new roads aren’t delivered versus tackling pay and pensions.

The perverse logic is that infrastructure spending tends to be some of the most productive that governments undertake, adding to economic prosperity over time and therefore helping to create the conditions for stable and growing government revenues.

Why does Dublin get the money?

Whenever new infrastructure investments are announced for Dublin in particular, there are hollers of dissent from the rest of the country. Dublin is always getting them fancy trams that are so complex to drive or those shiny new interchanges.

The reality is that Dublin accounts for 40% of the nations economy and so it attracts an outsized proportion of its investment. The city has also suffered an outsized impact from the investment crimp over the past eight years.

shutterstock_401107744 Source: Shutterstock/verastock

Dublin is the engine of growth that turns the wheels to move the rest of the country along. It is not the only productive centre, and there are strong arguments for always trying to divest economic activity.

In a small country, however, with a low population density it is always likely that the single urban centre with a population well in excess of a million people will have an outsized pull. The city is a net exporter of tax revenues, generating the cash that government transfers to less well off parts.

The economic crisis is dragging on outside the capital. Many parts of the country haven’t even began to recover. It is partially for this reason that government has had to continue to stifle investment to meet national deficit targets. By failing to invest in the engine of growth, however, we are prolonging the pain for all.

Commuters 

Transport is a signal example of this. When folks are trying to get to work the M50 and the arterial routes into Dublin and around it are car parks. The trains are beyond capacity. People are being forced further from the city by housing pressures and then their commutes are being elongated by traffic or lack of proper public transport.

This will reduce their effectiveness in work, and in aggregate it will slow down economic expansion.

The city is large enough to sustain itself and make decisions about what it needs, but it is stifled by governments that have other focuses. In one version of Fantasy Government Formation currently envisioned, a Healy-Rae would occupy a department for rural affairs.

shutterstock_373453237 Source: Shutterstock/POM POM

The Healy-Raes are extremely good operators who get elected for delivering what their constituents want rather than what the nation needs. We have had governments in the past that are guilty of this, and look set to get ones in the future that will not keep their eyes on the ball and invest in the capital to drive growth for us all.

As long delayed as many transport projects is the proposal that Dublin might have its own mayor. The proposal was shot down by the tight vote of a single council, but it arises time and again for a good reason: The city is being strangled by inattentive government and bureaucratic councils that are territorial in the extreme.

There’s a need for a strong local government 

Dublin needs a more federal model within the state. It requires a strong local government, headed by an elected and accountable mayor who can be hired or fired by Dubliners on the strength of delivery of the services needed to keep the capital going.

Furthermore, Dublin should be empowered to raise her own revenues beyond the tokenism of the property tax; which really passes through and is ultimately controlled by the hands of the Department of the Environment and Local Government.

It is not unusual to have cities with their own budgets, their own taxation – that is really controlled within the city – and their own power to raise funds on bond markets for investment into capital projects.

Give Dublin – and, indeed, other regions if they desire it – it’s own government, empowered with substantive revenue raising abilities and held accountable with strong but elected officials.

Otherwise the city will continue to face long term under investment in favour of short term political needs. The €10.3 billion promised this week in transport investment might as well be €100 billion or a tenner for all the substantive weight it carries given past performance.

Aaron McKenna is a businessman and columnist for TheJournal.ie. You can follow him on Twitter here.      

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