The Construction Industry Federation (CIF) has urged Finance Minister Mr McCreevy not to cut spending on the State's public capital programme in the forthcoming Budget saying a cut in spending could treble projected losses for the sector next year.
In its Budget submission released yesterday, the CIF said output by the construction sector would decline by around 4 per cent in 2002, resulting in the loss of €800 million worth of work. It believes losses next year could be held at 2 per cent assuming a strong public capital programme.
However, if public capital spending is reduced, the sector is facing a reduction in volume output "more in the order of 6 per cent", it said.
It has also urged tighter control on public current spending saying if control is re-asserted by the Government, there will be no need for tax increases.
Increasing capital gains tax (CGT) in the current climate would be counter productive and would result in CGT revenues "being lower than they would otherwise be", the submission said.
An increase in VAT on the current 12.5 per cent levy would push inflation higher and further erode the competitiveness of the Irish economy, the CIF contends.
