The cabinet will devote several meetings over the next month to the composition of the 2016 budget, which is to be announced on 13 October. While most attention will focus on pre-election current expenditure increases and tax cuts, there will have to be decisions too about the public capital programme, which has been severely curtailed since the downturn began in 2008. There are two key questions – whether capital spending should be increased at all and, if so, what are the priorities?

It has become an unquestioned article of faith for lobbyists, notably the construction industry, that Ireland is facing an infrastructure deficit. But economic activity has yet to regain the 2007 level, so there has been almost a decade of zero growth.

Demands on infrastructure have failed to grow as predicted and many of the projects deferred or abandoned did not make much sense to begin with. Public infrastructure consists mainly of housing, transport and water networks, schools and health facilities, energy and telecoms hardware. The deficiencies are by no means uniform across these sectors. The current political pressure is focused especially on public housing throughout the country and on transport projects in Dublin.

Housing

There are substantial waiting lists for local authority housing in much of the country and the standard political response is to build more accommodation. But local authority tenants are entitled to purchase their homes on favourable terms.

If all of the public housing constructed over the last 40 or 50 years was still in the possession of the city and county councils, there would be far less pressure. Instead, it has been sold off as quickly as new public housing is built.

It is a perfectly sensible social policy to ensure access to shelter regardless of means, but handing people, without a means test at the time of the transaction, instant and unearned capital gains on house purchase from local authorities means that the available stock is a bucket with a hole.

More construction may well be needed, especially in the cities, but why not plug the hole?

One of the saddest features of the housing bubble was the construction of ghost estates around the towns and villages of rural Ireland, many now abandoned.

The houses were built in the wrong places while urban rents have now become unaffordable, fuelling the pressure for more local authority construction.

The planning laws are partly at fault. Private builders are not ramping up supply in the high-demand areas because of high construction costs imposed by planners, and excessive land costs courtesy of the same people.

Transport

Urban rail projects are expensive, especially if you put them underground. There are two very large gleams in the eyes of civil engineering firms and equipment suppliers. These are an underground link from Dublin city centre connecting to Heuston and a link to Dublin Airport. No firm cost estimates have been provided for either project but they are likely to cost several billion euro each.

There is no denying that Dublin has a traffic problem but, equally, there is no independent evidence other than assertions from the project promoters that underground railways are the solution. Dublin is a low-density city and it is not obvious to the disinterested that rail solutions are cost-effective.

In the west of Ireland, over €100m was wasted on a rail line from Ennis to Athenry, which carries derisory numbers of passengers and offers journey times from Limerick to Galway slower, and less frequently, than the pre-existing bus services. Regardless, lobbyists are seeking a northward extension of this white elephant into Co Mayo.

There were some transport investments postponed during the financial crisis which should now be expedited, notably the M20 motorway connecting Cork to Limerick.

Ireland has some emerging capacity issues at seaports, especially Dublin, and the capital’s airport will need a parallel runway in due course. These investments can be financed by the state companies concerned without resorting to the Exchequer. But the bubble saw excessive investment in small regional seaports and airports, of which there are still too many. Unfortunately, the Government is continuing to provide operating and capital subsidies.