Social Justice Ireland has called for a €7 billion investment programme to boost the economy, create jobs and help to repair the public finances.

The campaign group said budgeting that is focussed on cutting spending is failing to create jobs, which is preventing an economic recovery. It said much of the blame for this lies with a collapse in investment since the onset of the financial crisis.

The group claims Ireland now has the lowest level of investment in the European Union - amounting to 10% of GDP, compared with an EU average of almost 18%.

In a policy briefing published today, Social Justice Ireland said that Eurostat data shows Ireland's current level of fixed capital formation at the lowest recorded for an EU state since 1995, when this data began to be collected.

It said the fall in investment since the onset of the economic crisis has been dramatic, and far in excess of investment falls in other countries in EU/IMF bailouts. It also pointed out that public investment in Ireland has fallen by 40% since 2007. Direct investment by government has fallen by 50%, while investment by semi-state companies is down by 20%.

Overall investment as a share of GDP has fallen from 25% in 2007 to 10% last year.

Social Justice Ireland said a three year, off balance sheet investment programme worth €7 billion could boost growth by 2% next year and 24% in 2015. This would generate between 50,000 and 80,000 jobs, it claims.

Such an investment would also generate additional taxes (estimated at €2.9 billion) and produce savings in social welfare, health and bank recapitalisation costs.

The latter would come about because a growing economy and more people in employment would reduce the amount of mortgage arrears problems on the banks' books.

Because of the large Government deficit, Social Justice said additional funds for investment cannot be borrowed directly by the Government.

But it said €3 billion could be sourced from the newly created strategic investment fund (which contains the remaining €6 billion from the National Pension Reserve fund), and attract an extra €1.5 billion from the European Investment Bank for lending to specific projects.

A further 1.25 billion each could be raised from domestic pension funds and by borrowings by commercial semi-state companies, Social Justice Ireland said.

While welcoming the Government's move to re-direct the pension reserve fund into investing in Ireland, Social Justice said the programme will be spread over too long a timeframe, and could make a bigger impact if the investment is frontloaded over the next two years.

It said all proposed investments should be evaluated by the departments of Finance and Public expenditure, so that what it calls a robust case for investments is established.

Social Justice said the money should be invested into renewable energy projects, construction of social housing units, primary health care facilities, energy efficient retrofitting of housing stock, early childhood education, community nursing facilities, improvement of non-motorway roads and improving the state's water infrastructure.