Fiscal Space For Housing

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Modular housing in Ballymun, Dublin being built in April

This morning.

Further to the Irish Fiscal Advisory Council releasing a “buoyant” pre-Budget statement…

On RTÉ’s Morning Ireland.

Seamus Coffey, chairperson of the Irish Fiscal Advisory Council (IFAC) and UCC economics lecturer, spoke to Audrey Carville.

Audrey Carville: “I suppose for many people the question is this: is it possible for the Government to stick to existing plans and still do more to tackle the housing crisis?

Seamus Cofffey: “Oh absolutely, I think a key point that we’d make is that choices have to be made. That if there are priorities that we wish to address, these are the ones where the available resources are targeted. And if we look at capital spending in which the provision of social housing would be one element over the next couple of years, capital spending, Exchequer capital spending  is set to  double from the level it was in 2016. It’ll be almost double that by 2021.

“So the Government has set out a plan that does see quite a rapid and large increase in capital spending and this plan is in line with the fiscal rules. In fact, if you take the plan to 2021, it’s probably showing over-compliance with the fiscal rules. Yet within that, they are finding the space to double capital spending.

“Yes, we have some severe and serious problems at the moment. They take a long time to build up and equally they can take a while to solve but there is the space to do that, if things are prioritised.”

Carville: “What will happen though if the Government says, ‘well no, actually, we’re facing an emergency of such a nature that more has to go into the provision of public housing straight away, that we have to change things slightly. ”

Coffey: “Well, again, it’ll be choices, if you want to provide more for social housing, you can transfer spending resources from elsewhere or you can  raise additional funds from tax revenue.

“One issue we’d be concerned with is the overall impact, the fiscal and the government sector has on the economy. We’ve an economy that’s growing very, very strongly at the moment and has been for a number of years. The unemployment rate has dropped down to 6%. If we feel we need to ramp up say, output in housing, both say in the private sector and in the public sector, one issue is: do we have the resource capacity to do that?”

“Where are the workers going to come from? Are the workers going to come from other sectors in the economy? Maybe driving up wage rates? We’re beginning to see, although moderate at present, wages beginning to rise. Are we going to import workers from abroad? And, of course, if we bring in the workers to build the houses, that’s only adding to the problem we’re trying to solve with greater housing supply in the first place.”

Carville: “There is also the question of where those workers might live at the moment, because of the severity of the crisis. There have been all sorts of calls for different measures. For instance, over the past couple of days, we’ve heard Fianna Fail saying that there should be tax cuts for developers to encourage them to develop houses more quickly. What do you think of that idea?

Coffey:When it comes to individual measures, the fiscal council sort of remains outside the debate. What we’re looking at is the overall impact of all the decisions taken by Government and that’s not just on the spending side. There does seem to be a kind of impetus on the sort of spending watchdog. You can also have issues on the revenue and tax side as well. It’s a combination of those decisions. When it comes to actual individual measures, that’s a matter for the political process to decide. We consider what the outcome is in terms of the overall Government account and the impact on the economy.”

Carville:So you don’t have an opinion one way or another, or at least one that you’re going to give us on the question of tax cuts for developers?

Coffey:Correct.”

Listen back in full here

Meanwhile…

Last night…

The Irish Independent reported:

Housing Minister Eoghan Murphy angered members of Dublin City Council (DCC) after he decided against appearing before the council to discuss the housing crisis.

The council had sent an invitation to the minister, asking him to attend its first meeting after the summer break, which took place tonight [Monday night].

However, Lord Mayor of Dublin, Michael McDonacha, revealed Mr Murphy responded that he would appear only after the Rebuilding Ireland report had been completed.

Anger as Housing Minister Eoghan Murphy fails to attend council meeting to discuss the housing crisis (Irish Independent)

Previously: ‘Will They Still Be Your Friend? Or Will They Find You Scum?’

One thought on “Fiscal Space For Housing

  1. dav

    Good to see minister murphy is maintaining his party’s policy of trying to ignore the problem in the hope it will go away…

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