Minister for Finance Paschal Donohoe has said he appreciates the urgency of Ireland’s housing situation, and he acknowledged that the Government must do more to alleviate the challenges faced by first time buyers.
Speaking on RTÉ’s Today with Claire Byrne, Paschal Donohoe said the Government is “absolutely aware and have been for some time of what needs to be done with regard to housing, and addressing the issues that have been raised by so many”.
Mr Donohoe said the Government’s recognition of the challenges in the housing market has driven its actions over recent years.
“Between 2016 and the end of the last government 80,000 more homes were built, 30,000 families were taken off social housing, and there was a reduction in the number of people who were homeless as well,” he detailed.
“If you look at where we are for last year – despite all the challenges that we had with a pandemic – 20,000 homes were built in Ireland and the State last year was the single biggest builder delivering over 6,000 homes,” he added.
Minister Donohoe said the debate surrounding the purchase of homes in Maynooth in Co Kildare, demonstrates the challenges faced in housing.
“The events of recent days have underscored the urgency of this and reminded me, yet again of how much we are doing and need to do to respond back to the challenges that tenants and first time buyers face,” he said.
But he said this purchase should be put in context.
“Three quarters of 1% of the housing stock in Ireland is owned by institutional funds. 4% of tenancies are owned by institutional funds,” he said.
The Minister reiterated that investment funds have a role to play in the supply of private homes.
“We need to deliver 33,000 homes per year in Ireland, over the next decade. Out of that 18,000 homes need to be delivered by the private sector and funds have a role to play in supplying the capital to build those private homes,” he stated.
He said he does not agree with the purchase of an entire housing estate in Maynooth.
“We need to get the balance between dealing with that kind of behaviour, and try to change the incentives, but also recognising that we do need investment to build more homes,” he said.
The Minister said he would not comment on whether he is considering the imposition of the commercial stamp duty rate of 7%.
He said he would not comment on tax decisions before they are brought to Government, as he said this can have all kinds of consequences that he said he would be accountable for.
A return to economic growth to pay for income support measures
Paschal Donohoe also said today that economic growth and a return to work this year will pay for a significant majority of income support measures put in place during the Covid-19 pandemic.
Mr Donohoe said that he expects to see growth of 4% in the economy this year and the creation of 80,000 new jobs.
Economic growth is expected to rise to over 5% next year with the creation of 200,000 new jobs in 2022, he added.
“We will recover and I believe we will recover quicker than many anticipate,” he added.
He said that increasing taxes on work and income would undermine the country’s ability to create 200,000 new jobs next year.
But he said that decisions on how to pay for bigger public services will have to be made in time, while sensitively recognising that as the health emergency recedes, the emergency measures in place will slowly need to be changed.
He said that plans to increase carbon tax are in place and will also help to pay for recovery.
The Minister said that Budget 2022 will be about delivering a recovery that can respond to all the challenges in the economy.
Mr Donohoe said the Government is considering making wage supports conditional on individuals undertaking training schemes.
He said that the Pandemic Unemployment Payment has played a vital role in supporting income, living standards and families at a time of an emergency.
Any decisions on the PUP’s future will reflect the fact it was an emergency payment, but that it must also continue to play an important role in supporting those out of work or who wish to go back to work.
There are 385,000 people on the PUP this week, a reduction of 50,000 over the last four weeks.
He said that the IMF recommendation that the PUP supports are conditional on re-skilling are “an ingredient” in government discussions about its future.