Construction BUSINESS

The Irish Congress of Trade Unions has told Finance Minister Paschal Donohoe that a failure to properly tackle the Housing Crisis in Budget 2018 would see Ireland “pay a high price in terms of future social cohesion, damage to future growth prospects and increased living costs for working people.”

Congress General Secretary Patricia King was meeting with the Finance Minister on priorities for Budget 2018 and the Congress pre-Budget Submission: Investing for the Many, Not Just the Few.

Ms King said Congress had three key priorities for Budget 2018:

• Tackle the housing and homelessness crisis,
• End the reduced VAT rate for the tourism sector that has cost some €2.2 billion in lost revenue and,
• Invest in key services such as education, health and childcare to lower living costs.

Ms King said that Congress was proposing that local authorities across the country take the lead in the provision of social housing as the only long-term and sustainable response to the housing crisis.

“We abandoned the housing market to private developers and let profit become the key driver of housing provision. But the market has failed and government must now step in and declare a National Housing Emergency and act accordingly.

“Local authorities should take the lead in a major housebuilding programme with funding of at least €1 billion from government, providing at least 10,000 social housing units a year by late 2018.

“Given that this is an emergency, Compulsory Purchase Orders must be utilised as a matter of urgency to ensure available serviced land is put to good use, while the introduction of the Vacant Site Levy should be brought forward from January 2019.

“We cannot afford a return to the developer-led and shaped policies of previous years despite recent attempts from that sector to extract more tax breaks and subsidies in order to build houses. That approach has led us directly into the crisis we see today.

“In the short and medium term, thousands of lives and life chances are being damaged beyond repair by the housing crisis. That itself is cause enough to act.

“But this crisis will also discourage inward investment, drive up living costs for working people and impact adversely on the labour market. Budget 2018 is the opportunity to deliver a game-changer on this critical issue,” Ms King said.

She also said that Congress would continue to push for an end to the special reduced rate of VAT enjoyed by the hospitality/tourism sector as this was a “de facto subsidy that had already cost the state some €2.2 billion in taxes foregone.”

Ms King said: “There is no justification for this ongoing subsidy to this highly-profitable and predominantly low wage sector. There is no evidence that it has led to any significant new job creation or that the consumer has benefitted in any way.

“In fact all the evidence suggests that the reduced rate operates as a subsidy to very profitable corporations which is a waste of valuable resources when set against areas of obvious need, such as homelessness.”

Ms King said Congress also made the case for increased investment in key services to Minister Donohoe, as a way of boosting the ‘social wage’ and lowering the cost of living, particularly in terms of tackling higher costs in education and healthcare for working families.