Oireachtas Joint and Select Committees

Wednesday, 19 September 2018

Committee on Budgetary Oversight

Priorities for Budget 2019: Irish Fiscal Advisory Council

2:00 pm

Photo of Eamon RyanEamon Ryan (Dublin Bay South, Green Party) | Oireachtas source

I will just go further with this point because I believe it is a critical public policy question currently. I shall hypothesise how it could work. I believe that emphasis in public housing particularly should be around the cost model. This has the benefit of retaining in State ownership and there is a future income stream that meets the pace for the capital upfront costs over time. Our construction costs for public housing previously were just a lump sum from the Department of the environment to the local authority; it was not clever and it was anti-cyclical in that it tended to stop and start. The cost rental model has real potential, especially in the long term, as we build up the asset of public cost rental properties. Critically, because it is also in the private rental market, that model has the prospect of dampening down the private market rented sector in a way that current housing subsidies will never do. In some ways that would manage some of the overheating concerns because it is rental pressures in Dublin, for example, that also push up wages and so on. I am specifically thinking that it must be large scale to effect that level of change on the private market.

I am very encouraged to hear Mr. Coffey refer to that sort of long-term investment, particularly where it is long-term borrowing met with revenue streams. If Ireland needed to fund this and if capital was needed up front to help it to get going, and if we were still to borrow from the European Investment Bank or from somewhere else, one prospect could be the sale of bank shares. I am aware that the Department of Finance would hate this hypothesising - but would love to bring the debt down - but if some percentage of AIB bank shares were sold and if there was a large lump sum in a cash pile would this be a way to allow for an intervention in the housing market, which we need to do, that does not affect the general budget financing figures? This could be a practical way of financing such a measure. Has Mr. Coffey a problem with the hypothetical allocation of a cash stream such as that, which is not coming from tax revenue?

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