Wednesday, 11 May 2022
Ceisteanna - Questions
I propose to take Questions Nos. 1 to 10, inclusive, together.
The Cabinet committee on economic recovery and investment first met on 8 July 2020. It has met a total of 19 times, most recently on 28 March. The next meeting is scheduled for 16 May. Membership of the committee is comprised of the Taoiseach; the Tánaiste and Minister for Enterprise, Trade and Employment; the Minister for the Environment, Climate and Communications, and Transport; the Minister for Finance; the Minister for Public Expenditure and Reform; and the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media. Other Ministers or Ministers of State attend when required.
The Cabinet committee on economic recovery and investment is responsible for issues relating to the economy and investment. It had an initial focus on developing the July jobs stimulus 2020, and has since overseen the development of the Government's economic recovery plan, as well as the review of the national development plan. It has also overseen the development of the Government's national digital strategy. Regular updates and analysis of economic developments are also provided at these meetings. Issues relating to the economy are, of course, also regularly discussed at full Cabinet meetings, where all formal decisions are made.
The delivery of affordable housing is absolutely key to economic recovery. My colleague in Dún Laoghaire-Rathdown, Councillor Melisa Halpin, just received a reply from the local authority about Cherrywood, which is the biggest residential development going on in the State. The local infrastructure housing activation fund, LIHAF, funding which the State extended to the developers was supposed to be reciprocated with 300 affordable homes, but the local authority now thinks that will not happen. There is extremely poor engagement from the developers. It seems that whatever affordable housing the local authority gets will only be €37,000 less than the market price, which is now on average €644,000 in Dún Laoghaire, which means it will not be affordable. There is similar pessimism with regard to the Woodbrook-Shanganagh site, which is also LIHAF-funded. Public money was given to the developers for infrastructure in exchange for affordable housing.
The discount is slightly more at €63,000 but given the average house prices in the area, the affordable housing we were supposed to get will almost certainly be unaffordable for the vast majority of people. That is utterly unacceptable. Indeed, the failure of the Cherrywood developers to engage seriously with the council after getting this money for the infrastructure to deliver affordable housing is a scandal. What is the Taoiseach going to do about this?
The most famous village in Ireland, Blarney, is facing the closure of its post office. It is not alone. More than 200 post offices face the threat of closure in the next 12 months. The root of the problem here is the Government's failure to increase the pay of postmasters and postmistresses and its refusal to switch the provision of some key State services to the post office network. Ulster Bank and KBC Bank are scandalously preparing to exit the Irish market. Has the Government even considered the idea of transferring their services to the post offices? I suspect that Fianna Fáil, Fine Gael and the Green Party will not be quickly forgiven if these 200 post offices are allowed to close. I know for certain that the people of Blarney will neither forgive nor forget. Does the Taoiseach intend to act on these issues or will he stand idly by and allow these devastating closures to take place?
My question is about economic evaluation of the Government's housing policy. The Government is planning to give €450 million in subsidies to developers to build apartments. These subsidies will be up to €120,000 and, in some cases, as high as €144,000. Despite this huge public subsidy there will be no discounts in the sale price, no affordability built in and the apartments will be sold at the full market price. For a fraction of this cost the State could buy the land and make it available for affordable housing and affordable purchase homes to be built. Has any independent analysis of these proposals been carried out? Is the Taoiseach aware of any other country in the world where the government is gifting such large subsidies to private developers? Does this scheme guarantee a minimum level of profit of 15% for developers? Why is the Government implementing the developers' wish list instead of measures to increase housing affordability? Is the Taoiseach concerned about the huge influence of people lobbying for developers on the Government's housing policy? Why is the Government so intent on gifting public money and resources to private interests?
Economic recovery is hampered by the scourge of low pay in Ireland, with one in five workers on low pay. This has a knock-on effect because many people are unable to afford basic costs such as basic housing costs and are unable to contemplate having a secure home. They are simply on too low a rate of pay to be able to meet rising housing prices and rising prices for childcare, transport, food and fuel. This morning the Labour Party's Living Wage Bill 2022 was debated and we welcome the fact that the Government did not oppose the Bill. However, when will the Government move on the Bill? When will it move to ensure there is a clear pathway to transform the minimum wage into a living wage, as promised in the programme for Government? A report from the Low Pay Commission has been with the Tánaiste since March. Can the Taoiseach confirm when that will go before the Cabinet, when it will be published and when we will see the transformative measures to transform the hourly rate of those on the lowest pay into a living wage? When will such measures come into effect to transform the lives of those who are so desperately affected by the cost-of-living crisis?
My question relates to the Cabinet subcommittee on economic recovery and investment. Notwithstanding that its recent meetings were sure to deal with issues pertaining to the cost of living, I specifically have a question about the costs associated with energy not only for households but also for business and its activities. In recent weeks another independent report and assessment appeared to indicate that the prices in Ireland are 25% over and above the European average, notwithstanding international pressures and other issues. The Taoiseach knows that I have been raising this matter for some time. It is the subject of investigation not only by our regulator, the Competition and Consumer Protection Commission, but also by the EU Commissioner for Energy, Ms Kadri Simson. I have briefed and asked the body within her remit to look at this issue and investigate, analyse and independently assess it for once and for all so as to bring some clarity to the issue of whether there has been a failing on the part of the regulatory and EirGrid systems that are in place here to ensure there is adequate competition, adequate supply and therefore adequate price variance available to the public and to business. Will the Taoiseach respond to the issue I have raised?
Like Deputy Cowen, I wish to raise the issue of the rising cost of energy. Due to inflation and an over-reliance on fossil fuels the cost of energy has skyrocketed. The rising cost of energy for households has been well documented and we have introduced measures. However, what has been less documented is the rising cost of energy for businesses, particularly small businesses. I have the example of a bill that a small business owner, a hotelier, showed to me. One part of the bill was an energy market adjustment charge of €5,000 extra due to the cost of energy. A well-known restaurateur showed me a bill that increased by over 250%. Urgent intervention is needed. It could either be through a financial support, and we have been good with financial support for businesses, or, second, and this is one that is an easy win, through the support scheme for energy audits, which makes €2,000 available to businesses that have a spend on energy of over €10,000. Many microbusinesses in small towns do not have that spend. Now, however, they are being pushed up towards it with the rising cost of energy but they cannot qualify for it. We should bring microbusinesses into that scheme as well.
I thank the Deputies for raising those issues in the broad context of the economy. There were quite a number on housing and energy.
In the first instance, the Housing for All strategy has a suite of measures, not one set of measures. There is a very strong focus on social housing and a target for 2022 of 9,000, with the aim of getting to approximately 10,000 per annum over the next five years and beyond. There are further targets for affordable housing, cost rental and private housing. As regards LIHAF funding, the LIHAF scheme has been in place for quite some time. I do not have the specifics in respect of the individual local authority and its relationship with the development companies to which Deputy Boyd Barrett referred, but I will talk to the Minister for Housing, Local Government and Heritage about the two specific cases mentioned. Suffice to say that in certain areas LIHAF funding has been important for getting construction going and getting projects off the ground. We need to build far more houses than we are currently building. It is as simple as that. We are simply not building enough houses, irrespective of the type of house, for a population of 5 million people.
Over the last ten years we were not building enough houses so we have to rapidly increase and then consistently have an output of housing of 33,000 to 35,000 per annum for the next ten years. That will enable us to provide younger people, in particular, with affordable houses to rent or buy.
In response to Deputy Barry, I often thought he might have kissed the Blarney Stone when he first arrived from Dublin to Cork because he has what the Blarney Stone mythically gives one when one kisses it. The closure of post offices is a serious issue. I recently met with representatives of post offices in Cork. The Government intervened last year and in the previous year by providing a funding stream to underpin some of the services and to support the viability and continuation of post offices. The Minister for Public Expenditure and Reform is looking at this very keenly at present because it is due to expire towards the end of the year. We are concerned that a town such as Blarney would be without a post office. We are looking at transferring services, but the customers of Ulster Bank and KBC Bank are going to migrate to other financial institutions and it is open to An Post to perhaps provide banking services and so forth. Fundamentally, however, there is the issue of the community-based services.
In collaboration with the Ministers with responsibility for rural development and public expenditure we will seek to do what we can on financial underpinning and what other services, in particular State services, post offices in rural Ireland could realistically provide.
Deputy Cian O'Callaghan referred to the Croí Cónaithe fund. This has two aspects. One is apartment building in cities and the other is to try to facilitate through much smaller grants the repair of housing in town centres across rural Ireland. We all go through villages and towns where there are buildings and houses that are not in use or that have not been refurbished or renovated. This is one aspect. With regard to the aspect identified by Deputy Cian O'Callaghan, where there is an upper limit of €120,000, and not all may achieve this, there has been a challenge with regard to the viability of apartment blocks in Dublin, Cork, Galway, Waterford and Limerick. There has not been anything near the level of development of apartment blocks that are desired in city centres for a number of reasons. There is the whole idea of compact living, whereby all services are available within walking distance to people who live in residential areas and we have a more energy efficient city. There is a societal objective to ensure the viability of building large apartment blocks. This has not been realised to date. There is an aversion to tax incentives and this is shared across the House. The Croí Cónaithe fund has been designed to see whether we can bridge the gap between the viability cost and the market price to enable us to get far more supply into the market so that young people can buy apartments at affordable rates. Currently this is not the case in cities. We are looking at a supply of approximately 5,000 apartments. This is what the scheme is targeted to deliver.
Deputy Bacik referenced the issue of low pay. We have not opposed her Bill. The Tánaiste will come forward with a report on low pay. The Government has committed proactively to a living wage provision.
Deputy Cowen raised the issue of energy and the wider issue of competition in the market. Again, the Government will be giving active consideration to this. This was a feature prior to the pandemic. The fact that our prices are price higher than our European counterparts has been a feature of the Irish energy market for quite some time. This will be examined by the Government.
I take the point made by Deputy Christopher O'Sullivan on energy audits and their application to micro-companies. He raised two issues. Yesterday, the Government extended the low rate of VAT for the hospitality sector, including restaurants and small hotels, until February 2023. This should be of some help notwithstanding the huge impact of energy input costs.