Thursday, 8 February 2024
Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions
National Development Plan
84. To ask the Minister for Public Expenditure and Reform how the finding of the recently published ESRI report, The National Development Plan in 2023: Priorities and Capacity, will shape the review of NDP ceilings; and if he will make a statement on the matter. [5760/24]
Will the Minister outline the procedure involved in ensuring that the findings of the recently published Economic and Social Research Council, ESRI, report, The National Development Plan in 2023: Priorities and Capacity, will be incorporated and ultimately change the current NDP ceilings so we know we are investing enough in housing and making sure that the construction activity is directed where it is most needed to provide residential homes?
I thank the Deputy for the question. As the Deputy is aware from the various points she has put to me, the Economic and Social Research Institute published its report,The National Development Plan in 2023: Priorities and Capacity, on 12 January 2024.
It is important to reiterate the rationale behind why I commissioned this report by the ESRI. A comprehensive review of the national development plan, NDP, was undertaken over the course of 2020 and 2021, which led to the publication of an updated NDP in October 2021. Since then the €165 billion NDP has supported a broad range of infrastructure projects and programmes which our country and citizens need and require. However, of course I acknowledge that the challenges posed in the intervening period since October 2021 such as full employment and heightened inflationary pressures were not anticipated to the extent experienced at the time of updating the NDP. As a result, in March I informed the Government of a package of significant actions aimed at enhancing project delivery of the NDP of which one was to commission an independent evaluation of NDP priorities and capacities.
The ESRI published its final report in January 2024. The report is currently informing ministerial colleagues, officials and me as we engage with Departments on their NDP allocations to 2026. In this context, the report is providing valuable input to this process in the consideration of key issues such as the capacity to deliver priorities and utilise capital allocations in an economy characterised by full employment facing significant supply constraints.
That is an answer but it does not answer my questions. The ESRI report was with the Minister's Department before the budget last year and an early draft was with the Department as early as June last year. This report makes it clear that there is need to increase housing targets. Sinn Féin has spent the last four years warning that housing targets were too low. Finally the expertise of the ESRI was sought to examine the capital investment, as the Minister has said. The report states that existing targets for housing supply understate the need and concludes that higher output will be needed. Despite having this information, which the Minister commissioned, the Minister announced a budget that provided no additional funding for housing. Did the Minister share that information with the Minister for Housing, Local Government and Heritage before budget day? Why did the Government choose not to act on that information?
Respectfully I beg to differ. The Deputy asked me the question around how the findings of the recently published report shaped the national development plan in 2023, how we are dealing with priorities and capacities in review of NDP ceilings, and if I would make a statement on the matter. That is the question the Deputy put to me and that is the question I answered.
With regard to the points the Deputy put to me on my engagement with the Department of Housing, Local Government and Heritage, the Minister is making case, and has been making the case, for more funding and for more support to go into the Department of Housing, Local Government and Heritage and into the building of more homes.
On the Deputy's point around no additional capital being allocated on budget day the capital ceiling and the level of capital spending for the Department of Housing, Local Government and Heritage went up. When the budget was done we confirmed that we will be spending more money on housing in 2024 than we did in 2023. I am now working with the Minister, Deputy O'Brien, to look at how much additional funding can be made available and what would be the impact of that given the debate under way on the revision of housing targets.
When it comes to the State building social and affordable homes it is very clear now that the targets for 2023 are not going to be met in counties like Mayo. Indeed not a single house was delivered in Mayo in the first nine months of 2023.
Another crucial finding of the ESRI report is about the workforce and the need and potential use of the taxation system to redirect construction work. The report outlines how taxation can be used to move construction workers and companies away from activity such as office space, hotels and car parks and towards the building of homes. Sinn Féin has long put this forward as a solution to increase housing delivery, and we proposed this in the budget as well. Now that the idea is coming from the ESRI I hope the Minister will take it on board.
Did the Minister, Deputy Donohoe, share the report with the Minister for Finance, Deputy McGrath, before budget day?
I had the report in draft format earlier on in the year. I cannot remember if it was available in draft format to my Department before or after the budget because the budget season is always so intense. I did not see the actual report itself until far later in the year. As soon as the report was published it was shared with the Minister for Finance but there will be nothing in the report that will come as a surprise to the Minister for Finance or to his Department.
On the reallocation of economic activity within our economy and using taxation to do that we have increased stamp duty on commercial property on multiple occasions in other budgets. In many of the budgets I did in the last Dáil we increased stamp duty on commercial property. It is well known that there are signs of the commercial property sector now beginning to decline and it is not clear to me what would be served given that commercial construction is now potentially beginning to moderate how such an application of further changes on tax policy to a sector that is beginning to moderate would be of benefit.
These are matters for the Minister for Finance and I know he always keeps these matters under review.