Catherine Murphy (Kildare North, Social Democrats)
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158. To ask the Minister for Jobs, Enterprise and Innovation the impact that the high rental prices in urban areas are having on employee availability to take up new roles in city centres; the control measures he intends to implement; the studies that have been done on the increased operating and salary costs to new employers; if impact assessments have been done on the effect on innovation and start-ups; and if he will make a statement on the matter. [37137/15]

Richard Bruton (Dublin North Central, Fine Gael)
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The adequate supply of quality, affordable housing, in the right locations, is a contributing factor to Ireland’s overall competitiveness. For example, it contributes to Ireland’s attractiveness for Foreign Direct Investment (FDI), for mobile talent, and house price inflation can feed into wage pressures which in turn can impact on our competitiveness. This is particularly true in urban areas where employment growth is especially strong, and housing supply is still suffering from the impact of the property crash.

In terms of measures, a shortage of supply is at the heart of rising rents and the Government is addressing this on a number of fronts. Construction 2020: A Strategy for a Renewed Construction Sector, published last year, is aimed at addressing issues in the property and construction sectors and ensuring that any bottlenecks that might impede the sector in meeting residential and non-residential demand are addressed. The regulation of the rental market raises many complex economic and legal issues. Measures proposed have to be balanced and have the desired effect on the rental market while being fair to landlords and tenants alike. I understand that my colleague the Minister for the Environment, Community and Local Government intends to bring proposals in relation to the rental sector to Government for decision as soon as possible. Ultimately, any decision in relation to this issue is a matter for Government.

Social housing is a key priority for the Government, as evidenced by the Government’s Social Housing Strategy 2020 and the €2.9 billion in funding under the Government’s capital plan. In Budget 2016 investment in housing infrastructure has again been given priority with a total housing provision in 2016 of €923 million. NAMA is aiming to deliver a target of 20,000 residential units before the end of 2020 with 90 per cent of these units to be in the greater Dublin area.

The Budget included supportive measures including a reduced Capital Gains Tax rate of 20 per cent for successful entrepreneurs, reductions in the USC affecting middle-income workers and creating jobs, income tax credit of €550 for self-employed people, with improvements in future years. The Budget also introduced a new measure to support innovation, the Knowledge Development Box, which will be a globally ‘best in class’ and first OECD-compliant scheme, with a competitive rate of 6.25 per cent on qualifying income that will be of benefit to SMEs in particular, and will be in place from January 1^st2016. The Minister for Finance also announced the extension of tax relief for start-up companies and enhancements to the Employment and Investment Incentive scheme to increase availability of investment finance for business. In addition, in terms of expenditure on innovation, the capital budget of my Department and Science Foundation Ireland will, amongst other things, train 3,000 researchers and deliver ongoing investment of €355 million with industry in 12 world-leading large-scale Research Centres.

In terms of research and assessment of the policy issues, skills supply, labour costs and the environment for start-ups feature regularly in work undertaken by, or in consultation with, my Department. Recent examples include the National Policy Statement on Entrepreneurship, Action Plan for Jobs 2015, and the work of the National Competitiveness Council. I also expect these issues to be examined further under forthcoming strategies including the successor to the National Skills Strategy, and my own Department’s forthcoming Enterprise Policy 2025strategy. My Department is also informed by continuous contact with businesses, IDA Ireland, Enterprise Ireland, and the Local Enterprise Office network.