A new Government has taken office in the wake of a dramatic few days in Washington. This has led to an inevitable – and correct – focus on the economic dangers facing Ireland. But it is worth turning the argument around and taking a longer-term view. Ireland is awash with cash and this new Government faces a historic opportunity to use this to push Ireland forward, economically and socially.
Ireland needs to worry about Trump and set aside resources to deal with the possible fallout. But there is little point putting your entire strategy on hold on account of a US president who may not even know himself what he actually plans to do on the key areas affecting Ireland, notwithstanding the bluster of the last few days.
For now, tax revenues here are at record levels, the budget is in surplus despite a huge surge in exchequer spending, and the State has significant cash reserves. This may continue for another couple of years but as Ibec said in its economic outlook this week, the economy is at an “ inflection point” with growth slowing. Also, new US-driven policies on tariffs and tax are more likely to have a gradual impact on the public finances. In other words the new Government needs to get moving - and quickly as the budget position may tighten as its term goes on.
The job facing it is to use these resources available much more efficiently than its predecessor, and leave a real legacy of housing and improved social and economic infrastructure from this period of plenty. Using the fruits of current growth to lay the basis for the future makes perfect sense.
This week, there was a warning sign that needs to be heeded. Given the billions being thrown at supporting house building, the total level of completions last year of 30,330, announced the day the Cabinet was formed – and well below the 40,000 we had been told to expect – is just not good enough. Apartment-building, in particular, fell sharply, dropping 24 per cent from the previous year. An urgent audit is needed of where State money is being spent and what results are being attained.
The Government needs to transmit a new energy – and giving the Dáil two weeks off, having been shut for nearly two months, is not exactly sending out the right signal
There may be timing factors here: money spent over the past couple of years may bear fruit in the years ahead. And there are signs that next year’s numbers might be better, with a rise in registered commencements this year. But a new approach is needed, and the Programme for Government – a dull document with no prioritisation and all the signs of something drawn up like a Civil Service plan – does not provide it. Its goal of 300,000 new homes by 2030 is not enough, and it continues to suggest that the two big parties, Fianna Fáil and Fine Gael, are closed off to new ideas such as those provided in the Commission on Housing report.
The only bright spot was mentioned by the Taoiseach. It was a new co-ordination unit for housing in the Department of the Taoiseach, with more information promised on this. This may be a positive. A key recommendation of the commission was for a new housing delivery oversight executive, though it was to be independent and have a significant expert input.
This is important because co-ordination and oversight are missing, not only in thought, but in policy implementation across a range of departments and agencies. For example, planning guidelines moving from national to regional to local levels are not aligned – and insufficiently focused on delivering key projects, not only in housing but also water, energy and transport. Into this gap jump the objectors, leaving far too many decisions made on a narrow legal basis, rather than taking into account the national interest.
To make progress, the Government is going to have to upset many of the people who voted for it, the comfortable classes and the Nimbys who don’t seem to want anything built
The new planning bill is designed to remove some of the logjams, but has its critics, too. It will take months to implement, and in the meantime there are things that can be done quickly. Think tank Progress Ireland has identified a few potential quick wins, such as lifting the cap on development in the eastern and midland regions in the National Planning Framework, as recommended by the housing commission. Currently, shortages of zoned land are slowing development in these areas.
The national interest is also not served by what TCD economist Barra Roantree refers to as “procedural fetish”, with vast amounts of information required even for relatively small projects like bus and cycle lanes, and courts often rejecting projects not for a fundamental reason, but because they were judged to have missed a step in the process or conducted it inadequately.
A proposed housing development in North County Dublin generated headlines suggesting that it was turned down because of the danger to Brent Geese – in fact, the decision was based on a view that the developers should have taken another step to assess whether such a danger might exist. Meanwhile, big projects like the Dublin Metro and the Uisce Eireann pipeline from the Shannon to supply water across the country and to Dublin may or may never emerge from planning (or if they do, it will take more years). And the State’s plan to deliver more onshore and offshore wind energy, vital for climate goals, is behind schedule and also facing dangerous uncertainty.
Co-ordination and oversight are missing, not only in thought, but in policy implementation across a range of departments and agencies
The Government needs a new focus to attack these issues and transform the vital area of delivery. Unlike most other EU governments or indeed the US, it has a budget in strong surplus. But it needs to transmit a new energy – and giving the Dáil two weeks off, having been shut for nearly two months, is not exactly sending out the right signal.
More fundamentally, to make progress, the Government is going to have to upset many of the people who voted for it, the comfortable classes and the Nimbys who don’t seem to want anything built. It needs to think of the under-35s scrambling to get houses, many paying crazy rents, and the need to maintain investment so that this generation can continue to get jobs. If it does not deliver, this generational divide will fester, with unpredictable consequences.
The Government has the money and the opportunity, but has it got the drive to learn from the failures of its last term?
