Friday 21 October 2016

A cautious welcome for new housing plan

Published 20/07/2016 | 02:30

Fianna Fáil environment spokesman Barry Cowen warned there were
Fianna Fáil environment spokesman Barry Cowen warned there were "significant gaps" in Coveney's plan. Picture credit; Damien Eagers

Yesterday's ambitious plan, 'Rebuilding Ireland', envisages the construction of 47,000 social housing units over the next six years. While the Minister for Housing, Planning and Local Government Simon Coveney has set out a framework for ending the crisis, which is to be welcomed, he faces a number of obstacles in the immediate aftermath of launching his blueprint.

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The most pressing may be the minority Government retaining the support of Fianna Fáil. Within hours of its launch, Fianna Fáil environment spokesman Barry Cowen warned there were "significant gaps" in the plan and re-iterated that unless adequate action was taken it may fall to a new government to fill such gaps.

Tom Parlon, of the Construction Industry Federation, also asked the pertinent question of where the construction workers are going to come from.

Local authorities built just 72 houses last year, so who is going to build between 15,000 and 20,000 houses a year for the next five years?

The lack of houses, both social and private, in the right areas is a major problem and it is to be hoped that the creation of a new housing delivery office is the right way to proceed in clearing up the mess.

The other two problems that have become unfortunately entwined in the housing shortage are the rental and homelessness issues. Both will require a multi-faceted rather than a simplistic approach, if they are to be solved.

But 'Rebuilding Ireland' is a worthy start. It is now up to Mr Coveney and his officials to ensure the plan quickly becomes a reality; that the houses are built where they are needed and that we don't repeat mistakes of the past with urban sprawl.

Rethink needed on 68pc tax on higher earners

At a time when it is important for Ireland to retain well-educated and skilled workers in all sectors of the economy, it seems the Minister for Finance intends to remove a key tax credit for middle and high earners that will see them taxed at a marginal rate of 68.5pc.

This will hit 270,000 middle- and higher-income employees earning more than €70,000 a year and is part of Michael Noonan's plan to raise additional income while reducing the rate of the Universal Social Charge (USC), which was introduced as an emergency measure during the financial crisis.

If Mr Noonan goes ahead with the proposal, it will put him in direct conflict with IDA Ireland, which has warned that high income tax rates were making it difficult to attract foreign investment and hitting job creation.

In the light of the likely departure of Britain from the EU, it would seem short-sighted in the extreme to frighten off foreign investors who may be looking at Ireland as an alternative destination.

The Irish Tax Institute has said that the removal of this key tax credit would see workers earning more than €70,000 a year facing higher income tax bills than workers in cities such as London, Madrid, Stockholm and London.

If Ireland intends to keep attracting high-profile industries, where €70,000 is not regarded as a 'big' salary, then the Minister for Finance may need to rethink this measure.

Irish Independent

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