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Richard Curran: 'Election debate fails to offer new solutions to our housing crisis'


Housing has become a key battleground in the election campaign (stock photo)

Housing has become a key battleground in the election campaign (stock photo)

Housing has become a key battleground in the election campaign (stock photo)

The first televised party leaders' debate of the election campaign between Leo Varadkar and Micheál Martin was a pretty low-key affair - shadow boxing rather than full contact sport.

Apparently, one guy won it because he said some things which came across as humble, and he also said he would be willing to go into a coalition with the other guy's party if he didn't have enough votes.

That led to a win on points, according to the politicos who study these things closely.

It doesn't take much to win an election TV debate these days, apparently.

One of the inevitable flashpoints was on housing and who could give away the best 'goodies' to those struggling first-time buyers seeking to get on what used to be called the property ladder. The crash showed there are as many snakes as there are ladders.

After the debate, Fine Gael went on the attack against Fianna Fáil's SSIA-type suggestion to help first-time buyers save for a mortgage. FF plans to give first-time buyers €1 for every €3 saved toward a deposit. The scheme would be capped at a maximum of €10,000 per person. Fianna Fáil put a cost on the scheme at around €250m per year.

It has been criticised for saying it would open up the scheme to second-hand homes, potentially fuelling house prices, and of course announcing something that might sound a lot like the previous SSIA scheme.

This time round, the Fianna Fáil idea is different. It is about first-time buyers, and not everybody in the country who wanted to save and receive free money for doing it.

The original McCreevy SSIA scheme announced in 2001 ended up costing €4bn to the State. It was a €4bn transfer to those who had savings or could save. In its first year, more than half those signing up opted for the maximum rate of monthly savings.

Criticism of the new plan fell neatly into the Fine Gael narrative of an overspending Fianna Fáil. Fine Gael came out defending its own Help-to-Buy scheme, which gives people back some of the tax they have already paid, up to a maximum of €20,000 on the price of a house.

While Help-to-Buy has seen 32,000 applications, only around half of those have actually been drawn down. More than one in four participants in the scheme ended up with deposits of 20pc to 30pc, which points to them not really needing additional State money to make a basic 15pc deposit.

Of the €215m spent on the scheme by the time of the last Budget, just €15m had gone on houses costing under €200,000. It isn't necessarily working for those who need it the most.

The problem with the Fianna Fáil suggestion is that it would be added to the Help-to-Buy scheme, which would also see its cap rise to €25,000.

Fine Gael has upped the ante to a €30,000 cap on Help-to-Buy. It is classic auction politics.

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Help-to-Buy has definitely helped some first-time buyers, but it hasn't solved the housing crisis. Its impact has been modest. Fianna Fáil's proposal would probably have a modest impact too, but cost more.

There isn't a lot in either proposal that is really new or radical in solving an intractable housing crisis.

Irish whiskey must get past dependence on US market

Irish whiskey sales have garnered so much attention and investment in recent years, it has made those in the industry here feel more than a little flushed.

Essentially, they are selling taste, heritage and brand. At my local filling station the other day, whiskey bottles were on display behind the till. A bottle of Bushmills was €28. It is a long-established premium product matured for at least four years.

Jameson, the biggest-selling Irish whiskey in the world, with a 240-year-old heritage, was selling for €30 a bottle.

Conor McGregor's Proper Twelve, which is made at Bushmills and is the minimum three years old to qualify as Irish whiskey, was selling for €35. McGregor's name is worth at least €7 more a bottle for punters.

But behind the massive growth in the category and the rejuvenation of diversity in the sector, there remains one unshakeable truth. Irish whiskey is heavily dependent on the US market. It accounts for more than half of what we sell around the world. And figures published this week show that it slowed for the first time in several years.

US sales of Irish whiskey hit $1bn (€905m) in 2018 and the good news is that they continued to grow last year, but not at the same pace. Irish whiskey sales grew around 8.6pc, compared with 12pc the previous year. Last year's growth was driven by another sterling performance from Jameson in particular, which enjoyed an 8.2pc volume increase in sales.

But in previous years, Irish whiskey sales had been growing well into double digits.

The investment premise in the sector is built on the revival of Irish whiskey as a distinct category, increased brown spirits consumption in key markets, and the fact that it is not seen as a short-term fad.

Whiskey is a long-term investment, but it would be very easy for things to turn in the US market. Trade wars and the prospect of tariffs are one thing. A change in drinking habits from a younger cohort is another.

Also, a downturn in the US economy and spending habits could easily hit those higher-quality premium Irish products.

Alcohol sales across the board in the US practically flat-lined last year, with just 0.3pc growth, according to International Wine and Spirit Research. US wine sales fell by over 1.5pc and beer consumption was down 2.3pc. Imported and craft beers fared better.

Irish whiskey bucked the trend, but not by as much as Japanese whiskey, which saw US sales increase by a massive 21pc.

Irish exporters continue to seek out market opportunities elsewhere but it is a tough battle. South Africa, where Irish whiskey is now legally protected as a distinct product of origin, is our seventh biggest market, but sales were only around €12.8m in 2018. In Japan, where they obviously like to drink their own whiskey, Irish sales in 2018 were valued at just €1.4m. Curiously, Irish liqueur exports to Japan were €3.8m, driven mostly by Intrepid Spirits, which sells Cocalero Clasico and Cocalero Negro.

IDA strikes cautious tone on the road ahead for FDI

IDA Ireland chief executive Martin Shanahan struck a cautious note in Davos. Having seen our foreign direct investment (FDI) increase by 52pc in 2018, Shanahan believes we may be competing for a share of a smaller cake in the years ahead.

Trade tensions, new tax rules and a general change in the economic cycle in the US could well result in a different pattern of investment into the EU. Even though US corporations have reduced overall inflows to the EU since 2018, Ireland has continued to punch above its weight.

Shanahan, who was at Davos to sell the benefits of Ireland to corporations, was introducing a strong note of caution about how we can't expect the really good times of recent years to just keep flowing.

Politicians making expensive election promises mustn't have had a chance to talk to him recently.

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