Monday 21 October 2019

Martina Devlin: 'Donohoe's positivity let down by gloomy inaction over housing - and we can't blame Brexit for that'

Room to improve: Protesters take part in a Raise the Roof Rally in O’Connell Street, Dublin. Photo: Caroline Quinn
Room to improve: Protesters take part in a Raise the Roof Rally in O’Connell Street, Dublin. Photo: Caroline Quinn
Martina Devlin

Martina Devlin

Ever since the Brexit referendum it has felt as if Ireland's ship of State - a currach compared with the British dreadnought - was being buffeted by adverse weather conditions. So it was quite a surprise to hear our condition is seaworthy, despite a crash-out Brexit on the horizon.

That appeared to be Paschal Donohoe's message from the bridge yesterday, scanning the future with his Department of Finance-supplied binoculars. Let's hope he's not being too buoyant.

Perhaps we should bear in mind that a disorderly Brexit is not a final destination. For that silver lining as storm clouds gather, we are indebted to Arlene Foster, well-known champion of international diplomacy.

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No two ways about it, things sounded less gloomy than expected - for now. It was a relatively unremarkable Budget compared with some of the penitential ones we've lived through. No need to break out the hair shirts just yet. A snip here, a tweak there sums it up. Even the carbon tax increase was set at an illogically low figure, if the intention is to change behaviour.

With its key points well flagged in advance, Budget 2020 contains few surprises - which suits most people because our surprise cup has been overflowing since Boris Johnson moved into 10 Downing Street and hired Dominic Cummings as his chief adviser.

Optimism aside - and why not be upbeat while you can? - Mr Donohoe has adopted caution as his watchword. Various small changes for now, and he'll borrow from the international markets if the worst comes to the worst. Currently, we're borrowing at virtually zero interest rates.

We heard a lot about managing risks and rising to challenges, and what a super job the Government is doing. The Finance Minister said no deal would be a challenge but it's one Ireland "has the measure of" - which sounded somewhat over-emphatic even for someone determined to radiate positivity.

His opposite number in Fianna Fáil wasn't long in contradicting him. Michael McGrath insisted: "The real effects of a crash-out Brexit are unknown." No economic model can predict accurately the effect of no deal, he said.

But positivity proved to be catching. Mr McGrath also took the opportunity to water an idea planted some time ago, namely that Fianna Fáil has behaved with nobility in relation to the confidence-and-supply agreement. Noble is a good look on the doorsteps if you can persuade householders to buy into it.

We heard some interesting facts yesterday during the Budget speech. Such as that 10.6 million visitors from abroad came to Ireland last year - which amounts to more than two visitors for every citizen. To counteract any Brexit downturn, Mr Donohoe allocated €40m towards a tourism initiative targeting various markets, including Britain, through Tourism Ireland.

Except the Johnson government and its media supporters consistently represent Ireland as the bogeyman blocking Brexit nirvana. Will British people really want to stream over here on holidays in the aftermath? In any event, they'll be short on disposable income and disincentivised against going abroad when sterling collapses.

All told, the Budget could have been worse. It has been worse. Back in 2008, in his first Budget as finance minister, the late Brian Lenihan found himself overtaken by events. (A similar fate might catch up with Mr Donohoe, of course.) Mr Lenihan's budgetary calculations were derailed by an enormous slide in the public finances, a banking emergency, credit crunch and property crash. That Budget was zoomed forward to October from its usual December date because of the crisis. Mr Lenihan repeatedly ruled out a second budget to mop up, but had to eat his words and introduce emergency measures the following April. Neither calculations nor spreadsheets could keep pace with the scale of the disaster.

Today, the electorate largely accepts that Brexit means the treats cupboard has a lock on it, whereas back in 2008 and 2009 the need for austerity hadn't dawned on people. Brian Cowen, as Taoiseach, criticised the population for an inability to "internalise precisely the lightning-rod issue in the way which respects the broad parameters of the budget arithmetic".

In other words, there was a communication problem between government and people but the fault lay with citizens.

All things considered, we've come a long way since then, although Brexit persists in raining on the Government's parade.

And so to the housing emergency, an issue that needs more focused attention than it is receiving. The Budget will plug holes but not deliver solutions. The Peter McVerry Trust has been vocal in suggesting a carrot and stick approach. One of its proposed carrots is reduced capital gains tax for landlords selling a property to a housing charity or local authority with a tenant in situ receiving housing subsidy. That's an imaginative idea.

And the stick: the trust points to the high numbers of vacant houses lying idle. We can all see them and their emptiness is mystifying at a time of pressure on accommodation. The trust suggests a levy on empty homes over and above the local property tax, nudging owners to sell or rent them out.

Most young people need a fairy godmother if they are ever to buy their own home. We don't even have a stable and affordable rental alternative.

More social housing must be built - Éamon De Valera managed it in the 1930s and 1940s when we were dirt poor as a nation.

But the Budget's extra €80m for the Housing Assistance Payment (HAP) scheme was the Government admitting it will carry on depending on the private rental market. This, despite prohibitive rents in any urban area where jobs are to be found.

"More needs to be done," acknowledged Mr Donohoe. No truer words spoken. It seemed odd to hear him reference talk the Decade of Centenaries in one breath and homelessness in another.

Our founding fathers and mothers wouldn't have been surprised by either Brexitmageddon or the British government's Brexit negotiating strategy. But high numbers of Irish citizens sleeping rough? Families raising children in temporary accommodation? Now they would be regarded as failure.

And none of it can be blamed on Brexit.

Irish Independent

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