The fiscal rules to which Ireland is subject have direct application through a number of EU regulations and through the Fiscal Responsibility Act 2012. Any change to these regulations would have to follow the normal EU approach, beginning with a proposal from the Commission before consideration by Member States and the European Parliament.
The fiscal rules provide some scope for flexibility, where temporary deviations from the required budgetary adjustment are permitted, subject to strict conditions. There are also certain more explicit flexibility provisions within the rules. For instance, to facilitate public investment, increases in capital expenditure are smoothed over a four-year period, where only one-quarter of the increase is taken into account in the first year.
The rules also allow for deviations in the event of specific unforeseen circumstances – to date this has primarily been employed by several Member States in respect of costs relating to the refugee crisis – and to finance structural reforms that improve the long-term sustainability of the economy.
The Government has been clear that the provision of affordable housing is a top priority. The Rebuilding Ireland Action Plan outlines the Government’s strategy for tackling housing issues. By the end of 2018, over 70,000 housing solutions will have been delivered under Rebuilding Ireland. In addition, along with my colleague the Minister for Housing, Planning and Local Government, I signed the Establishment order for the Land Development Agency on 13 September. The Agency will work to better coordinate State lands for regeneration and development in partnership with land-owning State bodies.
Finally, a wide range of housing measures were announced in Budget 2019, which provides a €2.3 billion investment in housing for 2019. This represents a 25 per cent increase on 2018, and is the most the State has ever spent on housing. To ensure that no one has to sleep rough in the winter, an additional €60 million in capital funding was allocated for 2018, much of which will fund additional emergency accommodation. Budget 2019 provides a further increase of €30 million for homelessness services, bringing the total allocation for 2019 to €146 million.