Dáil Éireann Debate, Tuesday - 21 September 2021
18. Deputy Thomas Gould asked the Minister for Finance the discussions his Department has held with the ESRI following its special report titled Prudent government borrowing can mitigate inadequate housing supply and upward pressure on prices and rent. [44802/21]
View answer59. Deputy Francis Noel Duffy asked the Minister for Finance if he has given consideration to the recent ESRI article which recommends increased borrowing to double capital investment in public housing including the delivery of cost-rental units; and if he will make a statement on the matter. [33423/21]
View answerI propose to take Questions Nos. 18 and 59 together.
It is important to recognise that the Government receives advice from many quarters on many issues. In relation to borrowing, I am aware of the ESRI analysis but, equally, I am aware of other pieces of analysis - including most recently from the Irish Fiscal Advisory Council - that highlight the risks associated with more-and-more borrowing.
In formulating policy, therefore, Government must take all of the advice on board, including that of the civil service. Government also takes into account the fiscal context in its decision-making. This fiscal context is one in which our budget deficit last year was close to €19 billion – the equivalent of 9 per cent of modified national income, with a broadly similar figure anticipated for this year. Our public debt is approaching a quarter of a trillion euros, one of the highest in the developed world. Figures of this magnitude cannot simply be ignored.
But even allowing for this fiscal context, the Government has made substantial commitments to improving housing supply. The recently launched Housing for All strategy commits to increase housing supply and affordability by targeting the delivery of, on average, 33,000 new homes every year to 2030. This includes the provision of over 10,000 social homes per year and an average of 6,000 affordable homes to purchase or rent.
From a fiscal perspective, this strategy is supported by significant investment of over €4 billion in State funding every year to 2030 - this is the highest level of funding ever for house building.
So, from an overall perspective, Government is achieving the right balance in its approach: gradually reducing borrowing for day-to-day expenditure, while expanding capital spending, including in housing, to address supply bottlenecks.
