The Government’s Action Plan for Jobs, which is co-ordinated and developed by my Department since 2012, has set out a comprehensive set of measures to rebuild a sustainable enterprise economy, based on innovation, entrepreneurship, talent and exports. The Action Plan process is working. Over 126,000 more people are at work since the launch of the first Action Plan for Jobs in 2012, exceeding the original target of an additional 100,000 jobs by 2016, 21 months ahead of target. The rate of unemployment has declined from a peak of 15.1 per cent at the start of 2012 to below 9.3 per cent in September 2015. We are not complacent about the requirements to sustain the momentum of job creation across the range of policy areas that impact on the environment for business and competitiveness and efficient labour market operation, including issues relating to the property market.
The adequate supply of quality, affordable housing, in the right locations, is a contributing factor to Ireland’s overall competitiveness. For example, it contributes to Ireland’s attractiveness for Foreign Direct Investment (FDI), for mobile talent, and house price inflation can feed into wage pressures which in turn can impact on our competitiveness. This is particularly true in urban areas where employment growth is especially strong, and housing supply is still suffering from the impact of the property crash.
Following several years of significant cost reductions – in terms of both construction and rental/purchase costs, property costs are again emerging as an issue to sustained cost competitiveness. The link between house prices and wage expectations means that developments in the residential property sector do impact on international competitiveness.
The Government is addressing the shortage of supply in a number of ways. Construction 2020: A Strategy for a Renewed Construction Sector , which was published last year and drew on analysis and research by Forfás for my Department, is aimed at addressing issues in the property and construction sectors and ensuring that any bottlenecks that might impede the sector in meeting residential and non-residential demand are addressed.
The regulation of the rental market raises many complex economic and legal issues. Measures proposed have to be balanced and have the desired effect on the rental market while being fair to landlords and tenants alike. I understand that my colleague the Minister for the Environment, Community and Local Government intends to bring proposals in relation to the rental sector to Government for decision as soon as possible. Ultimately, any decision in relation to this issue is a matter for Government.
The Government has also prioritised social housing, as set out in the Government’s Social Housing Strategy 2020 and the €2.9 billion in funding under the Government’s capital plan. In Budget 2016 investment in housing infrastructure was given priority with a total housing provision in 2016 of €923 million. NAMA is aiming to deliver a target of 20,000 residential units before the end of 2020 with 90 per cent of these units to be in the greater Dublin area.
In addition, the Regional Action Plans for Jobs, which my Department is developing with stakeholders in all regions this year, has placed a strong emphasis on creating attractive places where people can live and work, with consequent links to the competitiveness of the environment for start-ups, innovation and entrepreneurship. The progress in creating attractive and competitive environments for business in the regions, across all the key dimensions including property solutions, will be part of the work of the stakeholder Implementation Groups for the Plans at regional level.
