Home truths: Big time housing promises without taxes are hollow
What can you get for €16bn these days?
Well €16bn is the total amount estimated that Irish people will spend online this year. The Consumer Market Monitor (CMM) says this will mostly go on tangible goods, but also paying for flights and services like topping up our mobiles.
If you want to fly high with the dosh then Emirates recently demonstrated that you can grab 50 new Airbus A350s on those big shekels.
And as it so happens, the HSE committed to spend €16bn on health services in total for last year (it didn’t stick to it). And €16bn is four years worth of the entire national Universal Social Charge (USC) tax take. Also €16bn is 10… sorry nine… (correction again), eight (watch this space) national children’s hospitals. Plus €16bn makes up one fifth of the entire estimated cost of the bailout for all our errant banks. You get my point. It’s a mouth-wateringly gargantuan amount of cash.
Because €16bn is what I’d estimate that it would cost to build enough dwellings to house every one of the 70,000 families languishing on our social housing waiting lists. And only if we can keep the spend down to €230,000 per unit provided.
Lots of people (including yours truly) are convinced that the State needs to return to the traditional method of building and holding social housing as managed by councils from the 1920s until the 1990s. The fact that big investment funds are falling all over themselves to get into Irish housing right now (traditionally they never touched it) shows that the State could not only fulfil its social responsibilities, but it could also turn a profit for the taxpayer. We don’t have to rent social homes at peppercorn rates as councils have done in the past. Even with rent charged reasonably and in accordance with earning capacity, social housing has the capacity to become a decent long- term saving and indeed an investment for the State.
Problem one is that when it comes to building anything at all, we’re dealing with a Dermot Bannon civil service that can’t seem to stick to budgets in any national construction venture with roads, Luas, infrastructure and lately the infamous children’s hospital many times exceeding estimates (and don’t ask them for a printout!).
The second problem is that great big fat €16bn. Because when it comes to funding the State-build solution, this is not so much the elephant, but more like the brontosaurus in the room. For the Irish Exchequer it represents about €3,000, per every person living in the State today, or about €10,000 for every household.
I’m raising the subject of the €16bn because there’s an election coming next month in which housing and health will be key voter concerns. We’ll be doorstepped by prospective candidates for other potential Governments pitching their solutions. Some will pitch the State build-and-hold solution.
At this point we know the game form of the current incumbents. Fine Gael is a tax less party that has arguably moved slightly more to the right under Leo Varadkar. FG has pursued a largely private sector driven approach to solving the crisis, one which has generally eschewed the traditional State build-and-hold solution favoured by Governments here until the Margaret Thatcher inspired bargain bucket sell-off of State housing assets from the 1980s on.
Fine Gael favours getting funds, private landlords, NGOs, nuns and priests to do the running when it comes to solving the housing crisis. But by now we know where it’s coming from and what it stands for.
What we should beware of in the weeks ahead are the claims of other political parties. Some will promise a return to the State build-and-hold solution. And the first thing we need to ask them is where is the €16bn cash brontosaurus coming from?
The recent election in Britain and previous bouts here have proven that you can promise the sun, the moon and the stars; but that stating the obvious: that the sun, moon and stars cost money and maybe higher taxes, amounts to electoral hara-kiri. Perhaps even if it involves solving a social emergency. But next month exactly what we want to do about that crisis will land right back on our own front doorsteps.
When it comes to our healthcare system (the other great bugbear likely to feature on the doorsteps) things are a little bit different. There’s evidence that we squander resources, spending as much per capita on health as any other European country, but for less. An argument can be made that sorting it out doesn’t necessarily require more cash.
But in contrast, if we really do want an end to homelessness, children living in hotels, to low earners being rack rented; and if we want to support a State build-and-hold housing solution that some parties will pitch; then we all need to face a simple reality: that it must be paid for largely by us. That €16bn only covers those currently on the lists.
It doesn’t touch the 84,000 tenancies which Rebuilding Ireland estimates will be claiming Housing Assistance Payment (HAP) in the private rental sector by 2021. These are excluded from the housing lists as “solved”.
If you’re being asked to vote for a build-and-hold solution for social housing, understand that this involves a requirement for more tax to fund it, or else the cash must taken from somewhere else, like health or education. If someone doorsteps you and says otherwise, then tell them out flat that they’re a liar. Pants blazing and boxers a-flaming fairy tales.
But if it’s you that expects a new government to promise to build those social houses, but without you coughing up any more tax to get it done; then you’re the one with the delusions.
And you deserve all the promise-everything /fix-nothing governments that you get.
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