Government could substantially increase the resources available to finance social housing by invoking the structural reform clause contained in the EU’s Stability and Growth Pact.This clause allows Government’s to cater for the short-term costs of implementing structural reforms that will have long-term positive budgetary effects.
While additional ‘off-the-books’ financing would still be required, this clause would allow for substantial additional ‘on-the-books’ financing to be available to address one of the biggest scandals of Ireland’s current reality - the lack of appropriate accommodation for more than 90,000 low-income households.
Details of this flexibility clause were clarified by the European Commission last year in response to the European Central Bank President Mario Draghi’s speech where he stated that “the existing flexibility within the rules could be used to better address the weak recovery and to make room for the cost of needed structural reforms.”
Investment in social housing will yield significant returns in terms of both employment and productivity, and will also address one of the largest infrastructural deficits in Ireland today. If Ireland is to have strong long-term macroeconomic stability and a vibrant economy then a substantial increase in the level of public investment is required.
It is not possible to achieve every policy outcome in a single Budget; however it is possible to lay the foundations of a vibrant, just and sustainable economy and society by introducing a coherent package of measures. Decent services and infrastructure, just taxation, good governance and sustainability are essential if the economy is to be stable and vibrant, and grow in a way that is suited to the development of a society characterised by justice, equality and well-being. In order to deliver this, public investment must be a priority in Budget 2017.
Government must take responsibility to explore every avenue towards resolving Ireland’s social housing crisis. It is imperative that the structural reform clause be explored to increase finance available in Budget 2017.