Conor McCabe: On 26 July 2021 Cork City Council called on ‘residents, workers, the business sector, community, sporting and voluntary groups in the city and beyond to have their say’ on the proposed 2022-28 Development Plan, with submissions open until 4 October. This was extremely nice of them, but it is also clear that as far as the Council is concerned all the major investment and planning decisions have already been made.
It has left a mere 12-week window from 4 October until 31 December to make any adjustments based on the ideas of the public. The decisions around transport, housing, the docklands, and other so-called regeneration projects are years in the making and have already been signed off on at local and national level.
Conor McCabe discusses the truth about the government’s summer economic statement and the continuation of austerity through high rents, low wages, increased costs and a lack of investment in our social infrastructure.
Last week the government published the Summer Economic Statement and laid out the broad spending parameters for the budget in October.
Released late on Wednesday 14 July, less than 24 hours before the Dáil summer recess, it was quickly hailed by the media as proof positive of a dramatic and significant turnaround in economic policy by the government parties of Fianna Fáil, Fine Gael and the Greens.
The Irish Times stated that the apparent change in direction was ‘undeniably linked to the housing crisis and the political fallout awaiting Coalition parties if the status quo continues’.
At the same time the Irish Independent loudly proclaimed that Paschal Donoghue had loosened the purse strings, with the expected post-pandemic boom funding ‘four years of tax cuts’.
The good times, it seems, are on the horizon. The government has learned the error of its ways.
Only The Journal.ie voiced a note of caution, having read the actual document instead of just quoting from the executive summary and assorted press releases.
It found no specific financial allocation to housing anywhere in the Statement, merely a commitment to fix the housing crisis – which is, after all, already government policy.
‘We don’t know exactly how much the Government plans to allocate specifically to housing in Budget 2022’ it said. Nor will we have a clear idea until the Housing For All strategy is published on 26 July.
In fact, far from being a dramatic change in direction, the Summer Economic Statement reveals a government and a state that remains in thrall to the market and the fiction of tax-cut-led growth.
In terms of expenditure, the Statement says that the government will allocate an extra €1.1 billion to capital projects in 2022. (Sinn Féin has pointed out that once allocations are made to the Brexit Adjustment Reserve, in reality this figure will be in the order of €800m.)
This extra funding will stretch across all government departments, including not just housing but health, education, transport, as well as climate action measures.
To put that into context, the ESRI recently said that the state would need to spend an extra €2 billion a year on social housing alone in order to have any chance of tacking the housing crisis.
Whatever measures the government comes up with in the Housing for All strategy and in the October budget, it is clear that any net increase in housing spend will be of the order of hundreds of millions, and nowhere near the €2 billion that is actually needed for 2022.
The one figure that is crystal clear in the Statement, though, relates to tax cuts.
At a time when the need for capital investment in our social infrastructure has never been stronger nor clearer, the government has announced €500m in tax cuts every year for the next four years.
In other words, instead of putting €2 billion into social housing, the government has instead committed itself to €2 billion in tax cuts.
This defies all logic and is completely geared towards the minority of voters in Ireland who crave such cuts over services – a minority that nonetheless in all likelihood votes Fine Gael.
This would explain why the Tánaiste Leo Varadkar has been calling for such cuts, despite a clear majority of people in Ireland in favour of investment in social services.
The Tánaiste and his party, with the support of Fianna Fáil and the Greens, are engaged in an ideological project that sees tax avoidance as a God-given right and to hell with the consequences.
For all their talk of the national interest, the government parties are pandering to their base with a rugged determination.
At the same time, there is a grain of truth in the ‘lessons learned’ line of the establishment media.
The Summer Economic Statement shows that there are no overt austerity cuts on the horizon for at least the next two years.
It has placed warning signs on the period 2024 onwards, saying that the EU fiscal rules in all likelihood will have returned by then, and that in 2023 the government will borrow for capital spend only.
This approach, however, will have the benefit of sparing the coalition government any attention-grabbing cuts to services.
However, austerity will continue as in its present form, through high rents, low wages, increased costs and a lack of properly focused investment in our social infrastructure.
This includes a lack of investment not only in housing, but also in health, education, transport, care (including childcare) – as well the type of visionary climate action plan that present circumstances demand.
And by investment we mean genuine public investment – not privatised outsourced solutions that end up costing billions with no net long-term benefit to the state.
The lack of an overt austerity agenda also means that for those of us on the left, there will be a need for a more focused and analytical approach to the right-wing agenda of Fine Gael, Fianna Fail and the Greens.
The devil, for the next two years at least, is going to be in the detail. Shouts of ‘cuts’ are not going to be enough, and with that in mind, now would be a good time to adapt our research and analysis accordingly.