Budget 2018: Reading between the lines of Donohoe’s speech

Minister’s plans on ‘more appropriate accommodation’, sugar and Brexit decoded

Corrosive crisis

“I am very aware of the corrosive impact on Irish society of homelessness. I am also aware that many people living in the private rented sector wish to find more appropriate accommodation or move to their own home, but at the moment cannot do so.”

The Minister’s blissfully cough-free speech was – appropriately enough – delivered on a date that was designated both World Homeless Day and World Mental Health Day, two issues that often overlap. Donohoe characterised homelessness as the sharpest end of a spectrum of thorny housing issues, for which the most obvious solution in his mind is to increase the supply of homes. When he talks about “more appropriate accommodation” here, he means somewhere that doesn’t involve paying extortionate rents for foldaway beds in miserable, mould-infested rental properties, or indeed seeing such dismal places listed on Daft.ie and crying because you can’t afford even that.

Housing perspective

“Our actions to support the housing sector, though, are bearing fruit. Commencement notices for new housing are up 47 per cent. Planning Permissions are up 49 per cent. And we are increasing our ambitions for what we will build directly.”

This percentage increase in residential housing commencements sounds respectable, even good, but the phrase coming from a low base – a very low base – has rarely been more apt. Department of Housing statistics show that there have been just under 12,000 housing commencements in the first eight months of the year, indicating the annual total will be about 18,000. To put this in perspective, analysts at Davy Research say the State’s true housing need between now and 2021 is “at a minimum” 35,000 units a year and is “perhaps as high” as 50,000 units a year. So it really is time to get the shovels out and build some decent places to live.

Sugary shove

“I am introducing a tax at a rate of 30 cent per litre on drinks with over 8 grams of sugar per 100 millilitres and a reduced rate of 20 cent per litre on drinks with between 5 and 8 grams of sugar per 100 millilitres.”

Anyone for a Diet Coke? How about a fat Sprite? (Its sugar content falls into the 5-8 grams bracket rather than higher-taxed fat Coke bracket.) Donohoe’s confirmation that a sugar tax will be implemented from April has come in a week in which US economist Richard Thaler won the Nobel prize for economics for his work on “nudge theory”, which espouses the idea that humans can be subtly guided in the direction of what’s good for them without heavy-handed interventions or compulsion. In this instance, relegating sugar-laden drinks to awkward corners of shops would constitute a “nudge”, while a sugar tax is more of a full-on shove. In a full year, it’s also expected to be a €40 million bonanza.

 

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