The delivery of 300,000 new homes over the next five years, which would include 100,000 social, affordable and cost-rental units provided directly by the State, should be a priority for the next government, Ibec has said.
In a pre-election manifesto, the employers’ group said the State’s ability to respond “to capacity pressures in housing” was the single biggest threat to competitiveness and economic wellbeing.
Construction of between 50,000 and 60,000 homes per year was needed to break the logjam, it said, while noting the supply would need to involve a combination of owner-occupied as well as renting households.
“We need the right mix of housing in the right areas, in accordance with suitable and sustainable development practices,” it said.
Amid heightened speculation that the Government will call a general election after the upcoming budget, Ibec said the next administration needed to make strategic investments, funded by strong tax revenues, in areas that were “hindering growth”.
“These include speeding up infrastructure delivery, investing in public services, enhancing lifelong learning rates, and reducing regulatory burdens,” it said.
To improve domestic competitiveness, the group also called for the entry point to the top 40 per cent rate of income tax (which currently applies to incomes above €42,000) to be raised above the average full-time wage, estimated at just under €50,000.
Ibec also called for the State’s income tax base to be widened.
“More workers should pay tax, and this can be achieved very gradually through non-indexation or partial indexation of the entry points to the personal tax and universal social charge (USC) net,” it said.
According to a recent report from the Department of Finance, about 7 per cent of income earners, equating to 251,000 “taxpayer units”, are exempt from income tax entirely. And while 64 per cent pay the standard 20 per cent rate, a significant portion (about one million) have their income tax liability covered by tax credits.
In its manifesto, Ibec also warned that the landscape for Irish exporters in global markets was likely to become increasingly challenging, with the battle to attract new investment likely to intensify during the next government’s term.
It linked this to the rise of state-driven competition for investment, increasing geopolitical tensions and decreasing trade openness. Ibec also called on the next government to undertake a benchmarking exercise of Irish energy costs and their drivers relative to competitors amid concern energy costs here were out of kilter with those in peer countries.
“The upcoming general election will be one of the most consequential in recent times. Elections always present an opportunity to reframe the challenges that drive society,” Ibec’s Danny McCoy said.
“As we look toward the next general election, the economy is in a position of real strength. Our message to all political parties is that business and economic growth will underpin much of the progress we hope to see during the next government’s term. Therefore, it is essential to ensure that policies support domestic business growth while enabling new waves of investment by global companies.”
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