Taoiseach Micheál Martin’s coalition government has committed to raising public spending by an average of 7.4 percent a year over the coming three years. The Irish Fiscal Advisory Council says that spending will swallow 90 percent of expected corporation tax proceeds, begging the question of how those commitments will be financed if and when those proceeds do dry up.
Makhlouf said Dublin needs to broaden the tax base by implementing the recommendations of a report by Ireland’s Commission on Taxation and Welfare, set up by the previous government.
That report, which urged raising taxes on capital and wealth, eliminating VAT loopholes and a host of other surefire vote-losers, has been gathering dust for three years while the corporation tax bounty kept flowing.
Micheál Martin’s coalition government has committed to raising public spending by an average of 7.4 percent a year over the coming three years. | Kenzo Tribouillard/AFP via Getty Images
The government published a 12-point action plan on accelerating the permissioning process in December, which Martin promised would provide “a comprehensive roadmap of targeted actions to tackle the core barriers to delivery of housing, energy, water, public transport and roads infrastructure.”
Housing crisis brewing?
Irrespective of corporation tax receipts, Makhlouf warned that Ireland is already bumping into constraints that will stop it growing. Above all, he said, the country needs more houses, and quickly. A lack of them in suitable places is stopping businesses from going ahead with planned expansions, he argued.
“As I travel around the country, I’m hearing people say ‘Well, actually, we want to expand here but we can’t, because we can’t get the people or they can’t commute in easily; so we’re thinking about going elsewhere.’”