Ministers set to approve summer economic statement with capital boost for housing

Senior Government ministers are understood to have reached agreement on the summer economic statement, which is now due to be approved by a special Cabinet meeting this afternoon.

The statement, which is one of the most important economic documents published by the Government over the year, was due at Cabinet yesterday but was delayed when Minister for Finance Paschal Donohoe and other senior ministers, including the Taoiseach and the Minister for Public Expenditure Michael McGrath, failed to reach agreement.

However, sources say that agreement has now been reached and a Cabinet meeting has been set for 4.30pm. It is expected the statement will be published on Thursday.

The Irish Times understands the compromise will see a big increase in capital funding for housing, set to be announced in a new policy plan next week, but also a firm commitment to cut the deficit in the coming years.

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Fianna Fáil – which holds the housing brief through Minister for Housing Darragh O'Brien – had been pushing for a significant jump in capital funding to finance a wave of public housebuilding, which will form the centrepiece of a new housing policy 'Housing for All', which is due to be published next week.

Mr O’Brien was backed in this stance by Taoiseach Micheál Martin, it is understood.

However, Mr Donohoe has been warning of the need to set a budgetary framework for the Government for the coming years, and was unwilling to commit to a big housing package without an agreement to reduce the current deficit in the coming years.

Sources familiar with the discussions said Mr Donohoe insisted on the need for binding commitments on deficit reduction – a move that will herald difficult budget discussions in the autumn.

Political tensions around housing were evident in the Dáil this afternoon where Sinn Féin leader Mary Lou McDonald claimed Fianna Fáil had "acquiesced with Fine Gael housing policies at every turn."

She asked if the economic plan would include a doubling of investment in housing as recommended by ESRI and an annual funding of €4 billion?

Mr Martin said the key to addressing the housing crisis would be supply, and not resources, and accused Ms McDonald of "pontificating," during a series of sharp exchanges.

Sinn Féin had come up with “very few, if any” solutions, and he accused her of “fraudulent politics” and of refusing to support a series of housing projects across Dublin.

The Sinn Féin leader retorted that “no amount of personalised invective, or ducking and diving and failing to answer questions can disguise the fact that this administration under the leadership of Mr Martin is failing and failing miserably”.

She also accused him of reacting “hysterically” when challenged about the summer economic plan.

The Taoiseach said the “issue in terms of tackling the housing crisis will not be one of resources but of getting them built”.

And he insisted that “I lead a Government that will get the State and local Government providing houses”.

He said: “The National Development Plan will also all outline the very significant capital investment that this Government is going to undertake and the housing for all strategy that the minister will publish will equally outline a step change in terms of the construction of housing, social, affordable right across the board.”