Arguably one of most consequential decisions the incoming government will make is what to do with the €14.1 billion in back taxes that Ireland has accepted – reluctantly – from Apple. The money should all have arrived in the State coffers by early next year and it will be the responsibility of whoever is in power to get the most out of this potentially transformative amount of money.
Will the next government resist the temptation to use it for short-term spending – and reap the political dividend – or will it invest in infrastructure that will deliver a benefit over the coming decades.
Fine Gael
Fine Gael has promised to say what it will do with the money within 100 days of being re-elected. This is sensible given that if the party returns to government, it will be as part of a coalition.
That said, it is a little concerning that they have no clear idea of what they want to do with the money other than channel it into housing and the Land Development Agency (LDA); water and sanitation; energy grid improvements; transport and road infrastructure.
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The last three fall into the realm of long-term investment and as a result are unlikely to yield much of a political dividend in the short term. The plan to pump money into the LDA is more complex and politically appealing.
The LDA is one of the vehicles through which the State operates affordable homes schemes under which it directly, or via a local authority, takes a stake of up to 30 per cent in new homes. It also runs a cost rental scheme.
These measures treat the symptoms of the property crisis rather than cure it. They subside purchases and help keep property prices unsustainably high, but they also make sense politically as no government ever got elected by bringing down house prices. The direct beneficiaries of the schemes’ essentially short-term expenditure will be house buyers (ie voters) and housebuilders. Absent a reboot of the LDA approach it will not create a public asset.
Fianna Fáil
Fine Gael’s most likely coalition partner, Fianna Fáil, seems to be on board for using the Apple money to subsidise house prices. It has earmarked €4 billion for LDA.
After that the party’s choices seem a little longer term.
There is €2 billion for a towns investment fund to build and upgrade infrastructure to open up more serviced sites for building homes and €2.5 billion in capital spending on the electricity grid. They commit €3 billion to upgrade the water infrastructure and €3.6 billion to improve transport networks.
The single biggest point of difference is on housing. Fine Gael and Fianna Fáil want to fund the continued subsidisation of private home construction and ownership. Sinn Féin and Labour plan the creation of a State asset instead; either a large body of State-owned housing or a State-owned housebuilder
They also want to spend €2 billion digitising the health service, which has could be transformative in term of costs and delivery. But it’s also the sort of black hole where hundreds of millions could be spent with little to show for it.
Sinn Féin
Unlike the other two large parties Sinn Féin is no fan of the LDA and the various subsidies it administers and has committed to spending €7.6 billion on public housing which would leave a legacy, as would the €2 billion is says it would spend on building new hospitals. It also commits €2.5 billion to the energy grid.
In terms of short-term spending that would not create a public asset but deliver votes, it has promised €1 billion fund for “working-class communities” hardest hit by austerity and another €1 billion for rectifying defective buildings from the Celtic Tiger period.
Green Party
If they make it back into government the Greens plan to use €7 billion of the Apple tax money and €3 billion from other sources to ensure that big transport projects such as MetroLink, Dart+, the Luas extension and rail projects in Cork, Limerick, Galway and Waterford start construction.
They don’t set out any specific plan for the rest of the money. Perhaps a tacit acknowledgment that they would have to roll along with their coalition partners’ plans.
Labour
Labour also wants to give a big chunk of the Apple money to the LDA, but it will be used to seed a State construction company rather than subsidise the purchase of privately built houses. It’s an appealing idea but creating a State company from scratch is a good way to spend money with little return in the short term at least.
Labour also wants to spend €1 billion on water infrastructure and servicing of land as well as €2.5 billion for a national retrofitting plan. Some €2.5 billion is earmarked for big public-transport projects and balanced regional development. There would also be €1 billion for direct equity stakes in offshore wind developments and €1 billion for health to create a Sláintecare transition fund. Another €500 million would be dedicated to support the roll-out of digital health records in the new regional health areas.
Who has the best idea?
There is significant overlap between all the parties in areas such as energy, water and transport infrastructure, all of which will enhance or create a long-term public asset. The single biggest point of difference is on housing. Fine Gael and Fianna Fáil want to fund the continued subsidisation of private home construction and ownership. Sinn Féin and Labour plan the creation of a State asset instead; either a large body of State-owned housing or a State-owned housebuilder. Given that up to half of the Apple money could be involved there is a clear and important choice for voters.
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