Social Democrats want €120 million modular home factory

By Cillian Sherlock, PA

A new tourist tax, a targeted energy credit for low-income households, and a €120 million modular home factory are among the measures in the Social Democrats’ alternative budget.

The party said it would also abolish the means test for the carers’ allowance and increase it by €15 per week, ensure free school transport and eradicate voluntary contributions, and create a second tier of child benefit.

The Social Democrats are calling for an increase in the national minimum wage by €1  per hour, a €1 billion wind energy fund, free GP care for under-12s, and €10 million worth of books for school libraries.

Party leader Holly Cairns took aim at the last coalition’s budgetary approach, as she said one-off measures and untargeted payments are “not the right approach”.

Outlining the overall vision for her party’s strategy on Wednesday, she told reporters at Leinster House: “We will be focusing on lifting children out of poverty, on addressing the cost of disability payments, on abolishing the means test for carers, on bringing down the cost of childcare and, finally, rolling out the public model of childcare and building affordable homes, as well as addressing the rising energy costs in a targeted way.”

The Social Democrats said they could lift up to 40,000 children out of poverty, with a new second tier of child benefit at a cost of €772 million.

They would increase State-led supply of affordable homes by investing €120 million in “modular home factories to rapidly turbocharge delivery”, funded by the removal of subsidies for developers.

Under a state construction company, the Social Democrats said a modular home factory could produce 2,000 homes every year, and such factories could be rolled out across the country.

Asked about the removal of incentives for developers, party housing spokesman Rory Hearne said: “What we set out in the budget is a very clear step change in the role of the State.

“We’re not saying there’s no role for the market at all, we think that there is a role for private development and, in fact, the local authorities should do what they did in the past, which was to directly hire builders to build alongside, building up State capacity.”

All the advice that we've been getting is we need to broaden the tax base if we're going to have good servicesFinance spokesman Cian O'Callaghan

Mr Hearne said the argument that developers need tax breaks because it is too expensive to cover the cost of building is a “decades-long strategy of developers to push for as much profit as they can”.

He added: “Even with the various schemes that are in place, there’s no massive increase in supply.

“And the question is, do we want to incentivise, give taxpayers money for the building of more build-to-rent apartments that no one can afford to build, or do we want to use that money to invest in the building of actually affordable housing through the State?”

The party has also allocated €1.32 billion for the building of 12,000 new social homes and 10,000 affordable homes on top of what the Government has already allocated to this category.

A new energy credit worth 400 would be targeted at households in the lowest 40 per cent of incomes, or a household income of €45,000.

The measure would apply to 800,000 people and cost €320 million.

The Social Democrats said they would raise €805 million by phasing out income tax credits for the highest earners, from more than €100,000 to a “full removal” for those on more than €140,000.

Party deputy leader and finance spokesman Cian O’Callaghan said this would be used to fund an increase of €300 in tax credits for low and middle-income thresholds.

On the €5 per-night tourist tax, which would be collected through accommodation providers, Mr O’Callaghan said: “All the advice that we’ve been getting is we need to broaden the tax base if we’re going to have good services.

“And you know, developing tourism is about having good services as well, and good funding streams for that as well – it is about quality.

“And we also know that hotel bedroom prices aren’t always set just in terms of the cost of provision. Often savings aren’t passed on to consumers, so we do think there’s a good case for having that funding.”

Mr O’Callaghan also said the party does not support a VAT cut for the hospitality sector.