OECD warns of 'heightened concerns' over housing affordability in Ireland

Body seeks “bold reforms” for Ireland to lower emissions from agriculture, to tackle a longstanding “de facto two-tiered” healthcare system.

Wed, 14 Dec, 2022 - 10:00

Eamon Quinn

The Government will need to push changes to the planning system as building shortages and a sharp rise in house prices threaten to make accommodation too expensive for many families, according to a major report from the Organisation for Cooperation and Development.

In its latest major country report, the OECD also seeks “bold reforms” for Ireland to lower emissions from agriculture, to tackle a longstanding “de facto two-tiered” healthcare system and urges the Government to raise the retirement age for State pensions.

The Paris-based organisation periodically carries out national reviews of all its member governments and lays out in this report three “key messages” for the Irish Government to get the best out tax revenues to fund significant spending programmes in the future.

The Irish economy, the report says, did well during the Covid pandemic and is performing better than some other countries during the latest crisis as households and businesses battle huge price increases.

However, the exchequer faces serious demands on spending following “past underinvestment" in building new homes. Meeting the demands for spending on climate goals, and securing reforms in the healthcare system through Sláintecare “will be difficult to resolve quickly”, according to the report.

On housing, the OECD wants continuing investments in apprenticeships, calls for a “streamlining” of the planning process and supports setting up a division in the High Court specifically to rule on planning decisions.

It warns the spike in building cost inflation this year will pose new challenges for the Government’s Housing for All programme, which it says, “will take time to deliver significant results”.

“It will be important to prioritise supply-side measures as policies that stimulate demand further given the existing supply-demand imbalances could increase price pressures in the near term,” the report says.

On healthcare, it recommends the planned reforms through the Sláintecare programme, but seeks resources for homecare, and wants to drive efficiencies by introducing better financial reporting and health management systems.

However, the report says the issues facing the health system after years of underinvestment are “slowly being corrected”. It warns about a “de facto two-tiered” system in which private patients effectively jump waiting lists, and says that “working conditions, particularly during the Covid-19 pandemic, are difficult and attracting and retaining [healthcare] staff is a concern”.

To ensure sufficient Government spending for the future, it wants the Government to recommit to increase the pension age, a policy it recently dropped.

For climate change, it wants urgent changes to planning for wind turbines and calls for a new focus on encouraging fewer people to own cars. It also signals out emissions from farming, warning that “achieving methane emission reductions has proven to be difficult and the dairy herd has actually been growing, making the targets even more difficult to reach”.

The report says the Irish economy performed better than some of its OECD peers during the Covid crisis. However, the economy as measured by modified domestic demand will grow by less than 1% next year, as inflation pressures bear down on consumption.

“Ireland faces challenges to sustain growth and improve well-being over the longer term,” the OECD says.

“To wit, the country’s ambitions to overhaul the health system to improve quality of care and value for money, ensure affordable housing and achieve a just carbon transition. In each area, substantial public spending is potentially needed, and ensuring spending efficiency will be required,” it says.