Government committed to introducing sugar tax in budget

Varadkar says bedsits and high-rise apartments are part of response to housing crisis

Ministers, TDs, Senators and MEPs relaxing during a break on the second day of the Fine Gael parliamentary party think-in in Clonmel, Co Tipperary. Photograph: Barbara Lindberg.

The Government is committed to introducing a sugar tax in Budget 2018, Taoiseach Leo Varadkar has said.

Mr Varadkar said there was a number of revenue-raising measures being examined as part of the upcoming budget, including a levy on sugar and sweetened drinks and an increase in excise duty on cigarettes.

Speaking at the end of a two-day Fine Gael gathering in Co Tipperary ahead of the Dáil term, Mr Varadkar also said the reintroduction of bedsits and the construction of high-rise apartment buildings must form part of the Government's response to the housing crisis.

The Taoiseach asked councillors across the country to adopt a positive view towards development and higher-rise buildings.


“Maybe people might oppose them in the years gone by, but given the need to build housing, and quickly, we need to have a more positive view of all types of development.”

This also required the possible reintroduction of bedsits, the Taoiseach confirmed.

“It’s something that has to be considered. There is a housing crisis in Ireland, and while you are in a crisis situation you approve policies to do things that you wouldn’t do if there was not a crisis.

“So it is under consideration, but not in a way that would see any diminution of basic standards relating to fire or relating to public safety. That will not happen.”

On the budget, Mr Varadkar said the Government had little room for manoeuvre, but had committed to assisting the self-employed and reducing taxes for low and middle-income earners.


Mr Varadkar has also pledged to increase the old age pension by at least €5.

Asked how the Government intended to pay for such measures, Mr Varadkar confirmed there would be increases in taxation.

“I can’t obviously go into specifics today, but it would be typical enough for there to be an increase in cigarettes, that’s one of the things under consideration.

“Also, I’m a long-time supporter of the sugar tax, and I want to see that introduced next year, but I’m not in a position to get into details.”

The budget, the upcoming capital plan and the National Planning Framework were discussed.

Mr Varadkar said Fianna Fáil would have influence over this year's budget but insisted the party would not have the right to veto any particular announcement. In the event it declined to vote in favour of financial measures, an election would be called.

Mr Varadkar said: “I’m determined as I said to make this Government work and also make it last. I do notice that other parties are making preparations; they are already selecting candidates. We haven’t done that yet, but I think it would be unwise for any party not to prepare for a general election, and we will certainly be doing that.”

He said the budget would stick within the parameters of the agreement with Fianna Fáil.

Housing waiting lists

On the housing crisis, Mr Varadkar said that while committing to a significant investment in social housing, the Government also needed to offer assistance to those who were not on housing waiting lists.

Pointing to those living at home with parents or living in rented accommodation, the Taoiseach said the Government had to work out a means to ensure affordability in the market.

This would “ensure that people in their 20s and 30s who are working and who are now renting or living with their parents, actually have a chance to buy a home, that is going to be a big part of what we do.”

The Taoiseach also fleshed out proposals to re-purpose the National Asset Management Agency to become an agency for delivering housing.

Mr Varadkar said this was a Government initiative which was first proposed by former minister for finance Michael Noonan, and has been discussed with Nama over a number of months.

A final Government decision would be taken within weeks, the Taoiseach added.