Housing crisis is ‘drag’ on foreign direct investment - Varadkar

Tánaiste does not think difficulty in accessing housing will result in ‘major slowdown’

Tánaiste Leo Varadkar has said the housing crisis is a drag on inward investment, and is regularly raised with him by executives in multinationals.

Launching an updated white paper on enterprise policy in Dublin on Wednesday, Mr Varadkar said: “Is the housing shortage a drag on investment, yes it is.”

“When I’m meeting the senior executives and board members of big companies that are thinking of investing in Ireland, they do ask about our infrastructure – is there enough housing for the workers they want to come in, is there enough electricity, is there going to be enough water and waste water – so infrastructure is definitely a barrier to further growth in Ireland,” he said.

The Tánaiste said the main focus of the Government is to try to address the housing crisis due to its impact on citizens, rather than because it is proving to be an issue for investors.

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“It is an issue for enterprise policy, but when we try to fix the housing crisis in Ireland, it’s primarily about concern for our own citizens, rather than corporations,” he said. Mr Varadkar said he did not believe there would be a “major slowdown” in foreign direct investment (FDI) next year, adding the IDA would produce strong results next week and the pipeline, especially in life sciences and manufacturing, was “really strong”.

He said it was not possible to quantify how much of a drag housing shortages may be causing but said it had not resulted in investment going down.

The new white paper follows a review of enterprise policy and a public consultation. It seeks to “protect Ireland’s strong economic position” and “respond to challenges and opportunities that have emerged as a result of the pandemic, wider economic and geopolitical developments, digitalisation and an increased urgency to decarbonise industry”.

It contains a stipulation that enterprise agencies like IDA Ireland and Enterprise Ireland are to incorporate carbon abatement as an objective “equal to, and alongside, employment and value-added”.

The paper contains new targets for the Irish-owned exporting sector, including a 2.5 per cent average annual growth in Irish-owned enterprise productivity by 2024 and a 50 per cent increase in the number of large Irish exporting companies by 2030.

It outlines a target that “at least half” of all FDI investments are to be located outside of Dublin, while Enterprise Ireland will be mandated to create over two thirds of its new jobs target, amounting to 30,000 new positions, outside Dublin.

Mr Varadkar said infrastructural deficits mean Ireland is “running up an escalator that is coming down at us”.

“Our infrastructure is not up to scratch, and when you compare us to other European countries that’s clear,” he said, adding they were “rich for a lot longer than us”.

Jack Horgan-Jones

Jack Horgan-Jones

Jack Horgan-Jones is a political reporter with The Irish Times