I thank the Chair and members of the Joint Committee on Enterprise, Tourism and Employment for the invitation. I am the executive director of the independent non-partisan think tank, Progress Ireland. I will start by explaining who we are, how we work, how we are funded and what we are trying to achieve. We were founded in 2023. Our board is made up of Fiona Cormican, former CEO of Clúid Housing; Jim Breslin, a former Secretary General; Donal de Buitléir, chair of An Garda Síochána; and Brigid Laffan, chancellor of the University of Limerick. We work on housing, infrastructure and innovation policy. Our modus operandi is to connect Ireland to policy solutions with a proven track record from overseas.
How do we choose which policies to focus on? Our policy choices are determined by three important values. The first is that we believe in building as a general purpose tool for solving policy problems. Ireland’s most pressing problems, from competitiveness to the cost of living, climate, inequality and polarisation, will be solved only by building. Ireland needs to build not just new housing, but also infrastructure, companies and new institutions. The second value is that we believe State capacity is important. We believe the State should be capable of following through on its priorities, whatever they may be. We believe in reforming the State so that it can better follow through on its goals. The third value is that we believe in progress. We believe the world can be much better than it is and that Ireland could and should have the highest living standards in the world.
The next point is about our funding. We are often asked who funds us and what influence our funders have over our policies. These are legitimate questions. We are funded by private philanthropy. Our funders support us because they share our values and believe in our policies, not because they have any influence over the policies we work on. They do not benefit directly from our policy work and we publicly disclose all material funders.
Turning to the second section of my statement, I will touch on our diagnosis of the problems Ireland is facing before we get through to the solutions. This committee is concerned with competitiveness and the cost of doing business. Ireland is a country beset by shortages of physical things such as housing, power, water, trains and ports. Ordinary people experience these shortages in the form of high rents, a high cost of living and queues for homes. Business owners experience them as the cost of doing business and forgone investment. We think these are two sides of the same coin. Investment, on both big and small scales, is bottlenecked by our housing and infrastructure. Citing lack of housing, a big investment bank has chosen Amsterdam over Dublin for its post-Brexit EU headquarters. At the other end of the scale, small enterprises struggle to pay their workers a wage sufficient to cover their rent.
Progress Ireland’s high-level diagnosis of Ireland’s situation is that there is extraordinary demand to live, invest and employ in Ireland and that the State is struggling to build enough to keep up. I have circulated four charts that make that case in a very simple high-level way.
If our first point is that there is a surfeit of demand relative to supply in Ireland, our second is that, in Ireland, money is usually not the bottleneck in solving these problems. We have had plenty of money for the guts of 30 years but, despite this, projects are often slow to get started and to finish. The bottleneck is often elsewhere. Progress Ireland sees its role as identifying and helping to remove these bottlenecks.
Moving to the third section of our statement, having identified who we are and how we work and our diagnosis of the problem, I will lay out the sorts of solutions we have in mind. I will briefly describe four policies we are working on. Each one has the potential to have a big impact on the cost of doing business; each has a strong track record internationally; and each is practical and implementable.
The first is land readjustment. This may be unfamiliar. It is a policy that has been used in 30 countries internationally, including a lot of European countries. However, the biggest proponent of land readjustment is very far away. It is Japan. It is an unfamiliar idea so I will start right at the very start. Thinking about Irish building, housing and land, what do we need? What is the problem? We need hundreds of thousands of homes. We need a step change in the rate of delivery of new homes. We need these homes to be well located near jobs. We want them to be in nicely master-planned walkable communities rather than being built higgledy-piggledy wherever we can fit them. We want to do this without emitting lots of carbon. Building these sorts of communities is going be expensive but we need to do it without bankrupting the nation. Land readjustment is a tool designed to solve this problem. It is used to master-plan neighbourhoods at scale so that they are self-funding. It is used in many places and has a proven track record. Some 30% of urban Japan was built using this tool. How it works is that a qualified majority of landowners in a designated area, perhaps a two-thirds or three-quarters majority, decide to pool their land. They give up roughly a third of it for infrastructure such as roads, parks and the public realm. They give another proportion of it to the planning authority, possibly the council, which sells the land and uses the proceeds to fund the infrastructure. In return, the landowners receive back plots that are smaller but that are serviced and much more valuable because infrastructure will have been built and its zoning will have been changed.
The second policy I will describe, which is a natural complement to land readjustment, is electrified rail. Land readjustment is good at assembling large plots of land at scale so that really big developments of 10,000 homes or more can be built. If you are going to build at that scale, you need a different category of infrastructure to do it. Electrified rail is in that category. Rail in Ireland has been discussed mainly in terms of its environmental benefits. The big proponents of rail have come from the Green Party. We are missing something here, however. Rail's real superpower is its capacity. Rail can move massive numbers of people. In a rail network that has been fully invested in, one rail track can move as many people as 42 lanes of motorway. Once you internalise that, you start to see the potential of pairing it with ambitious housing investments. If we can move a lot of people, we can build quite large developments, we can build intensively and use the land value uplift to pay for things. It all becomes possible. Rail is what enables large numbers of people to be moved around, which enables everything else. That is what goes well with land readjustment.
Street votes are a first cousin of land readjustment. They are a different type of tool, however. Where land readjustment is about master-planning very large communities, street votes are about gently densifying our suburban areas. Most of the jobs we have added in Ireland have been added in towns and cities. The trouble with that is that it is in urban areas that it is hardest to build new homes. The result has been higher costs for business and longer commutes. Street votes are designed to resolve that. In a similar way to land readjustment, this policy works on the basis of a qualified majority vote. The residents of a very small area, like a street, get together and agree a mutually amenable planning scheme at the level of that street and pass it or not based on a qualified majority vote.
You could say the last policy we are working on that I will mention is about MetroLink but it can be generalised to all of the most complex projects the State works on. As Ireland gets bigger and richer, it is going to have to deliver bigger, more complex and more ambitious projects, especially in respect of infrastructure. The children’s hospital is a good example, but it will not be the last. MetroLink is another one.
The DART+ tunnel, which we are big proponents of, is another example. Better government software might be one such project also. When it comes to complex projects, there is a proven path to delivering them smoothy, quickly and efficiently, which is for the Government to employ and empower more experts.
In the context of MetroLink, I circulated a chart, which I will quickly describe. It shows the average cost of building 1 km of metro tunnel. From eyeballing the chart, members will see there is a big dispersal. At the more efficient and cheaper end, there are Spain, Portugal, South Korea, Finland and Türkiye. They are building that 1 km at approximately 10% of the cost that New Zealand, the United Kingdom, Hong Kong and Belgium are paying. There is huge dispersal. Basically, the most expensive places are where there has been a failure to take account of the message that governments need to employ and empower experts to deliver complex projects. When that is not done in the MetroLink domain, this is what happens.
In the case of our MetroLink, employing market-rate experts and giving a team of them control over the project for, say, ten years might cost in the region of €50 million. However, as members can see, the dispersal of potential costs for a project like MetroLink goes from maybe €11 billion up to somewhere in the region of €20 billion or €30 billion. There is a huge range of outcomes on the table. That is why it is worth investing in State capacity to deliver these complex projects.
I will stop there. I thank the committee for the opportunity to speak and I welcome questions.
