Ruth Coppinger (Dublin West, Anti-Austerity Alliance) | Oireachtas source

There is a running theme in the contributions from some of the organisations today. The witnesses have echoed the calls for VAT to be cut, for the mortgage income multiple to be increased to 4.5, for more cuts to development levies and for rural renewal tax break schemes.

A couple of aspects are unique to the representatives of the IPAV. One is that they want the Government to lend finance to builders, including small builders, at a rate of 1% to 3% because the lack of finance is an impediment to house-building. If the Government lends to builders at 1% to 3%, would the witnesses not agree it would be taking a very high level of risk? Property development is a very risky activity for low-risk interest rates. Is it not effectively asking the State to carry the can for property developers going bankrupt, particularly at a time when we have written off billions of euro in this economy, through NAMA and in other ways, for builders and developers who made bad investment choices? Is there any reason other than economic self-interest that the State would do that? Why would the State not, for example, just build social and affordable housing using the money the witnesses want to give to small builders for private housing? Would it not be much better for the common good and for the State if the State were to use such money to build houses itself, rather than giving money to builders to build private houses that will probably never get into the hands of the people who actually need them? There is house-building going on but it is not affordable for those who are in the rental sector or on social housing lists.

It would seem the IPAV exercises very disproportionate political influence. The first page of Mr. Davitt's opening statement mentions three Senators that the IPAV helped to elect, which means that one in 20 Senators is an auctioneer or property valuer, if I am correct. That would seem somewhat disproportionate for a group of 1,000 members in a country of 4.5 million people.

The last issue relates to increasing the mortgage income multiple to 4.5.

This is considered unsustainable and unaffordable by international standards. Rather than reduce house prices, it would increase the level of debt people can acquire.

There may be a misunderstanding regarding urban and rural renewal tax breaks. All tax breaks create a cost for the State. In November 2005, Goodbody Economic Consultants produced a report on the previous round of tax breaks for rural and urban renewal schemes for the Department of Finance, which stated: "By the end of July 2006, when the Schemes are due to expire, it is predicted that the cost to the Exchequer will have risen to €1,933m." The report also noted that the tax incentives had been used primarily by high income earners. In other words, very wealthy people got very rich through the use of these tax breaks. I am not in favour of resorting again to these types of activities because on the previous occasion, the Exchequer suffered dramatic losses and certain people got very wealthy as a result of them.