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

They will be taken into account, right.

The key point raised by many Deputies is if we stick with the type of capital investment in housing we have had for the past number of years we will not solve the housing crisis. It is not possible. Current social housing construction costs of €180,000 per unit mean that over five years only 13,000 units would be built if we kept and maintained the capital spend on housing. It would not solve anywhere near what would be needed.

It is well documented that the Minister and the officials here today have met the vulture funds on a number of occasions. They now control 5.4% of all mortgages, but they control more of the rental sector because many of them are buy-to-lets with families living in them. Residents in Tyrrelstown in my constituency are finding out at great cost that they are now controlled by European Property Fund, EPF, which is a vulture fund linked to Goldman Sachs. Many of these mortgages were bought from State agencies under the Minister's watch. The IBRC sold 15,000 to Mars Capital, a vulture fund. The State-owned permanent tsb and AIB have also sold mortgages to vulture funds, as have privately-owned foreign banks such as Ulster Bank and Danske Bank. It has been Government policy to allow this to happen and sell family homes from under the feet of families to vulture funds.

The Minister met representatives of these funds eight times in 2013 and 2014 and the Department met them 65 times. What did they speak about? The Minister does not seem to see this as a problem, but these funds will quickly sell many of these properties and, as residents in Tyrrelstown and other places will find out, 90% of NAMA's sales have been to vulture funds. The Minister could have shouted "Stop" at any time but he chose not to do so. Many people have concluded that the red carpet was rolled out by the Government and the Department to these vulture funds. The Minister stated they do not operate under different rules but they get tax breaks. They are exempted from tax on rental income and capital gains tax. This is a different rule.

With regard to real estate investment trusts, REITs, I am surprised to hear the Minister state they have been a success and have professionalised the market. People studying them, such as Dr. Michael Byrne of UCD who has done a report on them, argue they help to push up prices across the board by reducing the amount of land available for social and affordable housing. Rents have increased by 10% to 15% in the first half of last year, where these REITs now control a huge section of the market.

The Minister stated that NAMA has a commercial brief. He can change that brief at any time. Surely as the housing crisis unfolded it was obvious that it was time for a change of policy.

According to NAMA's end of year review 2015 it generated €32 billion but it only spent €206 million on social housing, which is a tiny fraction of what it could have spent. Why can the Minister for Finance - we do not yet know whether Deputy Noonan will continue to be Minister for Finance - not direct NAMA to spend the €3 billion cash-in-hand which it had at its disposable at the end of last year on the construction of 16,000 social housing units rather than on commercial property in the docklands?

In regard to the Minister's reference again today to the NAMA starter homes, where are they? There are two NAMA housing estates in Dublin 15, which is in my constituency. The price of The Eagle, which is a three-bedroom property at Diswellstown Manor, has risen in the past few months from €365,000 to €395,000. In Hamilton Park, which is another NAMA estate in Carpenterstown, the smallest three bedroom house is priced at €410,000. What starter homes is the Minister talking about? NAMA is not providing starter homes. It is building houses for commercial profit, and in areas in which the highest price can be achieved. Unless the Minister or the Government intervenes that is what it will do and only 10% of these houses will come the way of local authorities that are struggling with a housing emergency.

On the relevant contracts tax, RCTs, which is a growing sector in the construction industry, I am concerned that if construction really takes off the growth of this sector will continue. The Construction Industry Federation, CIF, appeared before this committee on Tuesday. According to its representatives 36% of the cost of a house relates to tax to the State. That percentage is based on a highly-inflated wage for a building worker. According to the CIF the average wage of a construction employee is €47,270 per annum, which is not true because construction workers have had their wages reduced dramatically. According to the Central Statistics office, CSO, the average yearly wage for a construction worker is €38,000. The majority of such workers earn much less, many of them far less. As such, the tax dividend from housing is not as high as indicated.

According to the Revenue Commissioners there has been a massive increase in self-employment in the building industry. In my opinion much of this is bogus self employment and forced self employment. Contractors are forcing ordinary building workers into self employment. I have heard from the many building workers to whom I have spoken that this is happening. In November last year, there were 99,741 subcontractors in the building industry. This is a joke. Of course there are not 99,000 plus subcontractors in the building industry here, 23,000 of whom are sole traders and 76,000 are companies and partnerships. Why does this matter? It matters because not only is the State being deprived of vital tax revenues in the construction sector which would allow for the construction of social housing and so on, but workers are being denied pension entitlements and protections in terms of their safety. We are all aware of the battle construction workers had to wage to ensure payment of proper stamps on their behalf to ensure they are properly protected if they have an accident on-site. Why do we now have a situation whereby 37% of all those working in the construction industry are self employed? That is incredible. The Department of Finance does not appear to be interested in doing anything about this. The Construction Workers Alliance estimates that because of this, the State has lost €2.5 billion in taxes since 2008 and workers have been endangered. I would welcome a response from the Minister on those issues.