Eoin Ó Broin (Dublin Mid West, Sinn Fein) | Oireachtas source

When I break my own rules on acronyms, it always goes wrong. I meant the Ireland Strategic Investment Fund. A 4% annual return is reasonable. From what I can see, the Minister has not provided for 4% annual return. It is 4% in the first year, effectively 8% from base point in the second year and 12% in the third year. So it is a significantly higher level once a landlord passes that third year. This assumes that landlords in Dublin and Cork do as we expect them to do, which is to take the full 4%.

In a market where the landlords and in particular the investors are already getting a healthy return, they are getting a further rate of return well above what other investors in other areas of activity would get. I do not understand the logic for that and I ask the Minister to explain it to me.

In addition a significant portion of renters simply cannot afford more rent. While on paper 4% sounds better than 8%, or 12% over three years is better than the 26% over two years that Davy estimated, if the Minister is going to facilitate that additional cost, it has a big financial implication for families. For example, a family renting the average family home in Dublin at €1,500, would have to pay an extra €4,500 over the three years.

In arguing against using the consumer price index, the Minister said that part of the problem is that it would not allow any rent increases. That is precisely the point. These families cannot take any extra rent increase. At a time when the market is already providing healthy yields, I do not understand. In the Second Stage debate I heard the general argument. However, based on the detail of what the Minister announced today, I do not accept the logic of it. I do not see evidence that a more constraining approach to rent inflation would have any negative impact on either existing levels of stock in the rental sector or future levels of investment.

I am also very concerned that by starting with Dublin city and county, and Cork, significant portions of the State are left out. I know the Minister has a mechanism in there, but for those other geographical areas to qualify for the scheme, their rents will have to increase to the rates in Dublin and Cork, which means that those people will have to suffer the more dramatic rent increases that people in Dublin and Cork have experienced in recent years and then be hit with a further 12% in three years.

I am expressing frustration. I know it is Fine Gael and that party does not like intervention in the market. If Deputy Noonan were not Minister for Finance, I am sure the Minister, Deputy Coveney, could get a better deal than the one he got.

However, based on the Minister's figures, this is a really bad deal for struggling renters and a really good deal for institutional investors. I will, therefore, press the amendment, although I do not want to get into the detail because we have already had that discussion. If the consumer price index is not the right index, that is fine, but this is not the right mechanism either. It will not provide the relief for struggling renting families or individuals that the Minister claimed today at the press conference.