Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I am also under a bit of pressure as I have another engagement at half past. I welcome the witnesses and the presentation was very good. There was a reference to difficult decisions and the value of members from the ESRI coming before us is that they can inform us of the consequences of those decisions.

I welcome the focus the ESRI has put on housing because the housing crisis did not happen by accident. It may not have been intentional as such, but decisions taken by people who occupy these Houses resulted in nearly 3,000 people, including children, in emergency accommodation. There is a lot of focus on what pensioners will get in the budget or what happens to cigarettes and alcohol but the decisions taken in previous years resulted in the current housing crisis.

The ESRI stated that approximately €800 million was being spent per year on social housing. Does it have a view on what the figure needs to be to get to grips with the crisis in social housing?

My second question is on the site levy. I assume this means a vacant site tax as opposed to a land valuation tax or a tax on land zoned for development. Does the ESRI have any views on the rate that would be applied? The tax for derelict sites, which will kick in on 1 January, is 3%.

I understand there is a report on the help-to-buy scheme and there has been commentary in the media suggesting it will be tweaked. There are a lot of vested interests behind the scenes, including at least one Opposition party, who are trying to ensure it remains in one shape or form. Has the ESRI carried out any analysis of the help-to-buy scheme? Has it worked? Has it pushed up house prices? Has it simply resulted in a transfer to individuals? It was to help people reach the Central Bank's macroprudential rules. Has it achieved that?

I had to take a call from someone on whom I was waiting so I did not hear the point about pensions. However, I take it from the other engagement that the article that I think appeared in the Irish Independenttoday, in which it was reported that the ESRI is not calling for an increase in the mandatory retirement age to 70 but that it is recommending that retirement at that age should be optional, accurately reflects the ESRI's position. We welcome that. A colleague of mine - it was not Deputy Jonathan O'Brien - has brought forward legislation in this regard which has passed First Stage, Second Stage and pre-legislative scrutiny and which, it is hoped, will pass through the Houses. The legislation would lift that barrier.

My other two questions concern pensions. There was a bit of a conversation about the amalgamation of the USC and PRSI. Basically, USC, which by 2020 will take in €5 billion, would, if this were to happen, be transferred and go into the Social Insurance Fund. That is fine because the Social Insurance Fund is not in the red anymore but in the black. However, there will be pressures on it in years to come, and this measure would alleviate some of those pressures. On the other end, however, there would be a €5 billion hole in the tax end, which that end cannot take from the Social Insurance Fund to pay for health, social housing and so on. Are the witnesses concerned that one part of our accounts is less sustainable because a very sustainable tax would be taken away to provide for those services? Is the real gap not the fact that we are completely out of kilter with our competitors in that we do not apply an appropriate rate of social insurance on income?

My next question is one I am concerned about. I hope the witnesses listened to one of our colleagues on the committee who said there may be a little backtracking on this, but it has been tabled as a demand, and by a party involved in the confidence and supply agreement, that €240 million be provided in this VAT tax break to developers. The ESRI's study, which is very good and which I know Dr. Lawless and Dr. McQuinn were involved in drafting, came to the conclusion that there is a risk that any tax break would simply lead to a transfer of tax revenue from the State to developers without any significant effect on supply. Are the witnesses standing over that robustly at this stage? Do they believe there is any space for such a tax break, which would amount to a 4.5% reduction in house prices if the developers were not just to push up prices, or do they believe it will just be absorbed and, as they say, be a direct transfer from Revenue into the pockets of developers?

The last question concerns IFAC. Not to start a fight between IFAC and the ESRI, but the ESRI has done-----