Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

I add my support to this amendment. The Minister said in his initial contribution that the judgment on the help-to-buy scheme would be the extent to which it did or did not contribute to a rise in house prices. The Central Statistics Office, CSO, brought out a report today which stated house prices have gone up by 12.8% in the past year. In Dublin, in the past three months, the average house price has gone up by €17,000. Clearly, any value that the Minister might even ascribe to this measure from the point of view of the home buyer is being wiped out by the spectacular rises in house prices. The only beneficiaries of this scheme are developers and builders.

In the early phases of the debate about the housing crisis, the cry of developers as to why they could not deliver the supply everybody said we needed was because it was not profitable for them. There was no doubt they wanted a dramatic rise in house prices and the Government obliged. The Government is contributing enormous sums of money through this scheme as well as through the local infrastructure housing activation fund, LIHAF, and House Building Finance Ireland, HBFI, to subsidise those who are hoarding land, manipulating prices and lobbying the Government to boost their bottom line and ensure they can make a lot of money out of the housing crisis. The Government is being dragged by the nose by these people.

There is an opportunity cost to this. Every cent the Government gives to them is money that does not go into building public housing. It is not just a debate about whether it is effective, although clearly in its own terms it is contributing to or failing to stop the spectacular rise in house prices. The other side of the coin is it is money that could be going into public housing. However, the Government continues, or in the case of HBFI and LIHAF, expand corporate welfare to the very people, the builders and developers, who landed us in this mess in the first place and who, even in the teeth of this extraordinary crisis, are still manipulating it to their own advantage. It is extraordinary.

I heard an interesting contribution at the Right2Change conference last weekend from the head of the plasterers' union about the cost of housing. Much of what we hear about the cost of building housing is actually the propaganda coming from the builders and developers. He helpfully pointed out that when one breaks down the cost of building a house, it is between soft costs and hard costs. The hard cost of building a house comes in under €200,000. To physically build a house one needs bricklayers, labourers, electricians, carpenters and the other associated trades. The other costs are the profit-taking of the developers, the estate agents, the architects, the surveyors and so on. As he simply pointed out, those costs would not exist if the local authorities were building houses because they already employ all of these people. Half of the cost of building a house goes to people in the private sector, whereas if they were built by local authorities we would only have the hard costs with most of the soft costs covered by existing local authority architects, surveyors and so forth. Accordingly, much of the profit-taking would not be necessary at all.

That is the opportunity cost of the Government's approach and its ideologically dogmatic approach of believing the market will solve it when clearly the market is the problem. Worse, the market is manipulating the situation, and yet the Government continues to feed the monster. It is inexplicable.