Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

The Deputy is well placed to make claims regarding the effect of lobbying that he knows worked in the run up to the crash in this country. The same types of calls were made prior to this budget and I said "No". The members accusing me of having some kind of agenda to up the margin and profitability of developers at the expense of trying to help people buy a home are either not aware of or are choosing not to bring up the fact that when I was confronted with demands for the kind of policy choice that could realise that kind of agenda, I said I was not going to do it. I did that because I will not bring in measures that artificially increase the profitability of some parts of our economy at the expense of genuine measures that can increase supply. Colleagues who have centred their claims regarding what I am or am not doing on the anchor that I have some kind of agenda of trying to support parts of the construction sector at the expense of increasing supply should look at the decision I made in that instance when I said I would not do it. The reason for that was because I had no guarantee or credible assurance that it was going to increase supply, nor had I any ability to withdraw the measure if it were to be put in place and to then deal with all the difficulties that would cause, as Deputy Burton touched on a moment ago. I knew there was a risk that if I put such a measure in place there would be no certainty of an increase in supply and no way of telling what could happen at some point in the future at huge cost to the taxpayer. Deputies Doherty and Murphy have made all kinds of assertions about my rationale behind this measure and what I am doing but they should go back to what I decided not to do in the face of the kind of claims and arguments that won at other points in our past when this type of issue was being dealt with.

I wish to address the report, what I am doing and the policy choice I have made, which is to maintain it. I will deal with Deputy McGrath's question regarding how I will evaluate it in a moment. The scheme is, as all members know, capped at or below just under €500,000. According to the figures published in the report I made available as part of the budget documentation, 53% of claims or draw down under the scheme are for properties priced at or below €300,000. A little more than 82% of claims are for properties valued at below €375,000. The draw down under the scheme is going towards properties we are trying to change the pricing of in order to make them more affordable for our citizens. The figures I have shared with Deputies show that, for example, 36% of claims were for properties costing between €226,000 and €300,000. That shows the scheme in its short history has been concentrated on the kind of pricing levels I want to influence and it could have the possibility to continue that in the future.

What is the central reason I have decided to maintain this scheme for another year? I refer members to the words of the former Minister for Finance, Deputy Noonan, when he said that he wanted to have a scheme in place to try to increase supply. Given the nature of the market I am engaging with, all members know it would take longer than 12 months or, indeed, the eight to nine months the scheme has been in operation to know if a measure to increase the supply of a particular asset, in this case housing, with all the difficulties and requirements involved in the planning process, tendering and so on, is going to have a supply side effect. It will take longer than that. However, those are the price ranges against which claims have been made during the operation of the scheme. As regards the assertion that the scheme has caused the kind of price inflation we are currently experiencing, 4,487 people, families or couples have accessed the scheme to date. That is not enough for anybody to make the claim that the scheme is shifting the needle in terms of pricing levels. What is more likely, as, in fairness, some members have acknowledged, is that the shortage in the supply of housing is affecting the pricing levels that I want to be moderated and move into line with people's ability to afford to buy a home. Deputy Burton asked a question on that issue.

Deputy Doherty made the point that I am complicit in trying to normalise issues he believes are unacceptable. As I have said, I want to tackle and make progress in dealing with homelessness to a greater level than we are at the moment, and deal with social issues that are unacceptable. I hope that one of these days when the Deputy is accusing me of normalising things that I also want to change, he might acknowledge the good things that are happening in the economy in terms of job growth, changes in living standards for some people and improved investment in public services and that I have played a role in those changes. He is entitled to the view that there are issues with which I am not dealing correctly and I would never differ with his right to hold that opinion. However, if he believes there are policy choices I am making that are contributing to difficulties, as he does, I hope he would at least have the ability to acknowledge that it is likely there are other policy choices I am making that are contributing to improvements in our economy and society. There is a strong case for that but I acknowledge Deputy Doherty is not willing to concede that point. He has accused me of being complicit with developers and in their back pocket. I have pointed to a decision I refused to make as comprehensive evidence that I am not. Just because I have a different view to the Deputy on a matter does not mean it is bluff and bluster. I do not accuse him of that. I have laid out my argument and the facts available to me to back up my case.

Deputy Murphy made reference to a CIF report and the lobbying therein. He might also acknowledge that I did not implement the main measure the CIF and others were looking for in the budget. I have pointed to the effect of the scheme on particular price levels. If this is a supply side measure it is going to take longer than six to nine months to evaluate whether it is having a supply side response. That is the basis upon which I will evaluate the scheme in the run up to budget 2019.

Deputy Boyd Barrett holds the view, and it is a legitimate and consistent one, that the State should be building nearly all the houses our citizens need. His view is that the private sector is not capable of doing that at pricing levels he believes are affordable for the citizens we represent. I take a different view. I believe the State should play a significant role in respect of the supply and regulation of houses, which is why a policy shift to local authorities building homes as opposed to acquiring them is the right policy decision to make.

I also believe many of our citizens want to own the assets they are going to buy. The private sector does have a role to play in regard to the supply of homes and the State and its institutions have a role to play in regulating that market and in ensuring it is not developed at the expense of the common good.

Deputy Michael McGrath asked how I propose to deal with this issue in the run up to the next budget. By the time I get to the next budget I will have more evidence to help me understand whether this scheme is leading to a supply side response. This will be one of the key factors in regard to the retention of the scheme. I refer the Deputies to table 71 of the Indecon report, which shows that 22% of the people surveyed in the context of this report, when asked whether this scheme was likely to incentivise more units over the next three years, responded No. The remaining 78% responded Yes. It is, therefore, reasonable for me to wait to see if a supply side response is forthcoming in advance of budget 2019.

Deputy Burton asked for my views on housing ownership. I want to have a housing market in which more of our citizens than is currently the case are able to afford to buy homes, where home ownership is a realisable objective for the majority of our citizens and where those who wish to rent, as is the case in other European markets, are able to rent in a more stable and diverse rental sector than is currently the case. For those citizens who are not able to do either, the Government, through the local authorities, should be building homes. We have increased the resources available to local authorities to enable them to do that. The Deputy made an interesting point regarding whether local authorities are accessing that funding, which is a matter I am tracking. My experience in the past has been that they have not not been doing so. However, as indicated as recently as this week this year the local authorities will be drawing down the funding available to them in a way that we have not seen heretofore.