Joan Burton (Dublin West, Labour) | Oireachtas source

Does the Minister's Department have any regard to the reports that are received from the Parliamentary Budget Office? It did a detailed analysis pointing out that the scheme is a subsidy to producers. Unless subsidies to producers are very carefully tailored or are happening, as when this was introduced, when a market is dead, they produce what subsidies to producers produce, that is, they line the pockets of the producers. In this case, they are providing an assistance to the building industry, which admittedly has many different problems, that is not required. They are effectively helping to drive up prices. In my constituency and that of the Minister, whether it is a new or a second-hand house, the traditional house that civil servants and so on looked forward to being able to buy, many of those properties have increased in price from €400,000 to €500,000. The analysis sent by the Parliamentary Budget Office shows clearly that a significant proportion of the people are so well off they can get the 85% loan values we just heard about. All the evidence is that they may be delighted to receive the subsidy but that they do not particularly need to receive it.

The Minister talked about €100 million being spent on this scheme. Is he even open to trying to target it, perhaps to people who are struggling to get on the ladder of home ownership and offer them some help, or is it his intention simply to help drive up house prices, which is what it is doing? I cannot understand the advice the Minister is receiving from officials and why we are receiving very clear advice from the Parliamentary Budget Office that was a new element. I understood he was possibly being advised to pay some attention to the detailed reports. Nobody from his Department contested the reports that we received, debated and examined yet the Minister seems to be of the view that he should simply ignore the distortions that the scheme as it is now, where he is proposing to simply renew it, has produced in terms of outcomes.

This is a producer's subsidy and, as such, the producer's subsidy is helping developers. I use the word "developers" because the financially driven model of house building the Minister is overseeing is producing results where, for instance, funds are now producing people who can attract money from investors. They are producing these monstrous proposals of strategic housing infrastructure that has 218 beds with a kitchen being shared on one of each of the six floors. We can talk about this all day. There are major problems around smaller builders being able to become active in the market while, at the same time, a wall of money is being thrown by investors into fund-type vehicles.

Hence, there is a phenomenon of various large companies, which have so much money that they do not know what to build, deciding to build bedrooms that they rent out forever. We are moving further away from a democratic model where home ownership is significant and important to everybody in the country. We want to retain that model, but the Government is changing it to a highly financialised model, which is driving up house prices and assisting a certain kind of developer. In 20 years, people who once aspired to own their own homes, having worked hard, will not be able to do so. They will retire in their 60s without a home on which the mortgage is paid. They are likely to be lifetime renters. The Minister has said that the Government is spending €100 million on subsidies in the housing market. Can that money not be used to target the people who need support, rather than those who, based on the evidence in the PBO report, could qualify for a significant loan? I am sure the Minister knows from his own commercial background that all of this is driving up prices, shutting more and more people out of the housing market and putting them into permanent and expensive rentals for life. They will not have an asset or security of tenure, and when they reach retirement, they will have to fall back on the willingness of the State to secure affordable rentals. They will not have access to a home they can ever own, but only affordable renting. This particular scheme was initiated by the former Minister, Deputy Noonan, at a certain point in time. I disagreed with it then, but it was a time the market was totally flat and developers did not have money jingling in their pockets. Now certain developers are so rich and attract so much investment that they can dictate terms to the Minister for Housing, Planning and Local Government and Fine Gael. This is the kind of stuff we once associated with Fianna Fáil, but with the way everything is going, it now seems Fine Gael has become the downtown office of the CIF.