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

I move amendment No. 71:

In page 13, to delete lines 5 and 6 and substitute "establish a non-commercial semi-state agency.".

I have two amendments in this grouping, Nos. 71 and 74, which I will discuss together. Amendment No. 71 is one of the most fundamental amendments my colleague Deputy Gould and I have tabled. It is to make the case for a land development agency, if such an entity is to exist, that is a non-commercial semi-State body. The original proposition on the LDA, as announced, by Fine Gael in 2018, was to have an off-balance-sheet vehicle because it did not want its borrowings and expenditure to be State borrowings and expenditure. Fine Gael wanted to set it up as a commercial semi-State body using the DAC model. As we know, to secure off-balance-sheet status under EUROSTAT, a majority of a body's activities have to be on the open market. That is why, when the LDA was originally announced, 60% of the homes it was to deliver were to be sold at open market prices, with a social housing proportion of only 10% and an affordable housing proportion of 30%, as members will remember.

One of the significant changes in this Bill is that the proportions of 10% and 30% and the 60% for open market sale are gone. Deputy Darragh O'Brien, as Minister, has repeatedly told us he wants a majority of the homes on LDA land to be social and affordable. He has been quite coy about what the proportion of unaffordable, open market priced homes would be, particularly on sites such as St. Kevin's in Cork and on the Dundrum Central site, but there will be open market sales. The LDA is going to remain on balance sheet for some time, however. If, as we know, 100%, 90% or 60% of the homes in the first round of projects are to be social and affordable, the transactions cannot be off balance sheet. Therefore, all the agency's borrowings and expenditure will be on the general government balance sheet.

There is no reason, therefore, for it to be a commercial semi-State body. One of the great advantages of making it a commercial semi-State body is borrowings. It will be able to get the advantageous State borrowing rates which are much cheaper than private borrowings. That is the case with Irish Water. One of the great values of that entity, for all of its historical problems, is that it is on balance sheet. It also provides for greater transparency and accountability.

To repeat a point I made in the previous meeting, if I want information about what a local authority is spending on land or housing, that information is available to me. It is fully transparent. Once one uses a commercial semi-State body, because of the application of the Companies Act, commercial sensitivity applies. Significant volumes of information about spending and borrowing are redacted and transparency is greatly diminished. That was one of the many problems with the National Asset Management Agency, NAMA, and using public private partnerships being as a mechanism for delivery of social housing. I will not rehearse my arguments on why we should not take that approach. However, I am strongly of the view that if we are to have a State agency, it should be a non-commercial State agency which accesses cheaper government borrowing and provides full transparency on its borrowings and expenditure so the public has full visibility on its activities.