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

When we are debating the role of REITs and IREFs, it is important to embed the debate within the overall Government policy with regard to housing, which is one of investment and planning for all forms of housing. As for where we are at the moment, we have invested €4 billion in the Housing for All plan for next year. That €4 billion fund and investment will be used to build a wide variety of homes, from social homes and affordable and cost-rental homes to private rental and private ownership homes. We want to build a variety of homes this year, next year and in the years to come. Of course I acknowledge we need to do far better than we have done in recent years. In the first six months of 2021, 2,433 new social homes were directly built by the State. A total of 3,600 new social homes were delivered. That is relevant to the discussion we are having because in this context it is sometimes portrayed that the only provider in scale of homes within our State are the REITs and IREFs. It is portrayed by some that the Government does not play an active role in the building of new homes, but it does. They are the figures for where we are this year. More than 3,600 new social homes have been built, with 8,750 social homes now on site, being built as we speak.

The question then becomes how we can deliver our goals of more homes being built that are available for private rental accommodation or that could be purchased without the State playing an active role. As a country, do we want savings held in other countries to play a role in the delivery of homes by the private sector in Ireland, underneath the terminology of REITs, IREFs and all the other technical language? Do we want the savings that exist in other parts of Europe and the world to be used to build homes in Ireland while the State builds more and more homes directly? I believe the answer to that question is "Yes".

Look at the size of our country. Two banks will be available to provide most of the credit we will need to build up to 20,000 homes per year through the private sector. Ours is a small open economy on the edge of Europe. To those who say they do not want savings that are held elsewhere to play a role in the private sector delivering either more apartments, primarily for rental, which I accept, or homes for purchase in a small number of cases, the question is: if they do not want the savings that are held elsewhere to do it, who they want to do it? Currently, the answer always appears to be that they want the Government to do all that, to build more and fund more.

Already in 2020, however, the Government is building 13,100 of the 20,600 homes we believe will be delivered next year, either directly or, if not fully building them, it is enabling their delivery through, for example, cost-rental homes or the new affordable housing scheme the Minister for Housing, Local Government and Heritage is delivering. For next year, the Government will be either directly building or co-funding and enabling the delivery of half of all new homes. If we want the Government to do more than that, the question is whether it is sustainable that, year after year, the Government would build or fund the delivery of more than half of new homes. I think we will get to the point where there are limits to what the Government can do. The question then is whether private savings can play a role, particularly in the delivery of more apartments.

We are getting to the point where, despite the country clearly having an intense housing challenge, most elements of the Opposition are against any moves to increase the supply of homes. That is where I think we are. It is certainly the case that at least some of the Opposition do not want REITs or IREFs to be present in Ireland at all. If that is the case, the responsibility sits with them to explain how, in particular, the apartments these entities play a role in funding will be built. How else will that happen?

The charge that these entities do not pay tax is wrong. According to the latest set of information available to me, up to 30 September 2021, REITs paid dividend-withholding tax of €15 million, while IREFs, which have been the subject of a fair bit of debate within this committee, went from paying €8.3 million in tax in 2017 to €71.9 million in 2020.

These financial instruments play a role in delivering some new supply within our country. The Government is playing a larger role; the largest purchaser of new housing stock is the State. As these organisations have become more active, although they are still far less active than many would acknowledge, they have played a role in boosting the supply of apartments. Given the dire shortage of rental accommodation, surely there is a case for saying we are willing to allow money other people save to play a role in allowing Irish housing needs to be met.

This is at a time when we, as a State, are spending more than we ever have previously on building homes either directly or indirectly.