Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

It is €60,000. That is how much average house prices have increased. The comments the Minister made in opposition to it during the budget statements are actually accurate because it is about the issue of supply. Forget about his comments, however. His Department commissioned an independent study in regard to this. The position is clear. The study indicates that the scheme promotes demand for new housing in a market where the problems that exist are unequivocally supply constraints. Concerns in this regard were expressed within the Department of Finance before the introduction of the help-to-buy scheme but no alternative to the scheme or any use of a tax expenditure mechanism for this purpose appears to have been considered. That makes it clear that this is not the proposal that should be pursued. The study also said there were concerns when the scheme was introduced and that it would be difficult to remove a scheme such as this once it becomes part of the operation of the market. It has clearly been the case that the scheme's operational life has been extended a number of times. Now the Minister is extending it again. The study further states that expenditure on the scheme far surpassed the projected values and is rising rapidly. It goes on to say that the scheme is poorly targeted with respect to incomes, locations, house prices and socioeconomic factors. It then states that the scheme has socially regressive impacts. The worst part is that because there is taxpayers' money involved, there is considerable associated deadweight with the expenditure aspect and the scheme is poorly aligned to spatial policy.

What does that mean? On foot of the money that has been provided and that the Government continues to peddle out, how many people has this scheme helped? The Fine Gael spokesperson just mentioned the same thing again. We have to deal with the facts, and the facts are very clear. The deadweight, which means the number of people who are getting this relief who do not need it in order to put together a deposit to purchase the house in the first place is significant. It is increasing year on year. In 2022, it was 53.3%. That means more than half of the people who avail of this do not need it, according to the Mazars report and to the Revenue Commissioners, as we look at the incomes. Yet, the Minister decided to extend the scheme. The independent report that his Department commissioned states that it needs to be phased out, that there should be a signal of intent that it will come to an end in 2024. The issues in terms of first-time buyers are very real but I make the point that the Minister's policies are pushing up prices further. There is no point jingling €30,000 here when half the people do not need it in the first place. However, the impact of it is that it is pushing up house prices for everybody.

The proof is in the pudding. Let us see the proof. It is there to see. House prices increased by €60,000 in the past three years. What does the Parliamentary Budget Office say? The independent Parliamentary Budget Office warned in 2022 that it increases the purchasing power for households while housing supply is constrained and will very likely lead to higher house prices. Such rising house prices are likely in turn to exacerbate affordability problems down the line. It goes on to say that this is more acute in areas particularly where the claims are highest in Dublin and the commuter belt, in Cork and elsewhere. The evidence indicates that the Minister's policy is wrong. The CSO tells us that since he took office, house prices have increased by €60,000 on average. The independent report that his Department commissioned advised this should not be extended, but should be got rid of by 2024, and he comes here and says let us extend it and ignore the fact that more than half of the applications are deemed to be deadweight.

The Mazars report also said:

The sort of policy uncertainty that has arisen with ongoing annual extensions without a clear picture of the longer-term policy environment is undesirable. To avoid this, it is recommended that the announcement of this extension should be accompanied by a clearly communicated acknowledgement that the issue that ... [help to buy] sought to address remains a difficulty and that a more appropriate policy mechanism will be designed to replace ... [it].

Let us deal with the facts here. Does the Minister accept, as Mazars has pointed out, that 53.3% is deadweight, that one third of all applicants had the full deposit, that another third had a portion of the deposit and that they have told the Minister not to extend this? If the Minister is going to extend it to 2025, as is his intention, what will he do after that? What is the policy rationale behind this? The Minister will say it is about increasing supply and all the rest, and that is what Michael Noonan argued when he brought it in. Then it was said it was actually to help affordability because everything we are doing is pushing up house prices, so we need to help people chase these house prices. When will the Government actually stop this? When will they wean people off this? What is the plan behind this? What does the Department have in mind? I know many of the Minister's officials argued against this. Many of his officials are critical of this scheme. Independent, commissioned experts are critical of this scheme. The independent Parliamentary Budgetary Office is critical of this scheme. People who are seeing house prices being pushed up are critical of this scheme. What is the plan? Clear up the uncertainty, because just extending it until after the general election is not good enough.

The Minister has a responsibility to set out the metrics he will use to measure whether this scheme should be extended. Will it be when we are building 40,000 houses? Will it be when house prices reduce? Will it be when house prices continue to increase and the penny drops that we have been doing the wrong thing all this time, that maybe we should actually look at supply instead of throwing more money at the issue, with everybody with an extra €30,000 chasing the same properties and queuing up to try to outbid each other? Please learn the lessons from the past. What are the metrics the Minister is going to use? Coming in here and doing the lazy thing of extending this for another year without any indication and completely ignoring the report and all the evidence we have is just ridiculous. He said they helped 40,000 people, but they actually did not. Some people did get help this year, but the Mazars report said the majority, 53.3%, in 2022 was deadweight and did not need this support. This is hundreds of millions of euro of taxpayers' money which should be going into building social, affordable and cost-rental homes.