Richard O'Donoghue (Limerick County, Independent Ireland Party) | Oireachtas source

As we have time left, we can open it up to another round for the members who are here for follow-up questions. I have a question for the witnesses myself to do with revenue that is VAT implicated. In terms of the increased revenue that is in this country at the moment and with a view to allowing people get on the housing ladder, I have done up a couple figures. Based on a 2,000 sq. ft house, the cost five years ago was about €120 per square foot, which means the cost of the house was €240,000 plus VAT. The VAT was €32,400. Today, the same house costs €400,000 but there is a VAT implication of €54,000. That is nearly a 70% or 80% increase in VAT on the same house. It has the same finishes and is the same house. On top of that, there is a fit-out for any house. This would cost roughly €40,000. There is a 23% markup on that, which is another €9,200. For a house today - we are talking about relief on mortgages - the tax coming back to the Government through Revenue is much more, outside of what the person has earned himself or herself to qualify for the same mortgage.

Combined, the person would be paying on average €30,0000 per annum in income tax to qualify for this mortgage. The Revenue intake for a person trying to get on the housing ladder today for a house of 2,000 sq. ft means that €100,000 of their mortgage is going to Revenue. On top of that, there is the planning permission fee, which is an average of €5,000 per household, plus the buyer is paying for connections to Uisce Éireann services, which is another €2,500. If you work out the taxes on a new house it comes to a minimum of 20% of the new build. We want people to build in this country. Outside of that there are all the other add-ons such as motor tax and insurance, and all the taxes that a person has to pay, at an inflationary cost. These are from the clothes on your back to a hotel stay if you wanted to go away for a weekend, there is monetary tax on that. There is inflation on the cost of food. There are also the increases on employers who employ people. It will come to a stage where something has to give.

Consider the projections for delivering houses. At the moment it is supply and demand but the demand outweighs the supply. This means it is driving inflationary costs. To help people get on the ladder we have to find a way. I understand that a certain piece has been put in to try to control the mortgages but we need to control the amount of tax people are paying on their mortgages. They are borrowing over the next 30 and 40 years for mortgages knowing that 20% or 25% of their mortgage is tax. These are people who might be providing their own homes. They are not being provided with homes by the local authorities. These are people who are working and are paying all these taxes and they are now also providing for the people who cannot work. They do not have an issue with doing that but if we are to encourage the next generation to have a house and to be able to survive we have to come up with something else. It is fine that we have this extra money at the end of the year but there is only so much a person can take before they say "Enough is enough and we cannot survive".

We heard today that parents are skipping one in every four meals to provide for their children. We can look at how many houses we are going to build but we also need to look at how we put money back into people's pockets so they can survive and their money goes further. Having three wage increases within 12 months or 18 months only drives inflation further. The person getting the wage increase is getting nothing extra. It is just more tax revenue because the bands have changed and that pay rise is going back in tax, so people are getting nothing extra. They are earning more but getting less. How do we counteract that? At the end of the day the Exchequer coffers are up with surplus moneys but the people in this country will only be able to take so much before it could drive us into a recession if the Government keeps going the way it is going.