Cian O'Callaghan (Dublin Bay North, Social Democrats)

On what the Minister said about this measure increasing profitability, it is reasonable to ask what level of profitability is needed because we have gross profitability in the sector from the two main publicly-listed companies of more than 21%. How much higher does profitability need to go to make the activity viable? That is a very high profit level. Why does the Minister think we need profitability levels in the sector that are above that again?

There is a key issue I have been raising here and I was very happy to hear the contribution from Deputy Burke, which shows there are examples in the private sector of being able to innovate and improve productivity. My point is not about individual actors in the sector, some of whom are doing what needs to be done, but about the sector as a whole. There is an issue with this. In the past number of years we have had profits increasing but according to analysis from the Central Bank investment in capital stock, meaning machinery, equipment and technology, has been declining every year for the last decade. Profits are going up and investment in the capital stock we need to make the sector more productive, make housing more affordable and allow delivery of more housing is declining by 2.5% every single year in the private sector. At the same time, our productivity levels are the second-lowest in Europe among comparable countries. We are going in the wrong direction on this.

I recognise the different Government initiatives on this, which are all welcome, but it is not having the desired effect on productivity in the construction sector. We are going in the wrong direction in terms of technology, machinery and equipment. That is all happening while subsidies for the private sector have been increasing, tax expenditures have been increasing and the firms’ profit levels have been increasing, so there is something fundamentally wrong with the approach the Government is taking here when we are not getting the desired outcomes.

If we look at what is happening with land prices over the same period, and we bear in mind there have been a number of government subsidies and initiatives since 2018, we had figures from the CSO yesterday showing the price of residential zoned land has increased by 42% since that year.

If we want to make the delivery of housing, including apartments, more viable and if we want to make housing more affordable and accessible for people, we should be trying to get the cost of development land down. Rather than taking measures that lead to increases in that cost and in profits for developers, we should invest in measures that would make housing more affordable, viable and productive. Such investment is declining and that is a fundamental problem that needs to be addressed.