Mr. Tom Parlon:

In response to Senator Humphreys, who raised the issue of the legacy of poor-quality work that is a difficulty for the industry and is still being dealt with, thankfully much has been done and the industry has moved on. The new Building Control (Amendment) Regulations, BCAR, have been in place since 2014 and set a very strict statutory certification whereby every build, be it a single house, extension or any other scale of construction, must have an assigned certifier with insurance cover who must be a chartered surveyor, chartered engineer or an architect and must sign off on all aspects of the build. We have moved on, as we clearly needed to do, and we are in a good place. The industry, together with the Department of Housing, Planning and Local Government, has set up the construction industry register of Ireland, CIRI. That means that in order to be a construction professional or involved in any element of the sector one must be registered and tick all the boxes with regard to one's experience, quality, insurance, tax compliance and so on, which will take the cowboys out of the industry, who, unfortunately, were among those involved in such poor-quality work, which was also due to the lack of implementation and scrutiny of the regulations at the time.

As regards the 9% rate, I understand exactly where finance comes from. It annoys me that the calculation is done and it is said that if 4.5% VAT is taken from the industry whatever number of hundred million euro will have to be found. However, that does not take into account that construction, in particular residential building, is a massive economic boost for the Exchequer. Almost 40% of the cost of a house goes directly to the Exchequer and the extra cost, therefore, would be less than is represented. As regards it being a temporary measure, I appreciate that has been a problem. In fairness to my colleagues from the Restaurants Association of Ireland, they are holding on very strongly to the 9% rate. It has been said on many occasions that a particular year would be the last year for the 9% rate but woe betide the Minister who follows through on that. He or she would need to be fairly well galvanised or would not want to be going out for a meal around the country for a while. That is a problem but we need to be innovative about how it will be done. The issue about targeting is a difficulty because the EU lays down the rules and one either does or does not do it. The Government is quite entitled to target the construction side for a 9% rate as it would qualify in the same manner as the hospitality sector. However, we have to be innovative and find a way that we can do it temporarily or otherwise. If there was a window of opportunity of two years, for example, we would make a major dent in the housing deficit.

As regards the point made by Deputy Neville on seeking finance from the private sector, the banks are senior debt and our bigger players are able to get into joint ventures. Many houses are currently being turned out with the support of NAMA and others have many of the big international funds behind them but smaller players do not have that capacity. As I stated, the bulk of our members around the country who are employing fewer than ten people do not have the capacity to link up with a big player and that is where the €750 million the Government has now set aside or is about to set up will play into their hands. The difficulty is that the banks which provide the 60% maximum have the deeds and the security on the project and the next player coming in does not have that comfort and, therefore, feels obliged to take a far higher cut in terms of an interest rate and so on and that is a difficulty. The €750 million house building finance envisages lending up to 80%. There has been some speculation about interest rates in that regard but the Taoiseach said he expects it to be approximately 4%, which would be affordable for the industry and would give it a good boost.