Mr. Gerard Brady:

I would not rush to bring back in section 23. We saw the effect that could have, in particular if it is poorly designed. Our view is that VAT is probably the best way to reduce costs, in particular if it is targeted at apartment building, in a space where we are seeing apartment building fall. It is a more direct support to a targeted area of the construction sector where delivery is falling at the moment. It means that it would effectively reduce the costs of delivery. There is not enough focus on reducing costs.

We are a very expensive country in which to deliver any type of housing. Part of that is land costs and part is tied up in the lack of zoned land. There are changes at government level to bring in more zoned land, which is very welcome. Part of that is the way we cost infrastructure. We talked about it a bit earlier. The cost of infrastructure, including the cost of local infrastructure for the whole community, is piled on to new houses through development levies and other levies. That is not the case in other countries where it would not be paid through development levies but out of general taxation or a property tax. The other part that makes it expensive is that it is an expensive country generally. We have a challenge there more broadly. I know a cost of business advisory forum under the Department of enterprise is looking at lots of different areas in that regard. The action plan for competitiveness and productivity would help productivity in the construction industry and more broadly. We are very good at some types of delivery. Modern methods of construction have the potential to reduce the cost of delivery and to increase productivity. The best way to achieve that, which was in the programme for Government, is for the State to take a role in building the market and then people would be able to invest into the kind of equipment and training they need because they know there is a pipeline of projects that they will be able to build. It will not happen with the private sector on its own as the only actor using modern methods.