Fergus O'Dowd (Louth, Fine Gael)

I move:

That Dáil Éireann:

noting,

—the average house price in Ireland now stands at €255,776, an increase of €18,000 in one year;

—the price of an average house has increased from an average of €75,000 in 1996;

—42,500 people aged over 30 now live with their parents according to Census 2002;

—only 315 affordable housing units have been acquired under Part V of the Development Act 2000;

—over 100,000 individuals are on local authority housing waiting lists;

—there are 5,581 homeless people in Ireland living in 3,773 households; and

—the significant policy change that occurred with the transfer of responsibility of the housing needs of those on the rent supplement from health authorities to local authorities;

bearing in mind the response of the Government to this escalating crisis has been the:

—abolition of first-time buyer's grant;

—increasing of VAT rates on houses;

—imposition of development levies;

noting that moves in the recent budget on stamp duty have not been enough to move first-time buyers out of the stamp duty net, calls on the Government to:

—implement a package of proposals to help first-time buyers including an SSIA-type deposit savings scheme;

—arrange for a Dáil debate on changes to the rent supplement;

—meet its NDP targets and election promises on social and affordable housing; and

—convene a crisis meeting of the social partners to address the issue; and

condemns the Government for its failure to provide young people with decent, affordable housing.

From the perspective of society, in particular our young people, there is nothing more important than a house of one's own. Since the foundation of the State a house of their own has been an achievable objective for each generation of young people. This was something to which they could always aspire, whether it was local authority housing, now called social housing, whether with assistance from their family they could build their own home on a family site, or whether they could enter the housing market and buy a house with a mortgage raised on their income, normally 2.5 times the combined income of the couple. A house of one's own was a reasonable and achievable aspiration. As Ireland grew in confidence and ability and as our education system improved there was a significant improvement in living standards. Young people and young families were at the heart of our society.

In the past five to seven years this has changed. Between 1998 and 2003, the cost of a house rose by an amazing 81%. People who have a home that has risen in value by 81% in five years think this is great and this is an investment for their future and their family. However, the reality is that for young people the ideal of purchasing one's own home and starting a family is no longer achievable. This puts pressure on the system and drives people out of the housing market into rented accommodation. It drives them onto local authority housing lists when they would prefer to build their own home. In particular, it demonstrates the inability of this Government to value young people.

When the late Pope John Paul II came to Ireland he said: "Young people of Ireland, I love you." He concentrated people's minds on young people and their future. As politicians we hold the fort for the next generation. We prepare the ground for future families and give our young people a chance to move on in life, to form their families and purchase their homes, or we ensure that the local authority assists them in that purpose or supplies homes for them. This resolution is about the failure of this Government to value and honour or to give the commitment, care, concern and dedication that young people need to achieve their dreams.

Until now we have had the highest percentage of home ownership across Europe. We are the world leaders in giving security to our families and young people. However, this generation of Fianna Fáil politicians is not helping. The problem with this Government is that it has been in power too long and no longer cares that the goal of achievement of all families and young people is no longer possible.

I have spoken to many young people who want to buy their own home but who cannot afford to do so because, while their income can sustain the mortgage, they cannot provide the large deposit. Many of them borrow from their parents and try to pay them back or they borrow from the credit union and put it down as a car loan. They cannot be transparent with the building society about where they are getting the money because if they are they will not get their mortgage or with the credit union or they will not get their loan. They are in a serious bind, a result of the policies of this Government.

Reports in the newspapers that the rate of increase in house prices is slowing down sound good. The Government should not take comfort from the statistics released earlier by the ESRI, which highlight a slow-down in the rate of house price growth. The institute shows house prices increased by 7.5% compared with average inflation of 2.1% and an increase in average industrial earnings of 5% in 2004. Notwithstanding the moderation in house prices, young people are not better off as they still cannot afford to bridge the gap between their savings and income and the deposit needed to buy a house. The Government's amendment is proof enough of that as it concentrates solely on money spent rather than outcomes delivered.

Everything is not all right. Ireland continues to endure a housing crisis. I welcome last week's initiative by the Minister for the Environment, Heritage and Local Government to assist people in rural Ireland in building their own homes and I will not pour cold water on his plans in that regard. However, the SACs are an issue of contention in the proposed regulations. It is all very well for those of us residing on the east coast to say SACs should not be built on and they are sacrosanct because there are fewer such areas in the region. However, significant tracts of land — square miles rather than square metres — in other parts of the country are designated SACs. The bottom line for Fine Gael is that young people living near SACs should have the capacity to build on their own lands, particularly when they have no other choice.

The greatest problem facing young people is the complete and utter failure of the Government to get to grips with the housing crisis. Its laissez-faire approach to rocketing house prices has made Opposition Members sick as we witness the knock-on effects of its right wing policies. The average price of a new house is €256,000. Many people cannot afford to buy their own homes and the number aged over 30 who still live with their families has increased significantly over recent years. That is indicative of the lack of Government interest in them. More than 50,000 families are on local authority waiting lists. A national assessment is being conducted by local authorities of these lists. Between 1998 and 2003 the number of people waiting for social housing increased by 60%. In 2003, 18,000 more families were on the list than in 1998. I contacted officials in a number of local authorities earlier this week and they expect a significant increase when the updated figures are published later this year.

Government policy on social housing has been a serious and abject failure. I am fed up, as are my colleagues, with our clinics full of people who seek social housing but who have no hope of being approved. While I welcome the changes made to the rent supplement scheme, which provide for pilot areas in Drogheda and a number of cities where local authorities will be proactive in providing rented accommodation at a reasonable price for young families, one must be in receipt of supplementary rent allowance for 18 months to avail of the scheme. The poorest people who would take rented accommodation if they could get it, therefore, cannot even be considered because they must be in receipt of the allowance for 18 months before they can get into the game. That is not good enough.

The scheme has a number of positive provisions, which I have measured against certain indices. It is socially just and could make a positive contribution, but the poorest in our society cannot avail of it. That is where the Government's policy has been an absolute failure. If the Minister of State does not believe that, he should visit my clinic or those of other Opposition Members. Almost 6,000 people are homeless or living in bed and breakfast establishments throughout the State. While the changes to the rent supplement scheme will facilitate people to move out of bed and breakfast accommodation, and the policy thrust in this regard is positive, not enough is being done for the homeless.

Manifesto promises of more houses and a reduction in waiting lists are a distant memory. This disaster has been met by a Government response, which included the abolition of the first-time buyer's grant, an increase in VAT on housing, development levies and so many taxes and charges that much of the price paid for a new house goes directly to the Government. The statistics provided by the Construction Industry Federation are staggering. The federation estimates the tax take from a house worth €300,000 in Dublin comprises VAT of €35,000, site tax of €30,000, labour taxes of €29,000 and profit taxes of €11,000. The Government is taking €110,000 out of a house buyer's pocket, which is appalling, particularly where first-time buyers are concerned.

Fine Gael is convinced its three-point plan will help young people save for a deposit, buy a house and repay a mortgage. First, we will introduce a house deposit savings scheme, similar to the SSIA scheme, to help young people saving for a deposit for a new home. This is the key to enabling them to bridge the gap between their savings and the deposit they need to buy a house. The SSIA scheme, which is popular and important, will reach fruition in the next two years. Why will the Government not introduce a similar scheme dedicated to first-time buyers? It would be socially just and would help them to achieve the dream of their lives to buy their homes.

We should cherish our young people, especially those who wish to purchase their own homes. Now is the time to do so. Fine Gael has costed a savings scheme to which it is committed. Under the scheme, first-time buyers would receive €1 for every €3 they save provided those savings are used for a deposit on a house. No tax on interest would apply. The recipient must demonstrate regular monthly savings for a minimum of two years and the scheme would operate for both new and second-hand houses. This is a serious initiative which must be implemented now because we should no longer keep these people waiting. Young people need to be offered hope that they can realise the dream of their lives. There is nothing more important than concentrating on this issue. Fine Gael is determined that this will happen.

Fine Gael will abolish stamp duty on second-hand homes valued at up to €400,000 bought by first-time buyers. The move in the last budget was welcome — it was Fine Gael policy — but it is an inescapable fact that it did not lift first-time buyers in Dublin out of the stamp duty net. Fine Gael also proposes to front-load mortgage interest relief for first-time buyers on the first seven years of the life of a mortgage, thereby giving them the help they need when they need it most. Those measures would cost approximately €50 million in the first year, and we are prepared to commit that money. It must be done, since it will make all the difference to society.

That is the core. One could waffle here all night and talk here, there and everywhere, but unless one puts money into the pockets of young people who want to buy their own home, one is not taking them seriously or giving them the honour and respect that we as a society want to accord them in order to encourage them.

There is nothing more important to say about Ireland than that we have had the Celtic tiger. Now we are moving into the second phase. Many people from different countries wish to come into this economy, learn about it and be part of it. We have never been so wealthy or had so much money. Our coffers have never been so full. People in this country have a wonderful opportunity regarding education, since we have the most educated young work force. However, we are really letting our young people down in a big way if we squander society's wealth. Who is making off with it? It is the big builder, the profiteer and the developer when the young people should be enjoying the benefits of this building boom.

More legislation is needed, and there are issues regarding the Kenny report of some years ago on building land. The All-Party Committee on the Constitution is examining the cost of building land and whether we require reform. There are many arguments and debates but only one fact: that we are not doing enough. The Government has been shameful in its neglect of young people. When the Minister knocks on the doors in a year or so, he will find that out. We are absolutely committed to our point of view and policy.

See this speech in context