Fergus O'Dowd (Louth, Fine Gael)

I will have a word with them everywhere because this is an issue for us all. I have no difficulty doing so. I had a word with them in County Louth and everywhere else.

There is no point building houses where there are no facilities, nor is there any point in councillors rezoning land if there are no facilities for the houses to be built thereon. There is no point in the Government having a national spatial strategy that lacks direction. This is the reality. I face this problem throughout the country. We in Fine Gael make it crystal clear that there is a need for a proper policy. The Government must lead by example — that is what Fine Gael will do.

The reality is that the Minister's record in Government has been an appalling failure. In 1996, the average price of a house stood at the equivalent of €88,000 in Dublin and €75,000 elsewhere. Today the average price for a house is over €250,000 and the average in Dublin is €356,220. Where in the name of God are people getting the money? Those people who can afford to borrow are borrowing to the hilt. Recently, financial institutions have been saying they will grant clients loans to buy houses, amounting to €350,000, for example, on which the clients have only to pay the interest. People in partnerships are in extremis trying to get the money to build their family homes. The reality is that the market keeps meeting the demand but the prices keep increasing.

People are now obtaining mortgages they will never be able to pay back. They are borrowing in a climate in which interest rates are about to increase. One might believe an increase of 1% is not very much, but one should remember it is not so long ago since mortgage interest rates were 15% or 16%. The Minister and I remember this. The reality is that there are unacceptable developments in the economy. The Minister's policy is not working and the pricing of houses has gone out of control.

Let us consider the figures, two of which are good. It is excellent that 250,000 are working in the construction industry. I welcome this, but if one ascertains who is buying the homes being constructed, one will note that a very significant number of buyers are buying second homes. Those who want to buy their first home cannot enter the market. We now have, for the first time, a generation of young people on normal incomes, such as teachers, nurses and gardaí, who cannot afford to buy their own homes. The Minister has not addressed that and is not addressing it through the policy he has outlined today.

Fine Gael has identified key ideas that ought to be acted upon, particularly in respect of first-time buyers. Government policy should address their needs. All stamp duty payable by first-time buyers on properties valued at less than €400,000 should be abolished. The Government moved some of the way towards achieving this in the budget of last year, but the stamp duty exemptions have not kept pace with the increase in house prices. While there has been a reduction in the stamp duty payable, it is still significant. The Estimates are to be published next week and if the Minister has done his homework — he generally does it reasonably well — he will increase the threshold beyond which stamp duty is payable.

Many people are talking about special savings incentive scheme accounts and all the money that will be in the economy next year. Clearly the Government needs a strategy to put some of the money coming on-stream into pension funds. Fine Gael believes a special scheme ought to be introduced for first-time buyers only. I put this to the Minister in parliamentary questions time and again. Fine Gael, if in power, would create a fund equivalent to the special savings incentive scheme, such that first-time buyers could benefit therefrom. It would be significant and helpful to them. We will make it easier for house buyers in that for the first seven years of their mortgages, they will have the interest benefit. These are some of the issues we think important. The failure of the Government has been unacceptable. It has failed to meet its commitment on social housing in the national development plan and the VAT rate on all houses has increased.

A critical issue, on which I intend to focus during parliamentary questions on 27 November, is that of the serious inequity in development levies. The principle of local authorities charging such levies is a good one. The difficulty is that there are significant differences between counties, for example, the Minister's county of Wicklow and County Donegal. Development levies are used as an income source for local authorities rather than for meeting real operational costs. They are a real issue for first-time buyers building single rural houses. The Minister should direct local authorities to address the problem. He should meet county managers and local authority members to explain what is occurring throughout the country and to ask them to make the charge fairer and more equitable. It is not equitable at present; it is seen as an extra and unfair tax which, rather than affecting developers, particularly affects those trying to build their first home.

The Minister must consider the issue of social housing on which his policy has been a failure. One of the problems is that the relevant statistics are not available. A national inventory of housing needs began last March. It is now November, yet the facts and figures are not available. If we are to plan properly, these figures must be available annually. One of the causes of this problem is that applicants had to fill in a 20-page form.

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