Pádraic McCormack (Galway West, Fine Gael)

Deputy Fleming referred to the duplication of responsibility in regard to the rental subsidy scheme. The same applies to the essential repairs scheme, the disabled person's grant and other schemes. Some are dealt with by local authorities and others by the HSE. The Deputy claims there has been no cutback in funding. More than a year ago, however, the local authority in my area had to inform all applicants it could not consider their applications further because there were no funds to complete the programme.

I have dealt with constituents who have experienced problems when, for example, they applied for the disabled person's grant for the purposes of installing a shower and bedroom downstairs because they could no longer make it upstairs. One case was delayed so long as a consequence of the red tape and the lack of finance that, unfortunately, the couple concerned had passed away before the extension for which they had applied could be built.

This is the harsh reality. The Minister gave a fine speech that was high on aspiration but completely devoid of new initiatives on housing. The figures from Permanent TSB and the ESRI show the average price paid for a house nationally in September 2005 was €268,040. In County Laois, according to Deputy Fleming, that figure is very much lower. The average prices paid for a house in Dublin and outside Dublin in September were €356,220 and €231,425, respectively. Several Members on the other side of the House, including the Minister for Community, Rural and Gaeltacht Affairs, Deputy Ó Cuív, asked what the Opposition parties had done in this area. In 1996, the last full year in which Fine Gael was in office, the average price paid for a home was €88,000 in Dublin and €75,000 nationally. One should look at these figures if one is interested in comparing like with like.

The Minister claims the Government has a strong record on housing. This is the Government that abolished the first-time buyer's grant, failed to meet its commitments on social housing in the national development plan and, in the budget before last, increased VAT by 1% on building materials for housing, at a cost of €12,000 to home buyers. It made some slight compensation in the last budget in copying part — though not, unfortunately, all — of Fine Gael's policy on stamp duty. The €317,500 threshold, however, is lower than the average cost of a second-hand home and is, therefore, of little use.

I have some personal experience of the difficulties in this regard. My daughter, who works as a nurse in Dublin, got married recently and wishes to purchase a home in the capital. She and her husband viewed a two-bedroom, ex-local authority, terraced house in County Dublin. They initially bid the guide price of €250,000 but the price rose in increments until it reached €300,000. The party bidding against them then went from €300,000 to €317,500 to close the deal without exceeding the stamp duty threshold. In other words, where there is competition among prospective buyers, this measure has driven the cost of houses below €317,500 up to that threshold.

Where there are two bidders, one is inclined to jump suddenly to the price below which he or she is still ineligible for stamp duty. My daughter and her husband, who are first-time buyers, could not exceed the threshold and render themselves liable for the duty. The threshold should more realistically be set at approximately €450,000. However, I have doubts as to the usefulness of this scheme even if such a change is made. I considered it a great idea when it was introduced but it has not been so successful in practical terms.

The 2002 programme for Government pledged to assist the voluntary housing sector so that the target of 4,000 accommodation units per annum envisaged under the national development plan could be reached. In 2004, 1,607 voluntary housing units were built, even less than the figure for 2003. Only 187 affordable housing units were completed last year under the Part V provisions. The Minister made play in his contribution about the great Harcourt Terrace deal, as he calls it, where he swapped a site of half an acre for 193 affordable houses in south County Dublin. The Minister must provide clarification on this. If a builder is supplying 193 affordable houses in south County Dublin, given the cost of that site and the provision of housing there, one wonders at what price those affordable houses were sold. If they were sold at €200,000, that puts a cost of €38 million on the half acre site on Harcourt Terrace. As developers are not fools, the Minister need not praise himself for that deal. No builder would invest such an amount if the site was not zoned for residential purposes. If a builder builds 38 apartments on the site, they would have to cost at least €1 million to simply cover the site price. This is only driving the housing market further.

This is as a result of amendments to the 2002 development Act, due to lobbying from builders. Under the amended Act builders do not have to give 25% of the houses in an estate over to social housing purposes. Instead, they can provide the social housing units anywhere in the local authority area, or provide part land or money. In County Galway, any developer building an estate near Galway city where land is valuable will fulfil his or her obligation by providing the 25% social housing in Glenamaddy, Headford, Tuam or Ballinasloe or Williamstown, some 60 miles away from the development. This is forcing people out of the population centre of Galway city to far-flung areas of the county. It is adding to more traffic on the roads, resulting in hold-ups and frustration for young families working far away from where they are living. By that concession, the Minister has worsened the problem. So much for his claim he got a great deal. I want clarification of the prices of the houses finished in both areas.

Fine Gael believes a range of measures are required to address the affordability gap in housing which prevents people with incomes from buying their own homes. Innovative ways are needed to tackle supply and demand. Our policy for first-time buyers would be to introduce a house deposit saving scheme, similar to SSIAs to help young people saving for a deposit on a house purchase. First-time buyers would receive €1 for every €3 they save, provided the savings are invested as a deposit on a house. It will encourage people to save, ensuring they would have the deposit for a house. In most cases, as parents will know, when our offspring are trying to buy a house, it is the parents who put up the deposit. There is no incentive for young people who go on three holidays a year instead of saving for a deposit for a house purchase.

Fine Gael wants an independent commission on rural one-off housing which must be given powers to recommend changes in the law if necessary, as well as developing feasible policy measures to address this complex issue. The recently-issued Government guidelines on one-off rural housing were only a gimmick for the local elections, meaning nothing in the end. Often the planning offices of local authorities must deal with the reality of their own county development plans before planning permission can be granted. The guidelines are just another fake from the Minister for the Environment, Heritage and Local Government.

See this speech in context