Richard Bruton (Dublin North Central, Fine Gael)

I move amendment No. 5:

In page 15, line 30, to delete "€2,000" and substitute "€3,000".

This amendment relates to the amount of relief available for tenants in the private rented sector. We must rethink our approach in this area. Most people have the ambition to purchase their own home; that is long ingrained in our psyche. There is nothing wrong with this and we rightly support it in public policy. However, the extent of the gap that has emerged between our support for those who opt to purchase their own home and our extraordinarily mean treatment of those who rent is highly dubious. Many of the poorest families I come across are trapped in the private rented sector because, regardless of their ambitions to purchase their own home, they cannot afford to do so. If they are in employment, they are denied access to rent supplement, the rental allowance scheme and all other State supports in this area. They depend solely on this particular tax credit as the only public recognition of their expense.

A couple paying rent in the private sector are entitled to tax relief on €4,000 whereas a couple who purchase their own home will, under the Minister's new scheme, get €20,000 relief on the interest payment for seven years, followed by €6,000 for a further eight. This represents a significant advantage in hard cash terms over their counterparts in the private rental sectors. It is €22,400 in the first seven years and €8,000 over the rest of the life of the mortgage. In other words, we are giving a capitalised amount in tax credits of more than €30,000 to people who are in a position to purchase versus those who are trapped in the private rented sector. While it is public policy to promote home ownership, our niggardly treatment of people caught in the private rented sector is difficult to justify. An alternative approach would be to introduce a housing credit, which has been strongly advocated in other jurisdictions but never given serious consideration here. It would be a flat rate credit available to people across the different spectrums, whether tenants in private rented accommodation, home owners and so on.

Our unfair approach to those renting privately has had the unintentional effect of forcing increasing numbers to apply for inclusion on the public housing lists as the only way in which they can obtain reasonable support. Under the differential rent arrangement, the maximum one pays is 15% of one's income over a certain figure in rent. We are creating an extraordinary position whereby people who are renting from the local authority have access to a good public subvention, private purchasers likewise receive good support, as do those who are unemployed and in receipt of rent supplement, but people who work and rent privately are screwed. I do not think it stacks up. I know the Minister will talk about his priority, with which I agree, of building up infrastructure under the national development plan. Public policy has been promoting a forced concentration on housing as the infrastructural asset we want to develop. Should we continue to focus on housing assets in this way? Perhaps we should start to move towards a continental attitude to home ownership. One has more flexibility when one is renting one's home. Renting results in a higher level of utilisation of the housing stock. We would not have to invest such a high percentage of our scarce resources in our housing stock if it were used more efficiently. This serious issue needs to be examined. We should give some assistance to people in the private rented sector in the short term. I am sure the members of the Commission on Taxation will examine this area.

While there is a real need to develop this country's infrastructure, I do not believe we should try to contain the deep commitment of the people of this country to trying to own their own homes. We should continue to support home buyers. We need to consider whether the huge discrimination faced by those who wish to avail of the private rented option continues to be justified. I honestly think it is not. I cannot stand over it from the perspective of short-term equity, regardless of any consideration of how we use our assets. Those who attend my clinics are, by and large, people in the private rented sector who are on some interminable waiting list for a council tenancy which, in many cases, they will never get because they do not have enough points. I am sure the same is the case in the Tánaiste's clinics. We have to tell such people they have no chance of getting a council tenancy. Given that the Central Bank has reported that 50% of the population is unable to buy a home, it is likely that those who come to our clinics in these circumstances are below the home-buying threshold. Similarly, the affordable housing scheme, which is a good idea, is of no assistance to them because it is not delivering the beef. Last year, which was a very good year, just 2% of new housing was in the affordable housing category. It is just not delivering and will deliver less, obviously, as a result of the collapse in private house building. We need to rethink our strategy in this area because we are constraining the housing options of a particular category of people.

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