Mick Wallace (Wexford, Independent) | Oireachtas source

I am not sure where the idea to levy the local authority is coming from. Putting a levy on a land-banker who sits on his land and refuses to develop it is obviously a great idea, but I do not see why the Government wants to do the same to local authorities, except that it thinks the local authority will sit on it as well. If a private investor has a site that is zoned for development and he decides not to build on it, there is a reason for it. He is deciding that it is a better idea not to develop it just yet. He is making a financial decision. If the local authority decides not to build, or is not building, I imagine it is because it does not have the money. The Government has decided it will only levy sites where housing is needed, although I would prefer if all land zoned for development that was bought for investment purposes was levied, but we will argue about that in later amendments. If the local authority has land and there is a need for housing, obviously the State should give it to them.

I said in my last contribution that it is really important that the private sector plays a part in the construction of apartments and housing, but the truth is that we will continue to have a housing crisis until the State decides to start building housing again. There is a number of factors at play. I agree with the Central Bank's new rules, but the result is that up to 50% of people, young people between 20 and 30 years, who might be looking to buy a home in the near future if they settle down and start a family will not be able to afford to buy a property. That is for a number of reasons, including the Central Bank regulations. They are sensible, but the result is that the State must take more responsibility for providing housing for those who need it and who cannot afford to buy it. That number is going to grow. Some local authorities have land and are not developing it because they could not get State money because the State did not want to invest any more in the construction of housing than it had decided. Sadly right now there does not seem to be an appetite for the State to start building many houses.

As the Government's so-called strategy specified before Christmas, it will remain very dependent on the rental market for its housing. The lack of joined-up thinking is a bit scary. I have made the point in here on a number of occasions that much of the development land that is out there now has been bought by the big investment funds. Of the ones that have decided to build on it, I can assure the House that they will not sell the majority of the units they build because from a financial point of view it is not a very clever thing to do at the moment. It makes far more sense, if they have the money to invest in building them and given that they got the land much cheaper than they would normally expect, to rent them out. That is what these big players have been doing and it is one of the reasons rents have gone so high. As I pointed out before, I have seen the rent for a rental property in a working class area of Dublin city centre on the north side of the river go from €1,000 a month to €1,400 a month in three years. The reason is that there are now so few players controlling the rental market. They can dictate the price. Whatever influence they have on the price currently, it will increase because these guys bought land at a fire-sale price, they had the deep pockets to do it because the land was sold in large parcels, and now they are going to build on it and rent out units.

Places like Dublin are brilliant places to rent property. They are hard to beat. I am not exaggerating, but one can rent a two-bed apartment in Turin for €300 a month and we are looking at around €1,400 in Dublin. That is the place to be. There is no point in those fellows building apartments in Turin and renting them out. They will not be going over there, but they will like this place. If we are going to have a housing strategy that is geared towards huge dependence on the rental market, rent supplement is going to be too expensive for the State. Currently, rent supplement does not meet the rent, because rent is too high and the State does not want to pay too much in rent supplement. That gap is going to grow. If the Government wants people to avail of the private market, because there will not be State-built houses for them, its bill for rent supplement will be so large that it cannot be a sustainable way forward. The Government will have to rethink it. We have so many issues around it. It does not look likely that we will introduce serious rent control and even if we did, it would take a couple of years before it would work properly.

The chances of us getting to grips with the housing crisis in Ireland in the next two years are almost non-existent because of the approach we are taking. I know the Government cannot provide social housing overnight, but although Rome was not built in a day, they did start it one day. We should start building houses ourselves now. I do not agree with the public private partnership model. One of the most outrageous laws in the European Union is that an EU state is not allowed to borrow money at market rates to invest in infrastructure. They insist on it going on the books. States are confined by the rules about 3% of GDP and are not allowed to escalate it. If a state borrows all this money for infrastructure, it ends up breaking EU rules.

I do not see much sense in that and I would like to hear someone make a good argument as to why the EU would not encourage investment in infrastructure. Investment in infrastructure is a powerful use of money. It is an investment in the future and it creates significant employment. Although money is so cheap - one can borrow significant sums for less than 2% on the markets - the Government will not borrow it for social housing because the EU rules do not really allow that. There are different mechanisms to get around this. They are creating little pockets where one can do different things, but how in God's name can the EU stand over the rule that the State is not allowed borrow money cheaply, keep it off the books and invest it in infrastructure? It is a no-brainer. There is no logic to not allowing it. What happens is that the State can only invest X amount in social housing or other infrastructure because it is confined by the rules. If it wants to do something else in the public sector, it must go to the public private partnerships, PPPs. PPPs are really a licence for the private sector, like vultures, to feed off the carcass of the State that cannot borrow any more money at market rate. We want the work done but we have exhausted the borrowings that we are allowed to work into the system without breaking EU rules so we must now go to the PPPs. PPPs can cost anything up to approximately the 15% mark. Thanks to EU rules, instead of the State borrowing money for less than 2%, it will give private investors 15% over a longer period of time for their investment.

I still almost feel uncomfortable using the word "neoliberal" in the House but the core of neoliberalism is the drive to privatise social services. Obviously, another aspect of it is the reduction of workers' rights and conditions. It has led us to a situation where there has been a serious increase in zero-hour contracts. Everyone throws their hands up in the air when workers, such as those in Dunnes Stores, are on the receiving end of that same philosophy. Everyone states this is not fair, but yet we go along with the neoliberal philosophy. That is why I believe that if people want fairness in Ireland, they should challenge every person who stands in the next election to state whether he or she is prepared to be part of a neoliberal grouping after the election or not. It is that important; it is crucial. Obviously, I will not get into the argument about Greece but it is part of the same argument. It is sad the way in which it has developed.

The European Union was about something else, or at least I thought it was, when it began. I thought it was about not only keeping peace in Europe and avoiding wars but about raising the living standards of people across Europe in general, in particular, on the peripheries, closer to that of those who were doing better than themselves. Sadly, as it stands, I now see neoliberalism as driving down living standards. It is reducing democracy and Greece is very much on the receiving end of it. Many in Ireland also are on the receiving end of it.

When in years to come people read the history of the period from 2008 to date, and probably later, how NAMA has operated, who has benefited from it and who is picking up the tab, they will find it hard to believe. We have serious problems and, as I keep saying, our housing crisis is not disconnected from that. The failure to build State housing now and the strategy of over-dependence on a rental market, which we are not able to control and which we will even struggle to ensure is affordable for many people, will be a massive problem. I had better let Deputy Cowen speak before he goes home.

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