Peter Fitzpatrick (Louth, Fine Gael) | Oireachtas source

I welcome the opportunity to contribute to the debate. Like some other Deputies I first entered politics in 2011 when I was given the great honour of representing the people of Louth and east Meath in the Thirty-first Dáil. It was a time when the country was at its lowest. We were bankrupt. We had lost our financial independence. We had to rely on others for financial support to pay the wages of our front-line staff, including nurses, teachers and gardaí. We were losing our young people to mass emigration. Jobs were being lost at an alarming rate. Our international reputation was in shreds.

I wish to remind everyone in the House that this was only five years ago. We must never forget what got us into this position in the first place. The boom and bust policies of the last Fianna Fáil Government must never be repeated. Over the course of the past five years, the Fine Gael-led Government had to make some difficult decisions to get back our financial independence. This year, thankfully, the budget has started to reverse the trend of austerity budgets in recent years. In particular, I welcome the reduction in the universal social charge. I hope this is the start of the abolition of this tax, which was originally introduced as a temporary measure.

We often hear of the squeezed middle. I firmly believe this section of society should be one of the first to benefit from a recovering economy. The squeezed middle has shouldered most of the financial burden caused by the recession. This should be recognised as we continue to recover from the Fianna Fáil-caused recession.

The increase in the State pension is welcome, although I would have preferred a greater increase for our pensioners. Furthermore, I call for clarity on the date of the increase because, as things stand, pensioners do not know the position. Another aspect of the budget that is particularly pleasing is the commitment that 2,400 new teaching posts will be created along with 800 new gardaí and 1,000 extra nursing posts.

As the economy continues to recover it is vital that we invest in our public services. I am pleased to see that children in receipt of the domiciliary care allowance will be automatically entitled to a medical card now. I come from the Border area, which has a rich history and strong tourism sector. Hence, I welcome the fact that the 9% VAT rate has been retained. I believe this rate has been instrumental in helping the tourism industry throughout the worst of the recession.

Another welcome measure in the budget is the extension of the mortgage interest relief scheme to 2020. The increase of the amount to be earned under the rent-a-room scheme from €12,000 to €14,000 is welcome, as is the introduction of the low-cost flexible loan fund for the farming sector. The provision of €319 million for local and regional roads is welcome. I look forward to Louth County Council using this funding to commence repair and maintenance programmes for the local roads in County Louth.

Overall the budget is fair and prudent but I am keen to comment on certain aspects. The introduction of the help-to-buy scheme is welcome but certain aspects need to be examined. Since the announcement, my constituency office has been inundated with calls from concerned people in respect of the 80% rule. In order to qualify for the scheme, a person applying for a mortgage must take out a mortgage of at least 80% of the purchase price. This rule is too restrictive and will result in those people who need most help being unable to access the scheme. For example, let us suppose a couple wishes to purchase a new family home in County Louth for €295,000 and they have a joint income of €60,000. That is a typical scenario in County Louth. For the couple to be eligible for the scheme, they must take out a mortgage of €236,000, which is 80% of the purchase price. Under current Central Bank rules, the maximum mortgage that such a couple could take out is €210,000, which is equivalent to 3.5 times gross income. We must also bear in mind that this is the maximum amount that the couple could borrow and, in many circumstances, the bank will not offer them this amount. Therefore, a couple earning €60,000 and looking to purchase a family home for €295,000 will be automatically excluded from the scheme under current Central Bank rules. I urge the Minister to re-examine the proposal.

I agree with the Minister that measures must be put in place to help those looking to purchase a first family home. I agree with the help-to-buy scheme in principle but it needs to be changed. I call on the Minister to consider reducing the 80% minimum mortgage threshold to 60%. This would open the scheme up to a larger proportion of people who need help most. I am keen to see a reduction in the cap for eligibility to €400,000. I strongly believe that people who can purchase a new home in excess of this amount should not require help from the taxpayer. Reducing the cap will also stop developers from pushing up prices beyond €400,000. I fear this will happen unless we address the problem now.

I call on the Minister to offer an option that the rebate can be either a tax refund based on tax paid over the previous four years or a tax credit for tax to be paid over the coming four years. This would allow those who had to emigrate during the recession to return home and still avail of the scheme. I welcome the fact that the Minister extended the city living initiative to include landlords. I look forward to the Minister making a favourable decision in respect of including Dundalk and Drogheda in the scheme soon.

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