Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

My views on the help-to-buy scheme have been long on the record. The Government introduced it without carrying out any assessment of its effectiveness and the goalposts have been shifted time and again as to why it was introduced. Originally, it was to help individuals gather their deposit but then the Central Bank pulled the rug from under the Government and changed the rules. We now see very clearly that the majority of people availing of this have no problem reaching the Central Bank's minimum requirements in getting a deposit but they still get up to €20,000 tax-free. We just have to look at this as handing money to individuals.

I have spoken on this many times and house prices are escalating at a dramatic rate. This is a case where the Government is not seeing the wood for the trees. When prices are going up by 10%, 11% or 12% per year, the maximum of €20,000 that one can get in one's pocket is just a fraction of the rate prices are increasing. It is the main problem and we must stop house price inflation. Economists and people with expertise in the area have said time and again that this scheme leads to house price inflation. The best the report carried out by the Government a year after the fact could say is that findings are inconclusive, but it also mentioned everything I referred to on Committee Stage. The issue is supply and this is a demand-side solution. This is quite basic as there is a problem with supply but this scheme increases demand. Therefore, it does nothing to resolve the supply-side problem.

This was put to the former Minister, Deputy Noonan, and he argued this scheme will encourage developers to build houses, therefore increasing supply. That cannot work because there is only a set period in which this scheme will exist. If a party was not planning to build a house in the first place, there would be no planning permission on a site and that process would have to be gone through. There would have to be tenders for the build before the construction. It could be a three-year lead-in period and at that stage the scheme would no longer be available. It simply cannot work.

I have no problem with Deputy McGrath's amendment but I wonder if he is sincere about it and will push it to a vote. When we put forward a similar amendment on Committee Stage that would have monitored the effectiveness and value for money of the help-to-buy scheme, Deputy McGrath did what Fianna Fáil does these days - he abstained and sat on the fence. The amendment was defeated by one vote, arising from Deputy McGrath's refusal to vote. I welcome that he has tried to claw back a bit of integrity with this issue and has put forward his own amendment. I will support it as there should be cost-effectiveness and we should monitor such matters. I hope the Minister will agree with us but this should have been done on Committee Stage. There was nothing to fear from the amendment I put down on Committee Stage, which sought a report on the effectiveness and value for money in the help-to-buy scheme.

Deputy McGrath is correct about the recommendations of the report that was published on budget day. The Minister's predecessor gave the commitment it would be published prior to budget day and there was no reason not to do it. The only reason to hold back anything until budget day is if it would have serious consequences for the market. For example, if a report indicated stamp duty should be increased to 6%, I would completely understand a Minister not publishing it until budget day because it would have given a clear indication of where the Government was going on that. This report did not state anything like that. The report in question was published on budget day because it is critical of the Minister's measure and it does not prove that the scheme assists, in any way, shape or form, with supply. It indicates there is a supply-side problem and this is a demand-side solution and it notes that the majority of individuals benefitting from this cash in their pocket do not need this money to meet the Central Bank's rules for minimum deposits. Its findings are inconclusive and there is an indication that more study needs to be done. It is critical of the fact these studies were not carried out beforehand.

As I said, I have no problem supporting the amendment. We discussed this on Committee Stage. Everybody can change their mind and I welcome that Fianna Fáil has done so and wants us to monitor the effectiveness and value for money of this scheme. I would have preferred if Fianna Fáil supported Sinn Féin in seeking to have this scheme ended. All this is doing is contributing to pushing up house prices and putting money into the pockets of developers.

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