Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

It is important to put the motion in context. We are not discussing the substance of the Bill or indeed of the proposed amendments at this point. What we are discussing is a motion which would allow the committee to consider the amendments in question. That is my understanding of what the House must decide on. In this sense it is a technical question on which the House needs to decide. From a Fianna Fáil perspective, we have no difficulty supporting the motion to allow the amendments to be taken on Committee Stage of the Home Building Finance Ireland Bill 2018, which will be taken tomorrow.

It would be remiss of me not to express the serious disappointment of our party with the delay in bringing forward this legislation. We are now heading for the first anniversary of the announcement of this initiative for the provision of finance for the construction of residential developments. It has taken this long. I know the process of drafting legislation, taking it through all the various channels within the apparatus of Government, is not quick or straightforward. I ask the House to consider, however, the evidence given by representatives of the Construction Industry Federation to the Committee on Budgetary Oversight yesterday. I asked them about the environment for finance, for construction, and they made it clear that while the pillar banks are lending a certain proportion of the costs of developments, perhaps up to 60%, the balance, as the Minister of State well knows, in many cases is coming from international funds and is very expensive debt. It can be 10%, 12%, even 14% or higher; therefore, this Bill and what it provides for is urgently needed. That is why we want to see Committee and Remaining Stages taken as quickly as possible. Obviously, we must get this right, but we need that funding to be available. It is quite a modest measure overall but is necessary and important.

It is worth remarking on the proposed amendments which give rise to this motion. They are related to the local property tax, which would not normally sit within this Bill but rather within more relevant legislation. I understand, however, that the Ceann Comhairle has ruled that the Finance Bill is not the appropriate place for these changes and that, because these amendments were not envisaged and were not really part of the original Bill as published, this motion is required to allow the committee to take them. The amendments themselves are technical in nature and provide that mortgage interest deferral relief can continue through 2019, pending further changes to the local property tax. This really just allows for a continuation of the existing system for mortgage interest deferral relief, providing for the higher qualifying thresholds, which would allow people to defer the LPT bill. This deferral mechanism is a very important provision for many families paying for mortgages and in many cases paying high interest rates. We therefore support the retention of this relief through 2019 and in advance of whatever reforms being brought in being enacted.

We are very much aware of the PAYE modernisation programme, which will come into effect on 1 January next year, and the provision whereby LPT can be deducted from salary by an employer. That this has a legal basis through 2019 is important and is a measure we support. Under the existing provisions, as I understand, it is due to end at the end of this year, whereas any change to the LPT will not kick in until 2020, following the re-evaluation if it takes place, as is currently envisaged, in November 2019.

We look forward to the review of the LPT. We made a submission as a party in this regard some months ago. I ask the Minister of State to look at the proposals we made, which included increasing the qualifying income threshold by which people could avail of the deferral mechanism because it is quite low. It is as low as €15,000 for a single person who does not have a mortgage. There are many people, particularly elderly people, with high fixed costs who may have a modest occupational pension on top of the State pension but for whom the LPT bill is a serious burden. I do not think it comes as a cost to the State if that deferral mechanism exists. The money will be collected. It is the first charge on the property, and consideration should be given to increasing the deferral thresholds. We have suggested such an increase. Similarly, we have suggested a change to the rate of interest charged - or the interest penalty, as such - for a deferral, which is currently 4% a year. I understand it is simple interest but, given the environment of very low interest rates we are in, I do not believe this is justified. I think the Government should look to reduce it. We have suggested 2%, which in our view strikes the right balance between there being some cost associated with a deferral but not an unnecessarily punitive one. We will come to these issues when the LPT is actually being reviewed. I am not sure if the Minister has the report yet. The Sunday newspapers certainly seem to have it, or have received leaks from it in recent weeks.

See this speech in context