Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I move amendment No. 3:

In page 10, between lines 34 and 35, to insert the following: “Report on economic and distributional impact of the Help to Buy Scheme

8. The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a report on the economic and distributional impact of the Help to Buy Scheme.”.

As we begin Report Stage of the Finance Bill 2020, I acknowledge we had a lengthy debate on many of the sections and, indeed, on the subject matter of many of the amendments that have been tabled on Report Stage for further emphasis. I will not repeat all that was said on Committee Stage. We had a serious engagement over three days with the Minister on many of them, but some of them require further emphasis.

Before going further, I thank the officials from the Department and the Revenue Commissioners for their briefing material and their facilitation of Sinn Féin in preparing for this debate. I also thank the committee secretariat which made Committee Stage go quite smoothly. It was mostly held virtually. I believe it was the first time Committee Stage of a legislative measure was passed after probably more than 90% of the scrutiny being conducted in a virtual manner.

This amendment relates to the help-to-buy scheme. The Minister and I strongly differ on this issue. In my view, the help-to-buy scheme has been a flawed policy that is increasing house prices. It is putting house prices further out of reach of first-time buyers as well as for those who are moving up, perhaps from an apartment to a house. They are unable to benefit from the first-time buyers scheme, but the house prices are increasing. There is anecdotal evidence of house prices increasing as announcements are made. Not only is the Government extending the scheme year on year, it has also turbo boosted the scheme by increasing it by €10,000. The scheme was due to finish at the end of this year, but the Government intends to continue it for another year.

It is worth echoing the sentiments of the Economic and Social Research Institute, ESRI, conference. Dr. Barra Roantree, addressing the conference on the help-to-buy scheme and this version of it, said that it is likely to fuel property price growth and to increase prices. Documentation from the Parliamentary Budget Office states that the scheme is not meeting its objectives. Recently published figures from Banking and Payments Federation Ireland show that mortgage approvals have increased, but for first-time buyers the value of the mortgages being drawn down has increased on average by €10,000 to €245,000 compared to last year, so house prices are increasing. This bears out what has been said by the ESRI and other commentators who have repeatedly issued warnings.

There is also a distributional equity issue with this policy choice. Some 40% of the people who will receive €30,000 of taxpayers' money do not require it to be able to purchase a home. It is important to remember that. There are thousands of people who will be in that bracket. Many people who are listening to this debate know quite well that they could do with a helping hand, not to mind €30,000. This measure will cost an additional €43 million in 2021. For that reason, I put forward this amendment seeking a report on the economic and distributional impacts of the help-to-buy scheme. It is important as the Minister continues to extend the scheme year after year. In addition, this year he increased the value of the scheme from €20,000 to €30,000 and from 5% to 10% of the purchase price of the house. It is essential that a report is carried out on the economic and distributional impact of the help-to-buy scheme.

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