Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I also acknowledge all the work done by the officials in facilitating the smooth running of Committee Stage of the Finance Bill. I want to use my seven minutes to clarify a matter that was raised on Committee Stage in an exchange on the employment wage subsidy scheme. A debate took place between Deputy Doherty and me on amendments Nos. 176 to 180 which related to section 61. The issue arose towards the end of the Committee Stage debate and it related to the nature of flexibility that I have, as Minister for Finance, to extend beyond 31 January 2021 the enhanced rates of subsidy available to employers under the scheme that are being legislated for as part of the Finance Bill process. The enhanced rates that apply from 20 October 2020 until 31 January 2021 are due to cease on 31 January. However, the position is that following the enactment of the changes that were introduced on Committee Stage, I have the flexibility to retain the enhanced rates of subsidy without the need for primary legislation. This will form part of the existing authority that I have to amend aspects of the scheme that relate to rates, qualification criteria and the duration of the scheme. The scheme will be kept under review. At this time, I do not have plans to change those criteria before 31 January. I will make a decision at that point. Given that it was the subject of an exchange during Committee Stage of the Finance Bill and is a very important part of the Finance Bill, I wanted to clarify the matter at the start of Report Stage because I did not give the correct answer when the matter was raised with me by Deputy Doherty.

We take a different view on the help-to-buy scheme. I went through many of these arguments on Committee Stage, but I want to emphasise a number of them again now. First, because this scheme is concentrated entirely on new homes and at first-time buyers, I do not believe it has the inflationary effect that the Deputy suggested it has. Second, that view is borne out if one looks at the value of homes that are included and were supported by the help-to-buy scheme. From January to the end of October this year, it stood at €329,000 while across the same period a year ago it was €328,000. Third, I heard many Deputies make the point that we need to have plans in place to support the direct building of houses. Those plans are in place. They are in place through the Department of Housing, Local Government and Heritage and the work done by the Minister, Deputy Darragh O'Brien, and his predecessor as Minister, Deputy Eoghan Murphy. We have capital plans in place that are multiples of the cost of the help-to-buy scheme that are about either directly building homes or putting in place the infrastructure through public money to allow homes to be built elsewhere. Across the Government, we have a variety of different schemes in place where public money is being used to build homes or enable them to be built. The help-to-buy scheme is a low portion of the entirety of schemes that are in place elsewhere. If one looks at the various independent reports that have been done on the help-to-buy scheme, one will see that those reports say that the scheme has had a minor effect on the movement of prices across that period.

To deal with the point raised by the Deputies, I will always keep this scheme under review, as I do with other schemes. I believe the change we have made to the scheme is merited in light of the uncertainty in the housing market and of what we need to do to continue to encourage the building of new homes this year and next year. I can tell it does not have the inflationary effect that is being suggested by the Opposition. I believe it is appropriate that we help first-time buyers through the tax code with the purchase of their first home.

See this speech in context