Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

I thank Sinn Féin for bringing this motion forward on mortgage interest relief. While there would have to be some debate about whether this is the best way to assist people, it highlights that something has to be done to assist people who are being hit with these increased costs to service their mortgages. I have certainly received quite a few messages and emails from people who have been pretty hammered with these mortgage interest hikes. It is difficult to see how people can absorb these interest hikes at the same time as they also are seeing significant increases in the cost of living at every level across the board. We saw the figures regarding food inflation today and we know about the energy price hikes. The general cost of living is going through the roof, so this is another hit for another significant cohort of people. In the round, we are talking about, and estimates vary, ordinary workers on average probably being €4,000 to €5,000 less well-off than they were a couple of years ago. This is a huge hit for people and we must do something.

The first call I would make on this Government, given the sort of multiple hits people are taking, and I am not just saying this as some sort of rhetorical flourish to have a go at the Government, is that we really have to have an emergency budget soon to deal with the cost-of-living crisis that people are facing. There is a whole range of measures that must be taken. We can debate the whos, whys and wherefores of what has been done but it is just not enough and something will have to be done. I do not think we can wait until October to do it because people are really being hit hard. Different people are being impacted in different ways but across the board, real pain and hardship are being felt by people.

This cannot be disconnected from the issue of housing and the cost of housing. The Minister might be interested in this example, as well as the Minister of State, Deputy Carroll MacNeill, because it is in her constituency. It is also emblematic. I went on to daft.ieto look at house prices in Cherrywood the other day. The cheapest thing that could be seen for sale there, for very modest houses, was on sale for more than €650,000. The prices went up to well over €700,000. This is the biggest residential development in the country. It originally got planning permission under the strategic development zone, SDZ, measure for 8,000 houses. This figure has recently been increased because of heights and so on. This development would have had a major impact on the housing crisis in our area if the houses were sufficiently affordable and if there was a greater proportion of social housing etc.

These prices, however, mean this development is just contributing to making a bad situation worse. If there are people who can manage to get a mortgage on these houses, and it is necessary to have pretty high earnings to get one on a property of this price, this is an accident waiting to happen if anything else goes wrong, as we know from the Celtic tiger years. House prices then were so high that people did get loans from the banks but then they lost their jobs and we were in a nightmare scenario. We cannot have house prices at this level and we cannot have ordinary working people on average or even a bit above average earnings trying to service mortgages for houses that are this price. I just do not believe this is sustainable. It is an accident waiting to happen. We must, therefore, deal with the affordability of housing.

While this is a multifaceted issue, in essence I simply do not see what the point is in building houses that people cannot afford.

The first thing the State must do is flood the housing sector with public and affordable housing and, insofar as it can, take further measures to control the behaviour of the banks. I do not want to be overly political about this, but it is the truth because it was said explicitly at a time. One of the reasons we have such unaffordable house prices in this country is because after the crash the policy of the Government was to refloat the property market. That was a conscious policy aimed at restoring the balance sheets of the banks, and it was explicitly stated by Michael Noonan, the former Minister for Finance, at the time. It might have seemed like a sensible idea - we did not think it was at the time - but, in retrospect, it was an absolutely disastrous idea because the imperative to improve the balance sheets of the banks and save them has led us to where we are now.

Those same banks are still getting tax breaks as a result of losses carried forward. They are back to making extortionate profits. We are in and environment whereby Irish banks and mortgage lenders are charging higher interest rates than is the case anywhere else in Europe. While the Government will not agree, I am of the view that this is an argument for having a not-for-profit, publicly controlled banking system to prevent profiteering. The banking sector is in trouble whatever way one looks at it. Some people think the answer is more competition; I do not. I just think it proves that a competitive banking market, in and of itself, is an accident waiting to happen. We need a banking system that is actually about serving the interests of society and not just making profits for investors and shareholders. We need to ensure that, where it is needed, credit is available to ordinary working people to allow them to put a roof over their heads. Unless we get that model, we will be in trouble.

We need to ensure that housing is affordable for ordinary people. I just do not think the market has shown this. How many years do we need to go on before we decide that whatever role we think the market has - the Minister will say we must have some role for the private market - it is absolutely clear that the private market is not capable of delivering housing that is affordable to the vast majority of working people. The evidence is plain to see. Some people may be able to afford houses for €700,000, but the vast majority cannot to so. If we do not address that, messing around with credit will not fix the problem.

The Government must think about the prospect of basic incomes to help people through this. That comes back to the emergency budget issue. Average workers cannot soak up a loss of income of €4,000 to €5,000. Again, this is an accident waiting to happen. People will get very angry unless we address that quickly. There is one basic thing the Government must do. The Minister will say this could potentially be inflationary and all the rest of it. At a minimum, people's incomes, through wages, pensions or social welfare, must keep pace inflation but they are not. If they are less than keeping pace with inflation, people are poorer and, as a result, more vulnerable to other things that are happening, such as the cost-of-living crisis, mortgage interest hikes or whatever. As an emergency necessary measure, we must do that as well.

For the structural change that is necessary, the State must be able to deliver affordable housing. Affordability means that people should not be spending more than 20% to 30% of their net income on putting a roof over their heads - whether that is servicing a mortgage or paying rent. If the State is not capable of doing that, we have problem. At the moment, it is clearly not doing that. The market, on its own, is absolutely incapable of doing it. Unless we confront that reality, we are going nowhere.

We also need to look at wealth distribution. We do not even have proper figures on wealth distribution. Whatever take one has on it, the Oxfam report demonstrates that the rich in this country are getting richer and the poor are getting poorer. That is an indisputable fact. Unless we introduce a taxation policy that will start to address the gap between rich and poor, we are heading down a very difficult and troubled road. The Government needs to start to look at wealth distribution. That means wealth taxes and even knowing where the wealth is in our society.

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