Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I thank the Deputies for their questions. Deputy Boyd Barrett is quite right to say that wealth is generated by workers, but there are different forms of workers and different forms of wealth. A lot of wealth is generated by innovation and creating new things. We need to always bear that in mind. There is a lot of research showing that 75% of all new global growth in recent decades has been driven by innovation, new inventions and entrepreneurship, that is, not by people doing the same things, but by people doing new things.

On the issue of skilled people leaving the country, Deputy Boyd Barrett is absolutely correct; there are skilled people leaving the country for lots of different reasons. There are way more skilled people coming into the country every year. There is net migration of skilled people into Ireland and that has been the case for a very long time. As I pointed out earlier, even if it is narrowed down to just Irish citizens, 80,000 left in the past three years but 90,000 returned. Notwithstanding the high cost of housing and the high cost of living, skilled people are pouring into this country because of the jobs that are available and more Irish citizens are returning to the country than are leaving. These are just the facts.

On what we can do to make housing more affordable, increasing incomes is a big part. It is the ratio of incomes to house prices that matters the most. The help-to-buy scheme helps great numbers of people to get their deposit for their first home. The derelict properties grants help a lot too. It is good to see dereliction now falling. The first home scheme makes a big difference in closing the affordability gap. There is also the construction of much more social housing because social housing benefits everyone, not just those who are taken off the housing list as a result of getting homes. It also helps to bring down the cost of housing generally and makes more places available to rent.

I took a look at the SCSI report that is being reported on today. Unfortunately, I believe its findings have been misreported. I can understand why people misunderstood it. The SCSI specifically states that the first home scheme is not included in its calculations.

That would close the affordability gap. Indeed, it would eliminate it in many cases. It only applies to three-bedroom new semi-detached homes. Most people do not buy three-bedroom new semi-detached homes. Most people buy homes that are not new and most first-time buyers tend to buy two-bedroom, rather than three-bedroom, properties. As is often the case with these reports, it has been incorrectly reported by elements of the media and then incorrectly quoted by politicians, which is regrettable but happens very regularly.

As regards Deputy Murphy's comments, we are not planning to introduce an Internet tax. That was one option of many considered by the working group. The disadvantages were clear. It would not just be a 1% or 2% levy, but would have to be €10 or €15 a month, which would be too high, and there would be huge difficulties in applying exemptions, which we currently apply to people on very low incomes and to pensioners, for example. It did not jump out of the report as a good option. Rather, it jumped out of the report as a not-very-good option, but it is always important to consider all options.

As regards Deputy Moynihan's comments, as I acknowledged earlier, the cost of doing business is very high and it is rising, particularly for the hospitality sector and very labour-intensive sectors, such as retail, for example. We are seeing many cafés and restaurants closing. There are many of them opening, too, and a lot that are very difficult to get into, have a lot of business and are very busy. We are not seeing any evidence yet of employment levels falling in the hospitality sector but we need to monitor and watch out for that very closely. As I have said before, there is no point putting up people's wages if the net result is they lose their job or have their hours cut. We are not seeing much evidence of that yet.

In terms of businesses struggling, help is on the way. A quarter of a million euro will be injected into small businesses between now and the end of March to help them with their costs. The tax warehousing scheme remains in place, but tax cannot be withheld forever. Businesses do have to pay their taxes. Members should bear in mind that some of that tax is PAYE, money that people earned a year or two ago that has not yet been paid to Revenue. In addition, we are seeing energy costs falling, which is encouraging.

As regards VAT rates, for most of the past 30 years the VAT rate for hospitality has been between 12.5% and 13.5%. On a temporary basis, it was reduced to 9% after the financial crash and during Covid. In the run-up to the budget, we considered separating accommodation from food service. That is technically possible. It would take time to implement but the cost, unfortunately, ran into hundreds of millions of euro and, for that reason, a decision was made not to proceed with it.

As regards Belcamp Manor, just like Deputy O'Callaghan and everybody else in the House, I do not like to see investment funds buying up family homes. We changed the law in 2021 to prevent that from happening. This particular permission was granted in 2019, two years before the law changed. Stamp duty is currently 10%. Clearly that did not deter the investment fund in this case from buying these homes. Sinn Féin is saying it should be 17% and the Social Democrats are saying 100%. That is not the way you do tax policy. We need to examine this properly-----

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