Dáil debates

Wednesday, 15 May 2024

Future Ireland Fund and Infrastructure, Climate and Nature Fund Bill 2024: Report and Final Stages


4:30 pm

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

I thank Deputy Doherty for tabling these amendments and all the other Deputies for their contributions. We had a good discussion of this issue on Committee Stage. We do not agree entirely, that is for sure, but I set out then and am happy to set out now the reasons we are adopting the approach we are.

I reiterate at the outset that housing will benefit from the establishment of the infrastructure, climate and nature fund. This fund will be spent on infrastructure over time. We have to remind ourselves that the principal purpose of this fund is to ensure we can maintain a consistent, high level of public capital investment into the future, including in housing. That is the first and principal objective of this fund.

We can all agree there are lessons to be learned from the past when investment in housing and other areas of critical public infrastructure was significantly reduced because the funding was not there. This created a stop-start approach which is not conducive to providing certainty or medium-term strategic planning. This stop-start approach also impacts on the capacity to deliver infrastructure, as skills and competencies in businesses get lost during times of economic downturn and are difficult to replace when economic conditions improve. This fund can be deployed to smoothen this investment cycle and support capital projects, including housing development. As I said in respect of the previous amendment, we have increased capital expenditure from €4.5 billion to its current level today. Our aim is to grow capital expenditure and maintain it at a consistent level to develop and maintain capacity in the building sector and in the delivery of houses. Having this fund in place to be used in a fiscal or economic downturn allows for such capital expenditure to continue ensuring that housing provision will not be impacted as we saw in the past. That is the first point. Housing will be one of the areas which benefits from the establishment of this fund.

Second, this fund and the €3.15 billion earmarked for use between 2026 and 2030 for environmental purposes is not the sum total of Government expenditure. It is just one piece of the overall landscape of Government expenditure. We all recognise the challenges that exist in the housing sector but I believe, when I look at the data and figures, that we are making progress on housing. The Government has put in place a major programme of house building. We are building public homes once again at scale and that is the way it should be. Deputy Gould referred to the house building in Cork. Last year, Cork City Council delivered more than 800 social homes, most of them new-build. That is real progress and is on the back of the work Cork City Council did on the housing waiting lists in recent years and in the waiting list actually falling. I have no doubt the Deputy will acknowledge that. Cork City Council's contribution was part of a national outturn last year of almost 12,000 new social homes delivered, including more than 8,000 new-build homes. More than 4,000 affordable housing supports were delivered by a whole range of different bodies and schemes including approved housing bodies, local authorities, the Land Development Agency, the cost-rental and tenant in situ schemes to name just a few. Thus far, in the shared equity scheme more than 4,000 approvals have been issued since the scheme was launched. We all know of people now who are actually in a position - using the State supports that are there, in some cases a combination of affordable purchase and the help-to-buy scheme, and in other cases a combination of the help-to-buy and shared equity scheme - to bridge that gap and buy a home for the first time. I think it is a sign of real progress.

Yesterday, the Minister, Deputy Darragh O'Brien, brought a report to Cabinet and the data is very clear. Looking at mortgages - not just at approvals but I prefer to refer to drawdowns because that means people have actually been able to purchase - there was record growth in mortgage drawdowns by first-time buyers in 2023 with some 25,600 mortgages drawn down during the period. It was at the highest annual level since 2007. This represented some 500 first-time buyer drawdowns every week in 2023. Do we have more to do? Absolutely, we do but all of the evidence points to momentum and to increased activity.

For example, looking at where we are in terms of commencements, there have been 12,000 commencements in quarter 1 of this year. Deputy Mattie McGrath referenced the suspension of development charges and water connection fees. They have been extended and all of the details are on the Department for housing's website. Last year, there were 41,225 planning permissions, which is up 21% on the previous year. We have to work together to make sure we translate that into construction activity and into completions. That means focusing on apprenticeships, labour, funding, having an adequacy of zoned land and having land serviced into the future. All those different elements are absolutely essential to ensuring we can deliver the homes we need.

The amount of money we are spending as a Government is complemented by a range of other sources that we spoke about at length on Committee Stage. The Housing Finance Agency alone has a loan book of €6.7 billion. The Land Development Agency has capital of up to €5 billion. If Deputy Gould looks at the apartments being built on Horgan's Quay in Cork city, it is the first major scheme under way in the city centre since the Elysian apartments of 2008. It is because of the Croí Cónaithe scheme. There will be social, cost rental, and affordable purchase homes there in the heart of Cork city for the first time. That is real progress and there are many other schemes I am confident will get delivered and on-site over the period ahead.

We can all acknowledge the problem but we as a Government can point to action that is delivering a significantly increased scale of output now across the whole different range of tenure types. The overall purpose of this fund is that we will get away from that boom-bust approach to public capital investment, including in housing. I know I will get to speak again in a minute.


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