Eoin Ó Broin (Dublin Mid West, Sinn Fein)

I want to address Financial Resolution No. 4. I have to say I am not surprised that none of the Ministers from the relevant Department are here to defend it because it is quite clear they were not in favour of the introduction of this particular policy measure. There is no doubt there is a challenge in terms of affordability and viability but the suggestion that a reduction in VAT on new apartment purchases, from 13.5% to 9%, would do anything to address either of those issues is absolutely absurd. In fact, it shows that this Government, more than any of its predecessors, has been completely captured by one particular lobby group, namely, Irish Institutional Property.

When the outgoing Government was exposed for misleading the public during the election campaign on new home completions, the Government went into a tail spin and in walked Pat Farrell from Irish Institutional Property. The lobbying register confirms the volume of times he was in Government Buildings earlier this year. He looked for three things. He wanted a dramatic reduction in the quality of apartment standards - smaller and darker apartments - and he got that.

He wanted to be able to reset private rents in between tenancies to the top of the market rents. He got that. And he wanted this. He wanted a VAT reduction, which will do nothing at all to increase the output of apartments or reduce their cost to purchasers or renters, but it will do everything to put more money into the pockets of his clients, and he got that. What is really unbelievable about this measure is not just the blatant way in which the Government has decided to increase the profits of large apartment developers by an average of €25,000 per apartment, but in addition to that, it will do nothing to increase supply or viability. On that basis, Sinn Féin is opposed to it. If the Minister is able to come back in at the end of this session, I would like her to respond to four very specific questions about this resolution. Will she confirm, as it appears from the Minister's statement today, that this VAT reduction is at the point of sale and purchase of apartments? Why is the Government allowing it to be applied to buildings currently under construction? The Government will spend €250 million next year on this measure. These are apartments that are being built now, the overwhelming majority of them have purchasers now and the Government is going to blow €250 million on a so-called activation measure for apartments that are already under activation. It makes no sense whatsoever. The bulk of the people buying those apartments are approved housing bodies and local authorities. Will the Minister confirm that they will not be protected from this measure? That means the State is essentially going to be paying €20,000 to €25,000 extra for those turnkeys, which makes no sense whatsoever. Will the Minister confirm what we already know, namely, that there will be no mechanism put in place to ensure that the developers of these apartments are forced by the Government to reduce the sale price by the VAT reduction to whoever the purchasers are?

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