Pearse Doherty (Donegal, Sinn Fein)

I move amendment No. 1:

To insert the following new paragraph after paragraph (3): "(4) The Minister shall, within one month of the passing of this Act, prepare and lay before Dáil Éireann, a report on the very high level of deadweight associated with reducing the VAT rate to 9 per cent for apartments, making specific reference to the amount of public money that will be directed towards property developers profit margins for apartments, that would have been built had the VAT level remained at 13.5 per cent.".

Today, the Government is asking us, as we heard, to sign up to two financial resolutions, both of which highlight the chaotic and ineffective way this Government handles housing policy. The first resolution relates to the 9% VAT rate on apartments. This is to fix the fact that the Government's budget night resolution did not actually cover large parts of the apartment market, such as dual contracts, construction services or apartments built for rent. The second resolution is no better because the Government failed to anticipate the knock-on effects of its VAT rate changes. We now need an emergency fix to the help-to-buy scheme just to ensure that apartments taxed at 9% still qualify for a scheme that has been proven to increase property prices.

Sinn Féin will be voting against these resolutions and oppose this policy. What we have before us is nothing short of shambolic in terms of public policy. The Government's latest idea to fiddle around with the VAT rates on apartments is being sold to us as some kind of bold intervention to stimulate supply. Nothing could be further from the truth because when we cut through the technical language and look at what is actually happening, this is a massive giveaway to developers. It is a handout dressed up as housing policy. It will do absolutely nothing for ordinary workers and families, who are being crushed by a cost-of-living crisis.

The Government is proposing a temporary 9% VAT rate for the supply and construction of apartments. We are told this is to stimulate development and that it is being done on social policy grounds. We are told this is necessary because the budget night financial resolution did not actually cover large parts of the market, such as dual contracts, construction services and apartments built for rent. Here we are again fixing a mistake of the Government's making. Let us be honest. This is not a targeted measure or a strategic intervention, and it is definitely not social policy. This is a tax cut worth hundreds of millions of euro, which will flow directly into the pockets of large developers and investment funds, the same players who already enjoy huge profit margins even in the middle of a housing emergency. Some housing developers are registering over 20% gross profits and the Government's answer is to give them more money. Developers in this State are not struggling, as we can see from some of their published accounts. They are not operating on tight margins and they are not pleading for survival. They are seeing record profits because the Government has created a market where supply is controlled by a small number of dominant players who build where and what they want and who name their price.

Now the Government wants to give them even more. It wants to cut their VAT rates from 13.5% to 9%, a move designed to use the second reduced rate permitted under EU rules for housing as part of a so-called social policy. Who exactly is the social policy for? It is certainly not for the families who cannot get a mortgage. It is not for workers who cannot rent a place 50 km from their job. It is definitely not for young people forced to emigrate because the Government has made building a home in Ireland impossible.

The Government is taking a reduced VAT rate that should be used to support genuine social housing and affordability and handing it to developers, many of whom have already benefited from every conceivable initiative, incentive, break and exemption the Government has thrown at them over the over the past number of years. From the croí cónaithe initiative to the first home scheme, help to buy, tax breaks for rental investors and now a reduced VAT rate for developers, every single time the Government reaches into the pockets to help the people who need it least.

Let us be clear. The measure is not even about reducing prices. The Government does not even claim that. It is not about making apartments more affordable. In a market dominated by a handful of large players and developers where housing is priced according to what the market will bear rather than the cost of construction, the VAT rate will be absorbed entirely into their profits. Developers and the Government know that.

In my time as finance spokesperson, which is well over a decade, I have never seen so much deadweight in a measure. The Minister for Finance brought forward a measure that will cost €250 million next year. Every single penny of that is deadweight. Every single apartment that it will go to is already under construction. There will be €250 million of deadweight and it does not end there. The following year, the measure will cost €390 million. Everybody in the House, including the Minister, knows that an apartment cannot be built in a year. It takes nearly two years to build apartments. Therefore, that money will also be deadweight. We are talking about nearly €640 million, the vast majority of which will be complete deadweight over the next two years.

Money will go directly to pad the already fat profit margins of developers. While the Government bends over backwards to deliver for developers, what is it doing for workers? It is doing absolutely nothing. Workers are being hammered by a cost-of-living crisis. There are skyrocketing rents, soaring childcare costs, record grocery bills and mortgage rates that have gone through the roof under this Government. People are struggling just to get by.

The message from the Government today is very clear, namely, it has no tax cuts for anyone but developers because Fine Gael and Fianna Fáil have reduced housing policy to permanent, recurring and escalating transfers of public money to private developers. Even the financial resolution before us today is simply cleaning up Government errors. It is policymaking on the hoof, as it always has been, and is designed to benefit those who do not need help.

Sinn Féin believes in supporting supply, including affordable supply, not subsidising developers' profits. We believe in using public money to build homes that workers can actually afford, not concocting another round of tax breaks that disappear into the margin of the largest players in the market. This VAT measure is not the solution. It is, plainly and simply, a massive handout. It is an abomination of public spending and a reflection of a Government that has completely lost touch with the reality that ordinary people are facing.

Sinn Féin will not support this measure that pours money into the pockets of developers while workers are left behind to fend for themselves. What people need is affordability. What people do not need is more tax breaks for those who already make fortunes as a result of this Government's housing crisis.

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