Cian O'Callaghan (Dublin Bay North, Social Democrats)

These resolutions are to fix the serious flaws in the financial resolutions brought forward on budget night. Those mistakes the Government made just a few weeks ago were highlighted to it on budget night but it ploughed ahead regardless with its flawed financial resolutions. The effect of the resolutions before us today will be to put more money into the pockets of developers. This is another example of the policy capture of the Government by developers and their lobbyists.

People are struggling to keep food on the table. Disabled people are €1,400 worse off as a result of the budget, according to the Disability Federation of Ireland. A recent report by Barnardos found four in ten parents are either skipping meals or eating less to enable their children to eat. As we speak, there are people in cold homes afraid to turn on their heating. With these resolutions, the Government is giving more money to developers at a time when their profits are already booming. Profits at Glenveagh Properties, for example, more than doubled last year. Rinne an tAire na roghanna míchearta. The CEO of Glenveagh had his salary increased by 80% in 2024 to a whopping €2.7 million a year. That is not a struggling developer in need of taxpayer subsidies.

Just over 5,000 children are homeless in this country and there is an entire generation locked out of home ownership. Yet, the Government is intent on prioritising boosting the profits of developers. That is what is happening. When we brought this up in committee, the former Minister for Finance, Paschal Donohoe, admitted it would have the effect of increasing profits further. We put it to him that profits of developers are already extremely high. The profits of the publicly listed companies are approximately 21%. How much higher does the Government think developers' profits need to go? They are at an extremely high level as it is. According to the former Minister, these subsidies will make them higher again. He said in February this year: "What I am not going to do is reintroduce or propose the very tax reliefs that did such harm to our economy...".

In the battle that went on during the year, those within the Government pushing for these reliefs clearly won. VAT for developers is being slashed, at a full-year cost in future years of €390 million. That is without any affordability conditions, no price caps and no guarantee that a single home will be more affordable as a result. This is an unheard of kind of measure in a European context. In other European countries where significant investment goes into housing, whether through tax expenditure or more direct investment, which is, of course, better value for money, it is always done with the aim of securing affordability. Here, we see subsidy after subsidy that boost the profits of developers and do not make housing more affordable.

There is a key problem with this in terms of productivity in the housing construction sector. Tax incentives are not addressing the capacity constraints in the sector, the infrastructure challenges or the workforce shortages. We have had warnings previously from the ESRI that these kinds of tax expenditures are dead weight and should not be pursued by the Government. It is not just the ESRI saying that. A spending review by the Department of public expenditure stated that any reductions in development costs through tax breaks are "priced into what developers will bid for land, thereby increasing bidding rates, and dissipating any savings in costs achieved elsewhere". That is what the Government's economic evaluation service has warned the Tánaiste about and he is not heeding its advice. It is saying clearly that cutting VAT on apartments will simply increase the price a developer will pay for land. It does not make apartments more affordable but it does make land speculators richer. That is the advice coming from within the Government.

There have been a number of Government subsidies and initiatives in recent years but they are not having the effect we should be seeing on affordability. Instead, land prices are increasing. Figures published recently by the CSO show the price of residential zoned land increased by 42% since 2018. As the Tánaiste knows well, any Government subsidies should be well designed and well targeted. This is not happening in the housing sector. The range of subsidies are masking over inefficiencies and a lack of productivity in the sector. That is what happens when poorly designed subsidies like these are introduced.

Looking at productivity in housing, the Central Bank quarterly bulletin No. 2 of 2025 states that the relatively poor productivity performance in the construction sector in Ireland is also evident in a cross-country setting. In 2024, Ireland was the second lowest across comparable European countries in terms of productivity. Is the Government addressing that productivity problem? No, it is bringing in more subsidies that will act as an incentive against those underlying issues in the construction sector being tackled. According to analysis by the Central Bank, investment in capital stock in the sector, that is, machinery, equipment and technology, has been declining every single year for the past decade. Profits are going up and Government subsidies are going up but the investment in capital stock needed to make the sector more productive is declining each and every year by 2.5%. It is going in the wrong direction. That is what the Government's policy of subsidies to increase profits for developers is doing. Are those developers investing the extra money in making the sector more productive? No, they are pocketing it by way of increased profits. That is exactly what is happening and it is the wrong approach. Profits and subsidies are up and productivity is down, with the hard-earned money from Irish taxpayers going into the pockets of developers. That is why we will oppose these measures.

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