Pearse Doherty (Donegal, Sinn Fein)

I raised this issue earlier. We have later amendments in relation to the reduced VAT rate on apartments that have been ruled out of order. This amendment from Deputy O'Callaghan deals with the tax reliefs that have been brought in by the Government for property developers.

The former Minister made the claim at the start of the debate on this Bill that this measure was designed to reduce the cost of apartments. Nothing could be further from the truth. It is not about reducing the cost of apartments. I will again put on the record what the former Minister had to say only two weeks ago when he debated this issue with us at the finance committee. He stated:

If we were to bring forward a measure like this, which would also be an affordability measure, logically, it could not be a viability measure at the same time. It cannot be both.

He was open, transparent and, indeed, honest. This is not about reducing the cost of apartments. It is not about affordability. The former Minister made clear that it cannot be both; it is about viability. What does viability translate as? It means that profits for developers have to be sufficient for them to decide to build out at this point.

I have made the point that there is good research - this does not mean to say that it applies here - in Britain that looks at the market dominance of a number of players and how they use that dominance in terms of land hoarding, building selectively, releasing certain properties at certain times and squeezing the UK Government for more incentives. By God, did developers here squeeze the Government and get what they wanted. We talk about finance measures and an element of deadweight, basically, the effect of the measure and that maybe 30% or 40% of the activity that it is hoped to bring about would already happen even without the tax measure. Has there ever been a tax cut like this where 100% of the expenditure for next year, namely €250 million, is considered deadweight? Every apartment that will be the subject of reduced VAT is viable. Every one of them is currently under construction. The former Minister told me that, since it was introduced on budget day, this measure has already cost over €20 million. That is what it costs per month.

It is not even just next year that the deadweight will apply. It will continue into 2027. The vast majority of the €390 million that this is going to cost in 2027 relates to apartments that are already under construction. We know that because apartments cannot be built in a year. It just cannot be done. On average, it takes two years to build apartments. VAT is paid, obviously, at the point of sale in arrears. Therefore, the vast majority - if not all - of any benefit that will be accrued next year or the year after will be in respect of apartments that are either under construction or about to go to construction. That is the level of deadweight involved. That is the amount of money we are talking about.

I have called those in this Government serial wasters in the past. My party president has raised the issue of more waste that we have seen in terms of steps in a public park that cost more than €700,000. There are many examples of this but, by God, what we are discussing here takes the biscuit. The Government is giving €640 million next year and the year after in a tax break to developers for apartments that are already being built. There are 18,000 apartments being built at present. Apartments that were sold last week benefited from this tax break. Apartments that are going to be sold next week will benefit from it. There are viable. If they were not viable, they would not be being built.

The Tánaiste is talking about a measure and disclaims the fact that this is not about selective release, house prices, pushing up prices, etc. Let us pretend that is not the case for a moment. The Tánaiste is talking about a measure that is about releasing new apartments into the system. Of the €1.5 billion that this measure is going to cost for the three years that it will be in existence, however, over €600 million will go into the pockets of developers who are already building apartments. The Government has not even attempted to hide whose side it is on.

I made the point earlier that these developers are making huge operational profits. The two largest companies in the State are publicly listed. Thankfully, they have to publish their accounts. We can see their operational profits of 20% and 21%, respectively. That is not somebody scrapping to get by; it is a massive transfer of wealth. The Government does that. The Tánaiste will defend this at a time when the Government screwed over so many people in the budget, when it left people so much worse off, when it refused to deal with the cost-of-living crisis, when so many people are under pressure with their energy costs, when so many are under pressure with their petrol and diesel costs and when so many are finding it tough to put food on the table because of grocery price increases. Of course, the Tánaiste has to balance the books. Of course, he has to make sure that the Government's priorities are to the fore. Of course, there is not an endless amount of money available to the State. However, the Government made choices. It made the choice to put €250 million into the pockets of developers next year in respect of apartments that they are already building. The Government made the choice to put €390 million into the pockets of those same developers the following year for apartments that are currently under construction. Those are the wrong choice. They are the choices of Fine Gael and Fianna Fáil. They are the choices of a Government that does not have the backs of ordinary workers, because it has screwed them over. Again, the Government's priorities are clear. There are always winners and losers.

Under Fine Gael, the winners in this case with this measure are the developers.

I missed the press conference before the election where the Minister promised hundreds and hundreds of millions of euro to developers. Was that just a wee side, secret, private deal with them? The Government broke all its public promises to renters, on childcare, and to the people who wanted the income tax relief it promised them.

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