John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Financial Resolutions Nos. 3 and 4 will be discussed together.

Helen McEntee (Meath East, Fine Gael)
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I move:

(1) THAT the rate of value-added tax chargeable on the supply of electricity provided for by section 46(1)(caa) of, and paragraph 17(2) of Schedule 3 to, the Value-Added Tax Consolidation Act 2010 (No. 31 of 2010) and the supply of gas provided for by section 46(1)(caa) of, and paragraph 17(3) of Schedule 3 to, that Act, being 9 per cent until 31 October 2025, be extended until 31 December 2030 and that section 46(1)(caa) of that Act be amended accordingly.

(2) THAT this Resolution shall have effect on and from 8 October 2025.

(3) IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act 1927 (No. 7 of 1927).

This resolution provides for an extension in the temporary reduction in VAT on gas and electricity at an estimated cost of €254 million per year. At present, gas and electricity have a 9% VAT rate applied on a temporary basis until 31 October this year. This rate is due to revert to 13.5% from 1 November. This temporary reduction, introduced in May 2022, was one of the Government's responses to the current energy crisis and its impact on the cost of living. While inflation has eased and global energy prices have dropped, I believe it is appropriate to provide an extension to this measure. For many people, the cost of living remains relatively high, so the Government is proposing this extension from 1 November this year until the end of 2030. The cumulative cost of the measure since its introduction is estimated to be €746 million.

As Deputies will recall, the background to this measure is that up to April 2022, Ireland maintained a historical derogation in respect of VAT rate on gas and electricity of 13.5%. This derogation was necessary as, otherwise, the standard rate of VAT of 23% would have applied. However, following the amendment to annexe III of the VAT directive in 2022, it was expanded to include gas and electricity. This meant that Ireland could apply a reduced rate of 9% to these products in line with other goods and services to which a reduced rate applies and that is exactly what we are doing here for the next five years.

Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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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?

Conor Sheehan (Limerick City, Labour)
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This was not in either Fianna Fáil's or Fine Gael's manifesto at the general election, nor was it mentioned in the programme for Government. The Government has no mandate for this. This change in the VAT rate for certain costs incurred in the construction of apartment developments might lead to an increase in the development of build-to-rent apartments, provided there is enough demand for these high-rent units. It certainly will not lead to a single additional apartment being built anywhere outside of Dublin and possibly Cork. The Minister said the measures would help address the viability gap. However, this viability gap has not been clearly quantified by Government. If the viability gap still exists, why do the apartment guideline changes that were supposed to address the viability gap not work? If this VAT change is deemed necessary, why is it not targeted at a cost incurred on the development of apartments for affordable rental or purchase? This VAT represents a saving of about €18,000 on a €500,000 apartment. It might marginally improve viability, but it certainly will not do anything for affordability.

Earlier this year, the Minister, Deputy Donohoe, came out on national radio against what he termed Celtic tiger-style tax breaks, which he said had done more harm than good. How is this different from the Celtic tiger tax break? If not, what has changed between what the Minister said then and announced today and why is this measure not time limited? Where is the sunset clause and why is it not tied to output? This should not be a permanent windfall-gains measure if the Government is going to introduce it. The factors that contribute to high apartment costs, which include the cost and availability of finance, land, regulation and so on, are complex. Cash subsidies such as this are not actually going to increase the supply of apartments or make apartments more affordable. Like night follows day, we will be back here again in six months or a year with something else, the next thing that institutional investors and Pat Farrell are looking for. Developers are already getting huge cash subsidies through a variety of schemes. If these cash subsidies have failed to increase construction, why does Government think that this tax break will work?

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I want to speak on Financial Resolution No. 4 very briefly and support the comments from Deputy Ó Broin that this just appears to be a rabbit out of a hat. It stands as one of those examples where Ministers and probably senior civil servants sitting around a room late last week realised they had done nothing in respect of housing and needed to provide some form of a fig leaf to suggest that they were actually going to do something to address the housing crisis that has got worse every year with this Government. Somebody decided to introduce another tax break for the people who had got plenty of tax breaks and who had yet to deliver affordable housing at the required scale. Every option and every policy proposal needs to be examined in detail in order to resolve the housing crisis and nothing should be ruled out just for the sake of it. That is why Sinn Féin previously looked extensively at the suggestion of cutting VAT for specific construction sectors, including apartments.

As Deputy Doherty outlined earlier, we were informed by officials that it would be costly, very difficult to administer, and would not actually move the dial on house prices. I do not think that would be a surprise to anyone. It would simply get pocketed by the developers. It would be very useful if the Government and the Department published the advice they have received and outline what they think the output of this new policy proposal will mean, other than a big dent in public finances that could be used to give people who are struggling at the coalface of the housing crisis some support.

On Financial Resolution No. 3 in respect of the VAT rate on gas and electricity and the maintenance of the 9% rate, of course this will be supported, I am sure, across the House. I would contend that it should be the very bare minimum. The Minister's introductory remarks set out in very stark terms to me precisely why so many people will be despondent tonight. She talked about inflation coming down and about the relatively high prices of gas and electricity. This shows again that the Government does not get it. I do not think the Government understands what it means for many people when the ESB bill or the gas bill comes through their letter boxes. Electricity prices are 70% higher than they were pre crisis. Gas prices are 100% higher. That is double where they were. This has real consequences for people's energy bills and heating their homes, never mind the fact that they are getting no tax supports whatsoever and no other supports. By not providing for a cost-saving package for energy costs and by increasing costs through the carbon tax for people who rely on solid fuel home heating and who have to drive their cars to places, it means that all those families all over this State are actually going to be worse off this year than they were last year. Considering the promises that were made during the election campaign, promises that quite clearly mean nothing, the starkest thing that has been pointed out today - I think many people will see a real truth in it - is that the Government is taking a gamble here that people are going to forget this budget. This is a coasting budget on the part of the Government where its true colours come out regarding its affinity with workers and families who are struggling to make ends meet. The Government has made their lives much more difficult and I think that this budget is going to be a defining moment in the lifespan of Fianna Fáil and Fine Gael in government.

Paul Gogarty (Dublin Mid West, Independent)
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I particularly want to speak to resolution No. 4. However, I welcome No. 3 and the continuation of the 9% rate of VAT for electricity, which is very welcome. While in some people's view it does not do so entirely, it does in some way mitigate the removal of the measures to help people pay their bills. I agree with others that maybe it should have been continued for another year. I note the Fiscal Advisory Council's advice that if we take out the corporation tax receipts that were very tight, it is possibly spending beyond our means. We have to try to get the balance. I believe that the 9% VAT rate on electricity strikes that balance and I support it.

For the first time, this budget looks at the medium term. As I said in my earlier contribution, it is not multi-annual funding but the Fiscal Advisory Council did say that we also needed to look to our medium-term projections, which is in line with best practice in Europe. I noted the €12 billion medium-term expenditure on water, but it is just over €1 billion in this budget. If we are trying to deal with the infrastructural issues - and housing needs water infrastructure - we should be front-loading it.

Similarly, we need massive investment in redefining the electricity grid, in investing in offshore wind and wave energy, and in putting more into R and D. We are in a kind of wartime situation. We need to look 15 years down the road and start changing the way our Civil Service operates. We have to change the way various Departments and Government agencies operate starting right now. I did not see any of that type of vision even referenced in the budget and we need to have it.

I regard resolution No. 4 as a bit of a waste with €250 million going to investors and developers. On paper, it ticks a few boxes and we might get a few more apartments built but I do not believe that will actually happen. There is a greater risk of the VAT reductions inflating the value of land because - this will be borne out when this actually comes in and what state it comes in at - developers are going to make profits that could be described as supernormal profits, in which case they will see land as a more important commodity. The Government has said that in development plans, which are turning into ten-year development plans now, more land needs to be zoned for housing even though they are not building on the existing land. Developers will see this as a much more valuable asset and it may drive up land values, which would have a knock-on effect on the value of property.

One thing that was not addressed in any commentary on housing was the impact of industrial policy. As Deputy Hayes would know because he sits beside me on the economic committee, we have an industrial policy that tries to get the likes of software companies to relocate around the country. However, the software companies like to locate in Dublin. The problem with that is the employees of these companies who are not essential workers are pushing up the price of housing in my constituency and elsewhere. One of the top companies in Europe - I forget the name but it was mentioned during the committee debate - was quoted on the IDA website as saying that if companies could not get enough workers here in Ireland, there were plenty more in the EU who would come to Ireland to work. This means we are getting localisation-type jobs that are not creating any homegrown Irish jobs. I am not talking about Irish people, but about the types of job we need to be filled by people from abroad, such as construction workers, doctors and nurses, all the ones who make a great contribution already. We do not need localisation jobs to be located in Dublin or any of the major cities. With the remote working capability we have and with broadband being rolled out, if software companies want to employ people in Ireland for localisation, let them move around the towns and villages of Ireland and regenerate those areas that are currently dying, with vacant units above shops in many towns and villages. In my constituency, I have seen areas where 90% of the people who have bought the expensive housing were not born in Ireland. They are working in very well-paid jobs and fair play to them for that. However, a garda, a teacher, a nurse or somebody who grew up in the area cannot even afford the affordable housing because every time the baseline price goes up, that person's threshold is moved and he or she needs to apply again. It is heartbreaking for people who are making a fantastic contribution to this country but their wages are not commensurate with top-end software localisation jobs and they lose out as a result. We need to look at our industrial policy in terms of spreading those types of jobs around the country. Ultimately, it is about overall supply.

We are talking about the planning process, speeding up the tendering process, and making more investment in the likes of apprenticeships so that we have people to build those houses. There were some good suggestions made before about setting up a number of factories to build modular or prefabricated housing. As others have said, the State should be the biggest construction company in the country. It does not mean that it has to build it but it can certainly tender for the work to be done. That is a way to move on the supply issue rather than depending on the investors who are only trying to cream off the high-end profits.

I note the Social Democrats amendment and I am inclined to support it.

Rory Hearne (Dublin North-West, Social Democrats)
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I will speak to resolution No.4. In this reduction in the VAT rate, the Government is very clearly throwing us back to an Ireland that we thought we had left behind. It is the Ireland of crony deals and dig-outs for developers and the wealthy. I was wondering if Fianna Fáil and Fine Gael did some séance or bring out a Ouija board to design the budget? Did they conjure up the spirit of Charlie Haughey and ask him what they should do? Did he say they should keep bending the knee and rolling out the red carpet for the big money? The truth is this VAT cut is the same old Fianna Fáil and Fine Gael policy. They did it in forming the Government; they resurrected Michael Lowry. Now they are resurrecting the failed tax policies of the Celtic tiger with tax breaks for developers but now it actually gets even worse.

We are seeing the bankrolling of global vulture funds. That is who will benefit from this tax cut. It will be multibillion global funds and big developers who will get their tax bills cut. Through this reduction in the VAT rate, they will get almost €500 million every year between the VAT cut and the other measure to reduce construction costs. This is being poured into their pockets for what? It is to develop build-to-rent apartments that they will then charge absolutely astronomical rents for, which will now have no rent controls under the Government's new housing measures.

I will give examples of the companies the Government is bankrolling. Kennedy Wilson, a $28 billion US real estate fund with thousands of rental apartments here, will no doubt be developing and buying more. It charges €3,800 for a two-bedroom apartment. IRES REIT is another one that will be developing, buying up and benefiting from these VAT cuts. It charges €2,100 for a one-bedroom apartment. It had a rental income of €83 million last year but who are its major shareholders? Where is this money going? Kennedy Wilson, as I said, is a major US fund. The major shareholders of IRES REIT are the US-based BlackRock and Fidelity, and UK-based asset managers. It is similar for big developers, Glenveigh and Cairn. International funds are creaming huge amounts of money from this.

While one in five of our children is in poverty after the family pays their housing costs, in this budget the Government is going to give €500 million to global and Irish investor funds to build even more extortionate rental apartments that no young people in this country will be able to buy. It is absolutely incredulous that in the coming two or three years, we could be looking at over €2 billion given in tax breaks to these funds to build apartments on which there will be no requirement whatsoever regarding the price they are sold at or the rent that is charged. We are pumping billions of euro of taxpayers' money to build apartments on which there will be no affordability requirement. It is essentially providing a slush fund to these developers and investor funds to charge whatever they want. This is not policy; it is madness.

Fianna Fáil and Fine Gael claim to be the parties of home ownership, but now that is just a figment of their imagination. They have self-deluded themselves into thinking that their policies promote home ownership. Between 2011 and 2022, the number of 25--to-35-year-olds who own their homes has collapsed by 50%.

They have turned our young people into rental fodder for global vulture funds. It is important we point this out because there is a serious lack of critical thinking and engagement in policy in the Government, the Department of housing and the Department of Finance regarding this measure. There is no guarantee whatsoever that new units will be built or that they will have affordability requirements. They will be able to charge whatever price and rent they want.

What choice is the Government giving young people in this country? It is giving them the choice to either hand over the majority of their hard-earned money to a corporate landlord, stay stuck in their childhood box rooms unable to start their independent lives, or else emigrate. Fianna Fáil and Fine Gael are telling young people in this country to emigrate because they are not going to offer them a home.

The only big initiative the Government is doing on housing in this budget is to bankroll investor funds and developers. The Government is so devoid of new ideas, vision or ambition. The Taoiseach said he was going to make difficult housing policy decisions, but the difficult decision would have been to pump money into State construction to actually deliver homes that would bring down rents and house prices. Instead, the Government is doing nothing in that regard. It is very clearly captured by the large funds and that is what this VAT change is about. The Government is about blaming everyone else except itself. It needs to take responsibility. This VAT cut will not deliver anything except more expensive rental housing.

Ruth Coppinger (Dublin West, Solidarity)
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In the old days, housing figures came out and we took them to be public housing figures. I find it actually laughable in recent years the way the housing figures encompass everything that is built in the country and the Government takes the credit. I see this as the Government’s drive to reach the housing targets it missed by pumping money into private developers and construction companies in a desperate means to get the figures up.

What is the total cost of all of these measures? While I have seen a figure for one of the measures, I have not seen a figure for the VAT cost. What is the nature of the apartments that will be built? They could be extremely expensive and luxurious apartments. Is the Government putting any rules or stipulations whatsoever in place, or is it just lashing some money down?

As has been said, these apartments will most likely be rented out at completely unaffordable rates, just like all of the apartment complexes that every single one of us see flying up in Ashtown and Ongar, which tend to be eight or nine storeys high with a big “U” sign and rented out by vulture funds. They will do nothing to make the life of anyone who is trying to get a home and struggling in the private rental sector easier. The only thing the Government did for those people was to give them a €200 credit per year.

Did the Government ever give any consideration to giving this money directly to councils to build on their own vacant land? Does the Government have figures for the acreage of council land available? To give the Minister an example, one I have raised here many times before, there is a vacant strategic land bank for the whole of Dublin owned by Fingal County Council stretching for miles, with beautiful forestry and rivers situated near a rail line. The council said it could build 7,000 social and affordable homes on that land. That is 7,000 homes in Dublin right now, which would be a significant contribution to reducing the housing crisis in west and north Dublin, but what is the Government doing? Not a brass farthing has been given to develop that land bank; there has been nothing. A question was put in by one of our councillors recently about this land. The answer came back that no money had been asked for or given. It is not like there is a rush or anything. It is not like there is an emergency or people in desperation.

This really is neoliberalism taken to its nth degree. The Government has just given up any semblance of building public housing. I checked the figures for the third quarter of 2024 where the words “housing options” and “housing supports” come up again and again. The Government uses measures like HAP, which is the most expensive and wasteful way to house someone that one could think of, and other means of leasing and so on from private developers.

This is shameful. We are now into – and it should be marked - 12 years of successive Fianna Fáil and Fine Gael Governments that have been content to let housing misery fester in this country. Imagine that for 12 years. People who were being made homeless contacted me back in 2013 and it has not stopped since. This is a social ill that the Government has been happy to allow. Today, the big two features of the budget are for the fast food industry, which is getting a huge tax break, and the developers. There is nothing for the disabled. There is no hope for people on the housing lists or for those emigrating. This really is neoliberalism writ large. The Minister for housing, Deputy Browne, should be here to answer some of these questions.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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No one is offering. Does the Minister wish to respond?

Helen McEntee (Meath East, Fine Gael)
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I thank the Deputies. This financial resolution provides for the reduction of the VAT rate applied to the sale of new apartments to 9% from 8 October 2025. It will apply to the 31 December 2030, that is, for the next five years. Its estimated cost for the first year is €250 million.

The Government is committed to the delivery of more than 300,000 new homes by 2023. It is, of course, apparent that apartments need to be a significant part of that delivery. This is about ensuring that we have a greater delivery of not just apartments but cost-rental, affordable and private homes. To say that nothing is being spent or that there has been no focus on housing in this budget other than this specific measure simply is not correct.

I will outline matters again. There is an allocation of €11.3 billion to the Department of Housing, Local Government and Heritage for 2026. A total of €7.2 billion of that allocation is in capital funding, which will include €2.9 billion to support the delivery of thousands of new build social homes and second-hand acquisitions; €1.2 billion for the starter homes programme to deliver thousands of starter homes through a range of affordability supports, alongside the help-to-buy initiative; €300 million to support the regeneration of our towns and urban areas through the urban regeneration development fund; €205 million for a new housing activation infrastructure fund to support the work of the new housing activation office; €140 million to retrofit further homes; and €130 million to fund up to 17,000 grants to adapt the homes of older people and people with disabilities, which is in addition to the significant €628 million increase in disability funding this year. On top of those measures, there is then €2 billion to support 100,000 households through the existing different schemes, such as the rental accommodation and social housing current expenditure schemes. It is important to continue those schemes.

We need to increase our focus on building apartment complexes. A total of 50% of our employment or growth is going to happen across five cities, namely, Dublin, Cork, Waterford, Limerick and Galway. A total of 40% of our development will happen in brownfield sites in the coming years. We need to ensure that we are doing more when it comes to apartment complexes. Construction in this area is not moving so we have to ensure we are putting in place measures that will actually move and ensure we have delivery.

Looking solely at Dublin, of the last 44,500 units with planning permission, 90% of those, or approximately 40,000, are apartments that have not yet commenced. Overall, some 70,000 apartments with planning permission have not gone anywhere. That is not just in the past five or six months. Rather, it goes back as far as 2022 and before. We need to ensure that we are doing – and this is just one measure – what we can to activate. It is very clear there is a viability gap between apartments and houses in Ireland. That is something that has been said time and again. The purpose of this measure, therefore, is to reduce that gap to achieve wider policy goals as we have outlined, many of which are the national planning framework, such as increasing density and recognising demographic and societal changes. All of this can be delivered through more housing and apartment delivery.

In terms of the guidelines and how they will be implemented, Revenue is working to develop and implement the different guidelines. Essentially, this is aimed at incentivising builders to build additional apartments. This will stretch over a number of different years.

With regard to the types of apartments, this measure will apply where a property is at least two storeys high and has least three units. It will not extend to duplexes or single-storey developments. It will extend to student accommodation as long as it meets the criteria for apartments, that is, multistorey accommodation with at least three units. It will not apply to apartments built over a business or apartments constructed as part of a hotel. Overall, it will fall within the definition from high-value accommodation to apartments built for social housing purposes and will cover all sizes of apartments.

9 o’clock

All the detail is being worked through. The guidelines to implement this are being developed by Revenue. This can be applied to by and can be sold on to any individual or group, be it a housing body, private or otherwise. This is about making sure we construct more apartments. In the past number of years, that has not been happening. There is a viability gap there and the aim behind this is to address it. It is one measure among a number we are introducing to increase the overall construction of affordable, social and private apartments and homes for people across the country.

Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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The Minister is absolutely correct. There are planning permissions for 40,000 apartments that have not yet been commenced. The Minister claimed that this measure is to activate those permissions. Why then provide a VAT reduction in respect of apartments under construction? All the expenditure being provided for this measure next year is for apartments that are currently being built. It takes approximately two years to build out an apartment development. That means €250 million of this money for next year will go on apartments which are under constructions and for which there already are buyers. In many cases, because they have forward purchase agreements, the prices have been fixed. The Government will then spend €350 million on it next year, and a large proportion of that money will also go on apartments that are currently under construction. Those apartments are being built. If the Government did not introduce this measure, those apartments would be built and bought by funds or AHBs. It is simply not the case that next year's expenditure or the bulk of that for the year after is about activation.

At a press conference earlier, the Minister, Deputy Browne, was asked why that is the case. Why, for example, did he not link this measure to a commencement date like tomorrow? I still think it would be a bad policy but it would mean the Government would not be wasting €250 million next year. What did the Minister say? He said he could not do that because it would delay the sale. What utter nonsense. If there was a commencement date of tomorrow, anything commenced before that would not have its sale delayed and the State would not be blowing hundreds of millions of euro that could be spent on the delivery of genuinely affordable homes for working people.

I take it from her remarks that the Minister, Deputy McEntee, is confirming that, next year and the year after, the apartments bought by AHBs and local authorities under turnkey agreements for social or cost rental will effectively be captured by this. That means the State will pay an additional €20,000 to €25,000 per unit next year and the year after on top of the price already committed to through the forward purchase agreements. That is utterly bizarre.

Let us deal with viability. The Minister, Deputy Browne, gave some figures on viability at his press conference. I do not necessarily accept their veracity but he claims that suburban apartments have a viability gap of €114,000 per unit and that inner-urban apartments have a viability gap of €156,000. That is the gap that has to be closed. How in God's name will a VAT reduction of €20,000 close either of those? The maths do not add up.

I do not know which Deputy before me made this point, but it was a point well worth making. This was not a commitment in the programme for Government, unlike, for example, the promise to progressively increase the renter's tax credit, a promise that was broken today. It is a specific demand of a specific lobbyist who came into Government Buildings and requested it. The Minister is right this is one of three measures. That is the one point on which I will agree with her. The Government is allowing apartment developers to dramatically reduce the size of and the light and storage options in apartments and to dramatically reduce the quality of the lives of those who occupy them. It is also about to introduce legislation that will allow not only for those apartments that come on stream to come in at the top of the market but also to reset to full market value every six years. Hines has told us its turnover of tenants is 25% every year. This means that means in exchange for an extra €25,000 going into a developer's pocket, that developer will build a volume - we do not know how many, but I agree with colleagues that it will not be a large volume - of smaller, darker, far more expensive homes. If anybody tells me that is a credible solution to the housing crisis, they clearly do not understand what is happening.

The worst thing of all - I say this with the greatest of respect for the Minister opposite and the people in her constituency who cannot get affordable homes - is that the only apartments which may arise from this cocktail of measures will be very expensive ones in limited areas of Dublin, namely the Docklands and Sandyford, for example, in which very high rents of €3,000-plus obtain. Nobody will be building anything in the Minister's constituency on the basis of these measures because that is not what those in the institutional investment and apartment developer community are interested in. They want a small amount of expensive, high-end and high-density apartments in Dublin, and maybe the Docklands area of Cork. Every other county in the State will get nothing.

The Government did not increase the social housing targets beyond previous commitments. It did not increase the affordable cost rental or purchase targets in order to fix those schemes and make them genuinely affordable. It is doing nothing to ensure an adequate supply of good-quality, private homes in every county in the State for working people to purchase by supporting and activating the small and medium-size builder-developer sector.

Michael O'Flynn, one of the most respected builder-developers in the State, has stated over and over that he does not want tax breaks. He wants a viable business model to build homes for working people to buy. That is not in this budget. This will not work. The only beneficiaries are very large developers. I do not understand how somebody can defend the indefensible policy in front of us today.

Conor Sheehan (Limerick City, Labour)
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I thank the Minister for her response. The increase in the cost of developing apartments is complex. We have had multiple interest rate rises and still have not seen the evidence base for these VAT cuts. I would really like to see the publication of the advice from the Department of Finance on this. It is a major transfer of wealth to institutional investors and property developers, with little or no clawback by the State. It is not being combined with use-it-or-lose-it clauses around planning permission or anything to deal with land speculation or land hoarding, which is a big issue in the context of uncommenced apartment developments. This simply will not work. We will be back here again to deal with it, if not next year then in two year's time.

Cian O'Callaghan (Dublin Bay North, Social Democrats)
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It is absolutely extraordinary that this measure is being brought in for apartments currently under construction, some of which are near completion. In the context of many of those apartments, the prices are locked in. Those purchasing them - approved housing bodies or whomever - have already agreed a price. This will create a windfall profit for developers, and that money will go straight into their back pockets.

There is no need for a resolution like this now. It could have been designed in another way. I do not think it would work for activation anyway. If it was a genuine measure about activation, however, it should have been designed differently. This measure that will be voted through shortly by Government will give some individuals a windfall profit that will go into their back pockets, with no good policy outcome for the public. In fact, it is costing us in terms of the VAT cut and, potentially, it will cost the State because approved housing bodies and others buyers have already locked in prices. This is a really rotten measure in terms of value for money and the public interest.

Deputies:

Hear, hear.

Rory Hearne (Dublin North-West, Social Democrats)
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I want to back up my colleague and others who have said that this is incredible. The Minister needs to explain the basis on which the decision was made to hand money over to developers and investor funds that are already building these homes. What is happening is illogical. What is the rationale behind it? We need an explanation. This involves significant amounts of public money. Is it another example of the Government wasting public money with no consideration? It is in the same line as the decisions made by the new Minister for housing when he got rid of the tenant in situ scheme. He had to row back somewhat on that when he realised what he was doing was pushing people into homelessness. This is another example of an ill-thought-out policy that is clearly just responding to lobbyists.

I have a direct question for the Minister. Under the croí cónaithe cities scheme, developers can get a subsidy of up to €140,000 per apartment.

Will the Minister clarify for us tonight that this VAT reduction is on top of that?

Conor Sheehan (Limerick City, Labour)
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It is.

Rory Hearne (Dublin North-West, Social Democrats)
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Potentially, those building and developing apartments, and let us say an apartment is potentially going for sale for €600,000 or €800,000, are getting €160,000 or €170,000 State subsidy per apartment. Will the Minister clarify that please?

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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That is a good question.

Helen McEntee (Meath East, Fine Gael)
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To respond to a number of points, I have never seen a Government implement in full its programme for Government in one year. Deputies need to acknowledge that we have four years hopefully ahead of us to implement many more measures-----

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I have never seen a Government throw it out before the first budget.

Helen McEntee (Meath East, Fine Gael)
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-----and to activate more housing nor have I ever seen a Government that was not allowed to do more than the programme for Government. We may stray beyond the programme for Government from time to time, so be warned. Meath County Council has surpassed its housing targets with the support of Government. We will work with it to do even more. Coming from a county with a growing young population, just like the Deputy, I want to ensure that constituents have access to affordable homes and that they can buy, rent and own. On the timelines, the advice that I have been given is that there were legal issues around the overall timeline, but also the potential implications to stall the markets. If we set a future date, whether it is tomorrow or in six months, the further out it is we prevent the commencement of property. There were legal issues around defining the commencement date and the timing. That is the information I have been given. This is on top of any of the other measures that have been put in place. I have to stress again that this about activating the tens of thousands of planning permissions that have not yet started and have not yet been acted on and making sure that we can bring far more apartment complexes into the overall context for people.

Rory Hearne (Dublin North-West, Social Democrats)
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Will the Minister answer the question?

Helen McEntee (Meath East, Fine Gael)
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I have answered it. It is in addition to any other schemes.