Michael Finucane (Fine Gael)

I welcome the Minister of State, Deputy Noel Ahern, to the House. I agree with the spirit of the motion which states that the first-time buyer's grant has been abolished and VAT on house purchases has been increased. As a member of a local authority for the past 18 years, I fully empathise with and support the structure and the good work it does in the housing areas. In many cases the directives emanate from the Department of the Environment, Heritage and Local Government. Many people find this issue difficult, particularly those building a house for the first time. In many cases some of the changes that have taken place in the Administration during the past two years have probably led to the escalating increase in the cost of houses. When the first-time buyer's grant of £3,200 was abolished, the Minister of State's colleagues protested loudly on the airwaves that this was a tragedy and a further deterrent to younger people who were attempting to build a house. That fizzled out and the first-time buyer's grant is gone. Last year VAT on house purchases was increased by an extra 1%. This impacts greatly on house building costs. This year the furore has waged around the various development levies. I recognise local authorities have a duty in regard to development levies and will have a role in deciding where the different projects will be located.

As previous speakers have said, we had an unparalleled boom in the past five years. When I refer back to the achievements in my local authority area there were some major sewerage schemes but also many projects that were not completed, including many small scale sewerage schemes in local communities. As I have said here frequently, this is a contradiction in terms given that workers on local FÁS schemes plant trees, put new footpaths and nice stone walls in place and so on, yet many people are leaving those villages for the simple reason that they cannot build. The most basic infrastructure is a sewerage scheme. The Department of the Environment, Heritage and Local Government would be criticised vis-à-vis the achievements over the five years in the area of the provision of sewerage schemes for many local communities in any county. I would be critical of that, but we did squander it in the provision of infrastructure.

The development levies have been in operation in Limerick County Council during the past year. In the planning permissions granted the levies ranged from €1,200 to €1,800. There appears to be uniformity depending on what local authority administers these charges but there is a wide variation from county to county. The projected charge for one off houses in my local authority is approximately €3,200. The reason for that charge is that the person lives in a rural area. What services does the local authority provide to a person who is building a house in a cul-de-sac? In many cases the local authority does not provide the water because such a person sinks his own well. Given that there are no sewerage facilities, he will probably pay €4,000 to install a biocycle system because planning permission will not be granted in most locations for a septic tank. The biocycle system is another major cost which is added to the overall cost of the house.