James Bannon (Fine Gael)

I welcome the Minister of State to the House and second the motion. I thank the Labour Party for giving us the opportunity to discuss this vital issue this evening.

Shelter and access to suitable housing are two of the most basic human needs. This area of social policy, however, is being wilfully neglected and mismanaged by the Government. There is a housing crisis where first-time buyers are now paying an average of €257,000 for their first home, with the average house price rising by 10.2% in the past year. The average house price nationally now stands at €287,664. According to the ESRI-Permanent TSB house price index, the average house price in Dublin is €384,247 — up almost 5% this year alone. The price of a house in 1996, the last full year during which Fine Gael was in office, was approximately €88,000 in Dublin and €75,000 nationally.

Earlier this year, official statistics showed that, on average, first-time buyers are paying over €250,000 for their first home. Young couples are forced to spend almost one third of their combined income on mortgage repayments, up from 29% this time last year, according to an EBS Building Society and DKM economic consultants affordability index.

As Senator McCarthy stated, first-time buyers in Dublin are spending almost €1,700 a month on their mortgage repayments, while those outside the capital are spending more than €1,300, which is equal to 27% of a couple's combined monthly income. To cap it off, interest rates are due to rise tomorrow, with the European Central Bank expected to set the increase at 0.25% or 0.5%. The rungs of the property ladder are getting further and further apart for young first-time buyers. It is a small step for the wealthy but a giant leap for the average young, first-time hopefuls whose dreams are being shattered by the inaction of this uncaring Government.

Affordable housing is virtually non-existent throughout the country, although the need for such provision is acute in certain locations, such as Dublin, Cork and Galway. Some 100,000 individuals are still awaiting local authority houses. The voluntary sector is underdeveloped and there are still enough homeless people in Ireland — more than 5,500 — to fill the Point Depot twice over. This is scandalous at a time when, as the Minister for the Environment, Heritage and Local Government said, the country is awash with money.

The biggest problem facing young people today is the complete and utter failure of the Government to get to grips with the housing crisis. Its approach to rocketing house prices has made Opposition Members of this House sick, as they witness the knock-on effects of the Government's right-wing policies. The average price of a new house stands at €287,000. Some 42,500 people aged over 30 are still living with their families. Some 50,000 families are on local authority waiting lists. Manifesto promises of more houses and a reduction in waiting lists are now a distant memory.

This disaster has been met by a Government response which included the abolition of the first-time buyer's grant, an increase in VAT on housing, and development levies. There have been so many taxes and charges that much of the price paid for a new house goes directly to the Government, particularly in stamp duty. Stamp duty is a regressive tax. It is perceived as a money-making exercise for the Exchequer.

Approximately 108,000 houses are sold in Ireland each year and every day we spend an amazing €85 million on house purchases, which works out at €31.5 billion per annum. Stamp duty made €2 billion last year for the Government from a total tax take of €40 billion. This is a stealth tax aimed at young people — a section of our society that is struggling on an unequal playing field.

The Government has engineered one of the biggest movements of wealth from the young to the middle-aged in our history. It should be thoroughly ashamed of itself. This Government likes to accuse Fine Gael and the Labour Party of having no policies. That is not true, as the Government will know to its cost when the next general election comes.

Fine Gael has already developed a three-point plan for first-time buyers and is committed to implementing it. The plan consists of the following: a house deposit savings scheme, similar to the SSIA scheme, to help young people who are saving for a deposit for a new home; the abolition of stamp duty on second-hand homes up to €400,000 bought by first-time buyers; and the front-loading of mortgage interest relief for first-time buyers to the first seven years of the life of a mortgage, thereby giving first-time buyers help when they most need it. This plan has been established Fine Gael policy for two years but we will not rest there.

We need to examine how the shared ownership scheme operates. Put simply, it is too hard to qualify for that scheme, as it is for the affordable housing scheme which was first announced amid great pomp and ceremony over seven years ago. We must ensure that more people can qualify for these schemes and can afford to make the necessary payments.

We need to deal with the pathetically low eligibility rates for these schemes. Currently, if one earns €37,000 or more one will not qualify. According to the Bank of Ireland, someone earning €37,000 per year qualifies for a mortgage of €175,000 which is nowhere near enough to buy a property in any city and certainly not Dublin, as the Minister of State knows. That has been the case almost since he came into Government.