Jim Walsh (Fianna Fail)

I remind Senator Ryan that the party which brought in Part V, which was probably the biggest imposition on developers that I have seen in legislation or, indeed, in taxation, came about through Fianna Fáil and the last Government. Therefore, his point does not stand up to any great scrutiny.

The Minister of State, Deputy Noel Ahern, outlined the number of house completions in 2005 at 81,000. The rate of house completions is four times that in the rest of our EU partners, which is a phenomenal output. I recall the time when we stated there would be a massive improvement if we could increase the output to in excess of 50,000 or 55,000. It is significant that we have reached 81,000 house completions.

Undoubtedly, it must be recognised that there is a problem of affordability. The Government has striven to tackle this issue by increasing the output. This, to some extent, has addressed the issue. It has not addressed it completely and we must recognise that.

As the Minister of State, Deputy Noel Ahern, correctly stated, this matter is a product of the economic success that we have been enjoying — immigration, more people at work and the demographic changes of people moving into the age bracket where they are looking to purchase a home. Those issues are positive. We should recognise them as such and then attempt to deal with the difficulties to which some of that success gives rise.

I do not agree with the ideological argument on controlling the price of building land in the motion from the Labour Party and the Fine Gael Party. That is the same type of argument we heard when an innovative decision was made by the former Minister for Finance, Mr. Charlie McCreevy, to reduce capital gains tax from 40% to 20%, which released large parcels of land which would not otherwise have been released for development and which significantly enhanced the Exchequer returns. While those who were hung up on these historic ideological philosophies view such measures as negative, in fact, the effect of the measure to which I refer has been very positive.

Many issues arose in the past about the controversies over rezoning land. There were councillors of certain political parties who made a virtue of opposing all rezoning. They contributed enormously to the current problem because insufficient land was zoned to meet the housing demand, even in the 1970s and 1980s, and it certainly did not meet the growing demand that appeared in the 1990s.

I very much welcome the investment now being made in servicing land. That is really the way to meeting the growing demand for housing which will exist for a considerable number of years to come. There are those who predict that our population will grow to in excess of 5 million by 2015 or 2020, and we must now be putting in place the infrastructure which will be able to deal with the housing requirements of the predicted population.

One issue that concerns me somewhat is that to some extent Ireland's GDP is becoming attached to the construction industry, which is notoriously cyclical.

The scale of development is now having a greater impact on GDP. Any change in the cycle for whatever reason could impact on the economy and we must be mindful of this.

The cost of housing is probably reflected in inflation, particularly with rising interest rates, and in wage demands, which all affect competitiveness. All these issues are connected to our overall economic well-being. I welcome a debate on this area to ensure the issue is managed carefully and that we avoid some of the pitfalls that have occurred in other countries as a consequence of negative equity, to which some Members referred. While no economist has predicted this will happen, nonetheless we should be mindful of the dangers and risks in this area.

I very much welcome the Minister of State's commitment that we will not return to the policy pursued in the 1960s of providing cheaper houses. What we need is better value in the housing market, not cheap houses. The cost of subsequently having to renovate and modernise substandard housing is something we should avoid.

The Department is seeking to increase housing density in rural areas. From a social perspective it is important to have sufficient space. Ultimately, we will pay a price if we confine people in small spaces with inadequate play areas for children.

Although I supported the introduction of Part V, I would welcome a review of it. A certain amount of housing has resulted from it but we should examine to what extent it is impacting on housing inflation, particularly for first-time buyers. We must ensure our policies are geared towards facilitating people with reasonable incomes to access housing.

In the past, a low-rise mortgage scheme was developed and we should consider reintroducing it. I do not remember in detail how it operated but after a local authority approved a loan, one gradually paid an increased amount over a 12-year period until one was eventually paying full interest. It was feasible to do this as one's income had increased in the meantime.

The shared ownership scheme should be revisited. The price of the portion owned by the local authority should remain static with interest being paid on it and, subsequently, people should be allowed to buy their homes from the local authority at the original price. The fact that the price escalates has led to the scheme not realising its full potential.