John Paul Phelan (Fine Gael)

I welcome the Minister back to the House and congratulate him on his extra appointment as Tánaiste. We have had a number of discussions about Finance Bills already this year and the House has had a number of financial debates.

The Bill, as proposed, is very disappointing and falls far short of any meaningful reform of stamp duty. The Minister attempted to explain why it is not a full reform of that tax. Over the past ten years, during the tenure of Fianna Fáil and its friends in the Progressive Democrats and a couple of Independent Deputies in its first five years in office, we have witnessed an extraordinary change in the nature of the property market and in the role stamp duty has played in that market. Stamp duty was never intended to be the major revenue generator it has become over the past ten years. The way in which stamp duty is paid is very inequitable and I regret the Government has not used this opportunity to alter significantly the way in which the stamp duty regime is enforced. We have a very complicated system with seven rates, and this Bill could usefully have been used to simplify the stamp duty code.

However, most galling is to hear Government speakers and the Minister continually talk about all they are doing for first-time buyers. In the eight years I have spent in politics as a county councillor and a Member of the Seanad, I have witnessed persistent efforts by Fianna Fáil and its friends in the construction sector to put housing beyond the reach of my generation. The legacy of the past ten years is that many of my friends cannot afford to buy a house. Two or three people, including people with whom I went to college in Waterford, come together to buy a house in Dublin. If that is affordability and the result of the Government's effort to try to help first-time buyers, then it is pretty miserable. This Bill, as proposed and as discussed in the other House last week, is another miserable attempt to try to reform the property tax sector and I cannot support it.

We had a full discussion on stamp duty when the previous Finance Bill was debated in the House and Senator Cox threw a bit of a wobbler, so to speak, that day and attempted to vote against the Government, but that did not happen. On that day, on a previous day in the other House and at budget time, the Minister outlined his stringent objections to any reform of stamp duty. Senator Norris referred to ethics earlier and it is nauseating in the extreme to witness such a U-turn. The Government probably took note of focus group reports and of God knows what else and realised stamp duty was a major issue in the election. However, it certainly sends out a very bad message politically when the deputy prime minister of a country, who was firmly opposed to stamp duty reform six months ago and who expounded in this House and in the other one why there was no necessity to reform it, does a complete volte face and attempts to reform the stamp duty sector. It falls far short of any meaningful reform, is in direct contradiction to what the Minister proposed previously and does no service to politics. The Government did a U-turn during the general election campaign and this Bill falls far short of any meaningful reform of stamp duty.

I would like the Minister to refer the following case when summing up. I have been presented with the case of a first-time buyer who recently purchased a very expensive site. Sites for new houses have become very expensive over the past ten years. Is somebody in such a situation exempt from stamp duty on the cost of the purchase of this site as well as first-time buyers purchasing a new or second-hand home? I ask the Minister to address those circumstances.

The Minister referred to the importance of the construction sector to the economy, which is the only defence of his U-turn on stamp duty over the course of the past couple of months. However, we have become far too dependent on the construction sector. Across large areas of rural Ireland where agriculture is on the decline, construction is the most significant source of employment. We produced 95,000 housing units last year but are projected to produce only 65,000 units this year. Despite the fact that the workforce in the sector cannot withstand a reduction of 30,000 units, the Government has taken no significant action to ameliorate our reliance on the construction sector for employment. I urge the Minister to put his energies in his new term of office into ensuring we do not rely so significantly on the construction industry into the future.

The Bill is also disappointing in its failure to introduce a sliding scale for stamp duty payments. People will still be required to pay stamp duty on the full cost of purchase rather than at a marginal rate above the thresholds. It is an inequitable requirement. It is also regrettable that the Bill fails to facilitate the regeneration of older, more established communities. Older people in large homes in communities which are well served by schools and hospitals may wish to trade down, but will not be encouraged to do so by the Bill. If they were facilitated to buy smaller homes, the effect would be to free up valuable property in more established communities in our cities.

I am very disappointed with the Bill despite the Minister's contention that it deals specifically with the promise set out in the programme for Government. While it achieves that end, stamp duty is a policy area which remains ripe for significant reform. The Minister's proposals represent mere tinkering around the edges. I am therefore unable to support the Bill as it stands.