Joe O'Toole (Independent)

I thank the Minister for his reply on Second Stage. It was a very interesting outline of the economy as he saw it and it is very important for us in this House to hear these things. I value it. I must always make the point to Ministers that we are on the non-Government side, which is not the Opposition side. These are the Independent benches and we look at the issues as they appear before us. I agree with the Minister's critique on phasing the changeover over three years, as it would only pervert the market. I was the only Member who argued some years ago that the first-time buyer's grant did nothing for first-time buyers. I did not join in the general chorus when the grant was changed. I again welcome the revolutionary proposal to backdate as far as seven years mortgage interest relief.

The Minister claims the buyer will buy to his or her ability. In other words, he or she will examine the overall cost of the house, the purchase price and taxes. He also made the point that the abolition of stamp duty will not necessarily reduce the price of a house as it is factored into it. That is a fair argument. Anyone purchasing a house would factor in the stamp duty when seeking funds.

However, I used that argument previously with various Ministers who did not accept it. For example, I had a long-running argument with the Government on the lack of insulation standards in newly-built houses. The Government's argument was that if insulation standards were introduced, as required by the EU in 1998, it would have added €1,000 to house prices, a large imposition on buyers. My point is that it would not because people would pay for what they can afford and that is the way the market would adjust prices. The logic behind removing stamp duty for first-time buyers is more or less the same as that for better insulation standards putting up house prices.

The Minister compared house prices from last year to this year but did not factor in the differences made with the removal of stamp duty. Taking the Minister's argument that people pay what they reckon is the market value, including the stamp duty, prices have dropped significantly from last year. Last year a house marketed at €390,000 would have cost, with stamp duty applied, €430,000. With the removal of stamp duty for first-time buyers, the house can only be marketed at €390,000. Applying the Minister's argument that people will spend what they can afford, the stamp duty factor must be considered in making a real-time adjustment in house prices between this and last year.

The Minister rightly referred to the Fine Gael Party's proposal as non-progressive. The Minister's proposal is equally non-progressive. While I agree with the general thrust of the Bill's proposals, a progressive tax is one that hits people if they are spending more. This is not a progressive tax.

Will the Minister consider the supply and demand and population factor? What is happening in the private rental market is similar to what happened prior to achieving 80,000 housing units being built annually. Before that, rents were higher than they are currently. The price of apartment rentals in Dublin was higher in 2001 than at present. Within the past seven to eight months rentals have again approached that level.

I should like to hear the Minister's views on this, but I do not believe the housing market will collapse. It cannot collapse. I am looking at an increased population, higher rental costs and a reduction from 80,000 houses per year to what the banks suggest will be around 55,000 or 60,000. I agree with the Minister that the market cannot collapse on that basis.

However, the point made by Fine Gael and by the Minister is about our over-reliance on construction. That is an enormous fear and I should like to hear more from the Minister, perhaps not today, on how this may be counteracted. As he said, the proportion of GDP or GNP dependent on construction is far in excess of what we would be comfortable. We need to hear about plans beyond that. The ESRI is talking about exports of services as one way of dealing with the problem and that is important, as is the issue of retraining.

I agree we should not talk down the economy and I am not one to do that. That does not serve the interests of anyone. The Minister then referred to the budgetary dates. That was the point of my intervention on Second Stage and is the reason for my two amendments proposing to change the date. I should like to again hear the Minister on this. I accept his point that the budgetary changes he announces in December tend to be introduced on 1 January unless some come into force immediately or are to be introduced later. I can also understand mortgage interest relief being back-dated seven years. Assuming I accept all the Minister's arguments relative to the Fine Gael position, why, if he was prepared to move the date back, as he did, and it finally ended up as 1 April, could it not have been scheduled for 1 January? How bad would that have been?

People feel very sore about this. Those people I spoke to feel hard done by. It is different to the "hard done by" that I have had to defend a million times, where people are caught by a date. People are always being caught by a date. In another life, when I was negotiating salary increases which did not come into play until two or three months after somebody might have retired, he or she might ask why they might not have been introduced somewhat earlier. No matter what changes are brought in, people will always be compromised as regards dates.

However, this is different. It is arbitrary when it need not be. It could have been made to fall in line with budgetary requirements. It could have been put into the tax year, on which everything is based. People pay their taxes on the basis of the whole tax year and this, as a tax, is part of the current tax year.

Would the Minister not consider backdating this to 1 January? If he cannot do it today, can he give me some succour in this? Is it an issue that he might consider addressing in his Budget Statement at the end of the year? Is he prepared to look at the cost of this to the State were it to be retrospective to 1 January? I believe it would remove a good deal of hardship for many people. During that period it was probably factored into the prices, so it is not like before 1 January, before the Budget Statement or before the time when the debate on this whole area began, where people knew they would have to pay stamp duty.

Those caught before that debate started do not have the same argument as those caught during the debate for the reasons the Minister gave. He claimed the Opposition had created uncertainty. It was not only the Opposition but the leader of the other party in Government, former Deputy Michael McDowell, who created the uncertainty, in his speech in Malahide. He told us the Government did not need the €3 billion in revenue and that was a major part of the debate. There was great uncertainty but the Minister stood up on budget day and clarified the matter with authority and certainty. His speech was strong and was made with conviction and, having listened to it, I noted it would allow us to know where we were going. I accept I may have misinterpreted the Minister, but it was probably because of his conviction, authority, delivery and certainly that people said he would not move on the issue. The media stated he had taken a strong position on it. Regardless of whether the interpretation was right or wrong, the Minister made no attempt to change it and the interpreters acted in good faith. I ask the Minister to respond in a human way to the problem created for a small number of people as a result of not backdating the measure from 31 March to 1 January. Is it possible for him to reconsider it?