Sean Barrett (Independent) | Oireachtas source

I note what the Minister said in his earlier helpful replies. There is a cost and it could be substantial. He is taking steps to control costs.

The scheme will end in two years, which I welcome. It could be expensive and the problem with such tax expenditures is one does not know how much they will cost. If it was more explicit, we would know the cost in advance and could try to estimate its benefits. There is a problem with schemes such as this and stimuli in general because, as the Irish Fiscal Advisory Council, IFAC, pointed out, multiplier effects in the economy are almost zilch because it is so open and there is no way to commence such a scheme without reducing the multiplier effect dramatically because it will leak away in imports. People will buy cars to go to work in and buy holidays out of the proceeds and so forth

There must be a caveat to such proposals. I am glad it will end. It could be expensive and the multiplier effects will be low. Such measures should not be included in the medium-term strategy the Minister will announce soon. They have lobby groups. When robbing Peter to pay Paul, one usually gets Paul's support and, therefore, I am not surprised at all at people supporting it but whether it is worthwhile from the point of view of society as a whole is a question for future deliberations when schemes such as this are proposed in the Department. In this case, the Government is returning to the construction sector, which, goodness knows, got us into enough trouble previously. The benefits will accrue to the householder by either reduced expenses or increased property values. If the money was put into a schools building programme, for instance, the assets would be available to wider society.

There are downsides to this scheme. I acknowledge it has been welcomed and I will not press this recommendation but short-term schemes such as this may not have the beneficial effects the beneficiaries usually claim. I hope this is temporary. Twenty or 30 years ago, the State provided grants to people to put in windows. These schemes seem to exist in departmental files and they keep returning. I hope this has a two-year life because it would be easy for us to overstate its benefits. If there is a black economy, let us tackle it directly rather than trying to induce people to enter the proper economy. I stress the IFAC advice that there is not much of a multiplier effect from these schemes because we long ago declared ourselves in favour of free trade and economic openness. Keynesianism was designed for a large closed economy.