Jim Walsh (Fianna Fail) | Oireachtas source

I welcome the Minister of State, Deputy Tom Hayes, to the House. My simple political philosophy is that people are entitled to live without interference. That is the reason I believe abortion is such an evil. Between 20% and 25% of unborn babies are killed in their mothers' wombs before they get the chance to see the light of day. I also believe youngsters have a right to an education that gears them for life and gives them an opportunity in life. By and large, the State has a good record in that area.

I also believe people are entitled to employment. By and large, the State has done reasonably well in that regard also, although I am aware that the recent hiatus has caused problems in that area. People are also entitled to housing. Unfortunately, however, we have lost this as a major objective. During the decades I served on local authorities, I used to take great pride in the ingenuity and innovative measures that were introduced to assist people who were struggling to buy a house. Systems were introduced to enable such people to buy a home and we also provided for people who were not in a position to purchase. Unfortunately, this approach is no longer taken.

Some of the steps taken in the boom years added to the cost of building. These included decisions by the Department of the Environment, Community and Local Government to strengthen building regulations and the introduction of development levies. Levies may have been fine when substantial profits were being made on property but they are having counter-cyclical effects. I could never understand the logic of removing mortgage interest relief. I have argued, even in my party, that people who speculatively bought a property to rent out were allowed to claim mortgage interest relief, whereas those who bought a house to provide for their families were denied this option. I was fortunate to benefit from mortgage interest relief in the past. Denying this option to others defies logic.

Affordability is the key to the Bill. Having listened to the Minister of State, Deputy English, I wonder about the soundness of the advice he has received from his officials. People believe politics has failed but, unfortunately, the public service has failed miserably over the past 15 or 20 years. A dumbing down has fed into the political system which no longer displays the type of ingenuity and innovation it showed previously. In 2001 or 2002, I argued the case with the Minister for the Environment, Heritage and Local Government for re-introducing certificates of reasonable value, which were the order of the day in the 1970s and early 1980s. These certificates prescribed the value of homes in individual areas and anyone selling a house had to have one. The then Minister told me that the appetite for housing was such that a certificate of reasonable value would not be effective. I told him they were a simple remedy as opposed to the approach of commissioning a report from Peter Bacon who adopted an economic line that homes were economic units and the principle of supply and demand, to which I subscribe, should apply. This principle would not and did not work in housing. Certificates of reasonable value could have been linked to lending. Regulations or laws could have been introduced prohibiting the banks from lending in excess of the value provided for on the certificate of reasonable value or, where they chose to do so, the excess would not be recoverable or an actionable debt due by the bank's clients.

We had low rise mortgage schemes in the 1970s when the economy was in a much worse state than it is today. These helped many people I know, particular in local authority housing, who were able to access mortgages from the county council and buy their homes. They were given a ten-year, low rise mortgage, which provided for a graduated increase in repayments. I believe they paid 10% in the first year. It is regrettable that public officials and the political system are not making any similar proposals today.

The National Building Agency was in place at that time and built houses competitively. This Bill provides an opportunity to re-examine that type of system. The first house I bought was from the National Building Agency because it made homes available to people in certain categories of employment. I also obtained a mortgage from the agency. We could learn much from or past experience, without looking at other countries. The model provided for in the Bill looks at Canada, Denmark and, in particular, the Ginnie Mae model in the United States. The Government's failure to see merit in the proposal is indicative of the laissez-faireor lazy approach to tackling the current crisis. As a previous speaker noted, people on very good incomes, including married couples in which both partners are working and earning five or six figure salaries, are finding it difficult, if not impossible, to borrow and purchase homes in Dublin. That issue must be addressed as it cannot be allowed to continue.The shared responsibility mortgage, SRM, is part of this Bill, and may or may not have been looked at by the officials. It works in exactly the same way as the fixed-rate mortgage with a couple of important differences. First there is a downside protection for the home owner based on his or her local price index. A number of market participants produce local house price indices and the Government can monitor and certify the production of such a house price index on which the downside protection of an SRM can be contracted. SRMs have more to do with insuring the value of the house rather than its affordability and help avoid negative equity. I will give an example; a house worth €100,000 is purchased for €80,000 over a 30-year mortgage with a loan of 5%. The home owner would put down the current requirement of 20% - a percentage I believe should be looked at as it is creating a problem for many people - and the annual mortgage would amount to €5,204. So if that index was to fall by 10% it would mean that the repayment for that year would fall by 10% of the €5,204, which is a reduction of €520 in the year. This could be made up at the end by either paying it back through the capital gain one might make on selling the house, or by extending the mortgage term. These are the types of innovative initiatives we need if we are to really tackle this issue.

I appeal to the Minister, to the other side of the House and in particular to my Seanad colleague from Wexford, that if this is rejected by the House it can only lead to the conclusion that the Government is simply not interested in housing or that it is just taking advice from its officials, which is wrong. Allowing this Bill to go to Committee Stage is a litmus test. Even it the Bill is not accepted on Committee Stage, by working through it on that Stage good suggestions and ideas will come from that. We do need debate on the area of housing. It is a fundamental flaw and a legacy of this era will be that we failed to address the real issues affecting people with regard to the fundamental issue of housing. We have been seen to take the side of bankers and banks. The Personal Insolvency (Amendment) Bill 2015 was totally deficient-----