Sean Barrett (Independent) | Oireachtas source

Go raibh maith agat, a Chathaoirligh. I welcome Minister of State, Deputy Tom Hayes. I thank all the Senators who spoke. It is a pity that the Minister for Finance, Deputy Noonan, was detained elsewhere because he would have found much of interest but I am sure the Ministers of State, Deputies Ring and English, will inform him of what happened here today.

All the speakers on every side of the House spoke in favour of what we are trying to do in this Bill. I come from the economics department in Trinity College Dublin which has provided the last two governors of the Central Bank, Governor Honohan and Governor Lane, both decisions which I welcomed. The inspiration for this Bill comes from Princeton and Harvard. I recall Anthony Downs of the Brookings Institution saying that the problem was too much capital in housing. If one puts too much capital into an item with such an inelastic supply then the result would be the appalling kind of price performance we have had from the sector.

As the Minister of State, Deputy Hayes, has responsibility for agriculture he will understand the UK housing charity Shelter when it says that if a four pint carton of milk was indexed to house prices it would cost £10.48. Using the same index link, a chicken would cost £51.00. Ireland has a sector which is seriously dysfunctional. We are trying to bring to the House measures from Harvard and Princeton, from the two learned gentlemen who are the successive Governors of the Central Bank, and from people in the Brookings Institution in order to tackle the problem.

Senator Michael D'Arcy and I know from listening to over 100 hours of evidence at the banking inquiry, that we still have a seriously dysfunctional banking system. I disagree with the following sentence in the Minister of State's reply, "More generally, Ireland has now a well-developed legislative and regulatory framework governing the provision of financial services, including the provision of mortgage credit." The banking inquiry has not yet finalised its summary, conclusions and measures to prevent a recurrence of the crisis but what I saw at the banking inquiry was about 50 people destroying a banking system, destroying a country and putting it into a rescue situation. Those people were in the construction sector. I asked Mr. Michael O'Flynn, one of the construction sector witnesses, how he managed to get houses from two and a half times income up to 12 times income. He told the inquiry that yes they had priced themselves out of the market. I listened to his follow up and if he had any proposals on what to do about it. This Bill is proposing to leverage to mortgage aggregation the ability of the Government to borrow at wholesale rates and to give this, as you will see in section 7 of the Bill, to people buying below average priced houses. That is what we are trying to do in the Bill. I appreciate that the Minister has said that it is a very complex Bill and that there was only a short time available for consideration. I disagree that we have this sorted out as we have a lot to say yet. The Minister of State will be aware of comments made by Mr. Frank Browne in his recent witness statement to the banking inquiry.

There was some praise for the Bill in the Minister of State's speech when he said, "Nevertheless, we can take much from both the proposal and the debate and will consider in the ongoing evaluation of housing and mortgage policy issues." What is lacking from the Minister of State's response is any measure to reform the finance of housing. The Minister of State is sticking with the same banks that Senator D'Arcy and I, along with our colleagues, have been trying to unravel. There is also nothing in the Minister of State's response to deal with how house prices went from two and half times income to 12 times income. If all the other sectors had performed like that, I do not know what condition the economy would have been in. There is no pressure being put on the construction sector which has a huge amount to answer for, as we found. That was what I was trying to deal with in the Bill.

The Bill annoyed some civil servants. Maybe they should look at what has happened to this country while they have been asleep or fiddling during the crucial period leading into the financial crisis; people cannot afford houses. That is why we need to have open minds over there to look at what other people are doing and not to come into the House and be so dismissive. I do not claim wisdom for everything but a lot of effort by my research team and by economists went into this Bill and I am disappointed that the Minister for Finance, Deputy Noonan, is allowing people to come into the House to say that the Bill should be thrown out. I want to keep the debate going and it would be very silly to have it thrown out by people who will be whipped up from wherever they are attending party meetings, when every side of the House has spoken in favour of a measure.

We have to address this issue or we are all going to end up working for financial institutions. One of the figures quoted by Professor Ronan Lyons is that 90% of us will need a subsidy to afford a two-bedroom apartment in Dublin. I know the Government has done great work putting the national finances in order but these are the two sectors that caused the crisis and we have to address it. The ability is there. Just because somebody else thought of it first does not matter, I do not mind and do not have a personal sense of pride like that. However, I would be worried that officials in the Department of Finance have closed minds to anything that they did not think up themselves given that as we found at the inquiry, and it is in the Wright report, 93% of those officials were not qualified at master's level or above in economics. The Bill comes from the same people that gave us two Governors of the Central Bank and from economists at Harvard and Princeton and should not be so casually dismissed as has happened.

I thank Senator Darragh O'Brien for his remarks and Senator Quinn for being my seconder. There ought to be the attractions of lower interest rates. They are available. Senator Mooney gave figures on how our present system translates into massive excess payments for housing. We want to channel our measures into average and below-average house prices and not give money to about 50 people to go off and buy Aristotle Onassis's yacht and so on, and all the things that happened.

The current mortgage system is not working. I have no problem if the Minister takes the best from this Bill and leaves the rest. Maybe the Housing Finance Agency can do more. We have heard Senator Craughwell say that we should not rely on those who brought us to this state. We need low cost funds. Senator Craughwell said to the Minister of State, Deputy Ring, that this Bill, "would be music to the ears of the citizens of Ireland". We have a hangover from this.

I welcome Senator Reilly's support. It is probable that not more than 50 people borrowed this country into bankruptcy. The Bill is a measure to prevent them ever doing that again. I welcome also the support for the Bill from Senators D'Arcy and Hayden, two important Members on the Government benches in this House. They should not be whipped under any threats into voting the Bill down.They are both valuable Members of the Oireachtas and have much to contribute.

We ought to look at the income ratios and all that has been going wrong in this sector. Senator Ó Domhnaill spoke about a garda and a nurse not being able to afford a house. We also need to examine the independence of the proposed corporation.

We like home ownership in this country. Sweden is moving towards it. Let us keep the measure alive. It is designed with the best will in the world towards every Member of this House. I would like to report progress, if that is possible.