Sean Barrett (Independent) | Oireachtas source

I welcome the Minister of State to the House. With regard to amendment No. 102, which the Minister of State, Senator Aideen Hayden and Senator Kathryn Reilly referred to, I believe that we must ask why this sector is way out of line with consumer price inflation. As legislators, we have to put the pressure back on the appropriate party. At the banking inquiry, we asked Michael O'Flynn, a leading developer who appeared as a witness, what happened here. We made the point that we used to be able to have housing provided for two and a half times a person's income, but then the multiple went as high as 12. Sixty or so developers emptied out the banks, and then they emptied out the Exchequer. I am not too sure that relying on these developers and financial institutions can solve this problem. The onus must be put right back on them. There is a small calculation by Shelter, the UK housing charity, which shows that if the price of a chicken had been index-linked to the price of houses since the post-war period, a chicken would now cost well over £50. Why are builders not as efficient as chicken farmers or the producers of any other product that we consume? This question must be asked, and the economist Ronan Lyons has constantly asked it. He said that at their present cost levels the prices of houses have to go up again, because our high-cost builders cannot afford to build at the kind of prices that the rest of society can afford. There is the whole legacy of builders buying up expensive sites in London, Chicago or wherever - and in Dublin as well - and the huge tradition of cost overruns, which has been investigated by the Comptroller and Auditor General and the Committee of Public Accounts.

In that context, the Minister of State will see on the Order Paper for the Seanad the National Mortgage and Housing Corporation Bill 2015, which we tabled last week. The object was to allow the State to use its powers to borrow at low cost and to leverage the production of housing - without the kind of shenanigans that the Irish housing construction sector has seen heretofore, with the dire consequences we all know of - at average and below-average prices to try to deal with the problem of homelessness. We drew the short straw when it went onto the Order Paper, as there was no Minister available from either the Department of the Environment, Community or Local Government or the Department of Finance, so we had three Ministers in the House from different Departments. The item was put forward on the basis that we need new financial institutions and a new construction industry. For starters - this is linked to amendment No. 102 - we should not countenance a situation in which house prices rise to large multiples of earnings and by maxi-multiples of prices elsewhere in the economy. What is wrong with this sector that renders it unable to do what it was able to do five, six or seven decades ago - to produce living accommodation for two and a half times average incomes? It is worthwhile keeping on the agenda the fact that we have had far too many scandals in relation to the construction industry and the bribing of politicians. The sector now has to deliver to the people of this country solutions to homelessness and rapidly rising rents and to conform in some way with the consumer price index. The goal, which the Minister of State has himself referred to, is to leave the construction industry in no doubt as to what we want to happen, and also to leave the financial sector in no doubt as to what we want to happen.

I regret, in the mad financial sphere, that building societies were abolished. They operated as mutual benefit societies. As pointed out by Ms Eithne Tinney, a witness at the banking inquiry, the point of the Educational Building Society was that established teachers who had some money to spare would help the next generation of teachers with housing. We need to get back to that. If credit unions or other bodies can play a role, that is desirable. As Mr. Ronan Lyons repeatedly points out, inflation has gone in the rest of the economy but it is rampant in housing. The rest of us must ask that the sector pull its socks up and deliver some kind of performance so that we can deal with homelessness and house people without extended mortgages of 30 and 40 years. I thank the Minister of State for his forbearance.