Aideen Hayden (Labour) | Oireachtas source

-----the sacrifices of some of our public and civil servants. In recent weeks we have seen a package of measures designed to combat homelessness and safeguard the one in five families who are renting in our society, together with another package of measures designed to improve housing supply. That follows on from the announcement in last year's budget of resources for one of the largest social housing programmes in the history of this State.

There is no doubt that our country is in recovery. The unemployment figures, more than anything else, are an indication of the extent of this economy's recovery. Tax receipts are almost €3 billion ahead of target and, as the Minister stated recently, Government borrowing will be eliminated in a few years. We expect the debt-to-GDP ratio to fall to 100% by the end of this year, well exceeding expectations. I believe it was Foreign Policymagazine that had Ireland reaching 109% by the end of the year. Again, we are exceeding expectations.

On the specific budget measures, I welcome the tax and universal social charge changes. I am particularly pleased that they target the lowest paid and middle earners. I welcome also section 9, which deals with the extension of the home renovation incentive for an additional year. That has had some success, particularly in improving our housing stock. That it was extended to include landlords renting private rented housing means that those people renting are not forgotten.

Section 15, which introduces tax relief for landlords who make properties available to tenants in receipt of social housing supports, is also to be welcomed because we know it is particularly difficult for tenants receiving rent supplement or housing assistance payments to secure housing. However, I would like to see tax relief extended to all landlords, because it is one area where there is inequality between landlords renting domestic housing and commercial renters. It is only fair to treat landlords equally whether they are in the domestic market or the commercial sector.

Regarding section 32, I welcome the legislation to implement the knowledge development box. It encourages companies to develop intellectual property in this country, which brings in a higher added value for our economy. One of the criticisms of foreign direct investment, FDI, is that we do not get the additional value added that this economy requires.

In terms of my overall concerns, as the country-specific recommendations for Ireland pointed out, the level of private debt in our economy remains worryingly high. I highlight, for example, the mortgage arrears situation. I very much welcome the decision the Government made recently to change the bankruptcy laws, as I believe it will encourage more lenders to reach realistic settlements with people in mortgage arrears.

We continue to struggle with our banking sector. I am particularly concerned about the equity gap in the housing market. There is a 40% equity gap in terms of access to finance for developers, which is forcing developers to secure expensive funding from the venture capital funds. Recent research done for the Society of Chartered Surveyors Ireland identifies access to capital as the factor that most limits development in this country.The additional cost of finance is in the region of €7,000 per unit.

The operations of the banks generally need to be reviewed. Recently, Bank of Ireland attempted to introduce a €700 minimum for over-the-counter withdrawals. That was subsequently withdrawn. However, it is an indication of the activities that banks intend to pursue in order to improve their profitability. The budget represented a missed opportunity to secure movement on variable interest rates. Ours remain the highest in the eurozone. That is unacceptable. They are being paid by people who are in mortgage arrears and negative equity. This issue must be addressed.

Lending to small and medium-sized enterprises, SMEs, was highlighted as a leading challenge. This banking issue needs to be addressed as part of a wider policy, as the banks continue to fall short and there is not likely to be any improvement in the lack of competition in the near future.

The future looks good for Ireland. We have issues that need to be addressed, in particular mortgage arrears, but Europe is proving resilient to the shocks of recent months, for example, those owing to difficulties in China. Energy costs remain low. Of most importance is the fact that the EU has shown itself to be willing to engage in quantitative easing to support the European economy. We might have an additional rate cut soon, which is a matter on which the Minister might be able to comment. It would assist with the mortgage arrears situation.