Alice-Mary Higgins (Independent) | Oireachtas source

Nonetheless, I will speak to my amendment. The other amendments were looking to avoid the mechanism of shared equity. My amendment is a compromise in which I am seeking to insert an internal break mechanism within this portion of the Bill on shared equity. With regard to the idea of shared equity and of the State taking an amount and paying an amount to bridge the gap and allow persons to meet market prices, the concern is this does not deal with the core issue of the intense inflation of market prices.

The prices in Ireland on housing and their increase are not natural or appropriate and are absolutely out of line with any other areas of increase in life. Wages are not going up to match this. No other provisions are going up. It is in an upward inflationary spiral. The concern is the shared equity component and proposals under this Bill will contribute to that increased inflation and it will become a matter, not that we are allowing people to meet the prices, but are allowing prices to rise because the gap is being filled and guaranteed. That is not my opinion, that is the opinion of almost every economic expert who has looked at this issue.

The Economic and Social Research Institute, ESRI, has highlighted there is a danger of an inflationary impact. The Central Bank has highlighted this can have an inflationary impact, increasing the price of houses and driving them up. Robert Watt, in his former capacity with the Department of Public Expenditure and Reform, has highlighted this could lead to the inflation of house prices. We are getting red flags from every possible quarter about the impact of this measure. I am not doubting the need people have in terms of housing and there is an intent to meet it, but the question is whether this tool will be the best way to meet it or will it increase the costs.

There are valid arguments which have been made in respect of this. I will not rehash them further but if the Government wishes to proceed with this route and if all the warnings do come through and we see an increase in inflation - and maybe the Minister of State is right and these other experts are wrong and maybe prices will not rise - my amendment gives us a break mechanism or an internal break. The amendments states if prices do rise and if there is an inflation of "more than five per cent inflation in the price of dwellings in the State recorded in any given year", that this section would be suspended for the following year. It implies if we see it heating up, we will apply some measure of cooling down, so if there is a danger this shared equity is heating the market up further, we will take a year's break and review.

This does not stop this section proceeding, but it protects us and gives us a way of responding to adverse consequences, if they do emerge. It is a reasonable mechanism. I do not want to call them unforeseen consequences, because the potential consequences have been very much foreseen, foreshadowed and fore-signalled, but if we do have inadvertent consequences, which are not the intention of the Minister of State, we will be able to apply a cooling-off period to assess if shared equity has been contributing to the inflation without having to go back to the drawing board in terms of new primary legislation or anything else.

My amendment does not assume shared equity has been the driver of inflation, even though it seems it is the likely driver. It suggests one would have a 12-month period in which to assess whether this part of the Bill is working out as was envisaged and hoped, or whether it is contributing to inflation.It seems a sensible and precautionary measure. Given this involves a substantial amount of State finances, it seems reasonable that we have this measure to ensure we take timely action, if we need to.