Paul Gavan (Sinn Fein) | Oireachtas source

It is nice to see the Minister of State. As he will be aware, we have been very constructive in supporting these financial provisions Acts regarding the pandemic but we will not be supporting this one because of the outrageous clauses that reward cuckoo funds and vulture funds with sweetheart tax deals. That is exactly what they are. Interestingly, the history of these ridiculous schemes where instead of buying and building houses local councils lease houses from investment funds was started by Fianna Fáil in 2009 along with the Green Party. For the dozens of people who might be watching these proceedings at home, effectively, I am saying we pour millions into investment funds in terms of rents at the end of which the council owns nothing. We are literally pouring money into a black hole. To be clear, it appears to be Fine Gael and Fianna Fáil policy. It is interesting to note there is not a cigarette paper’s worth of difference between Fine Gael and Fianna Fáil, which possibly explains the result we had last Friday in the by-election.

I want to be clear on this. With this amendment, the Minister brazenly gives investment funds a tax break when they snap up homes from under the noses of struggling home buyers if they lease them to local authorities, with the latter and taxpayers picking up the Bill and paying their rent to the investment funds for 25 years. The funds do not pay a cent in corporation tax on the rent that is paid them. The tax arrangements have been facilitated by the Government, including by the Minister for Finance. You literally could not make this up. Not only will the legislation allow funds to continue to push struggling home buyers out of the markets, but it will also deliver poor value for money for the taxpayer. This is not only the view of Sinn Féin; it is also the view of officials in the Minister of State’s Department. Not only are investment funds outbidding prospective home buyers, but they are also outbidding approved housing bodies by as much as €80,000 per unit. They can do so because the Government has introduced sweetheart tax deals that allow them that type of firepower. It is doubling down on those with today’s sneaky slotting of this provision into this particular Covid Bill.

Let us remember that only a few weeks ago, the Taoiseach said: “Let this go out loud and clear no county council should be engaging in a long term lease with these institutional investors”. He said that on 4 May, but in classic Fianna Fáil style it is a case of this Government saying one thing and doing the opposite. Our Seanad colleague, Senator Fitzpatrick of Fianna Fáil, said “I specifically call on the Minister for Finance to end tax incentives for investment funds to facilitate the wholesale purchase of first-time buyers’ homes. Yet, how will she vote today? It is quite outrageous. With this latest tax wheeze, increasing amounts of social housing will be in the hands of cuckoo funds, which pay no taxes to the State but will be in receipt of taxpayers’ money each year in the form of rent received. What we are seeing is the marketisation of social housing. That is what it is about. It is about another form of privatising housing and the State walking away from it. It is outrageous. It is a loophole deal that the Sicilian Mafia would be proud to deliver and it is courtesy of this Fine Gael-Fianna Fáil-Green Party Government.

The Tánaiste justified this scam by saying they had consulted the builders and they told the Government this tax, ridiculously small as it is, would not be a good idea. Of course, they said that. They are getting money from these investment funds. What would we expect them to say? There is a simple answer to this and I will put it to the Minister of State. There is a false choice that if we do not give these tax incentives people will miss out on homes. Of course, we should be building our own housing and excluding these entities but, if in the short term we have to source some housing from private developers as a stopgap, we should purchase it directly from the developers, not lease it from an intermediary, namely, a cuckoo fund or vulture fund. That is incredibly bad value for money. I am genuinely shocked because the Taoiseach said one thing a matter of weeks ago and now the Minister is doing the exact opposite. It is nothing less than a sweetheart deal for investment funds. It is in that great Fianna Fáil tradition, in particular, of cuddling up to these people.

I heard Senator Casey’s speech last Friday and would remind the Minister of State of two things. The first is that Fianna Fáil had a hell of a role in creating this crisis. It propped up a disastrous Fine Gael Government for four years. The second is this Government will not solve the housing crisis. The Economic and Social Research Institute, ESRI, has said the Government is only spending half of what is required to solve the housing crisis. Let us be clear on this. The Government is not delivering for the people and by its own sums, as set out by the ESRI, there is no prospect of delivery. It is failing on housing again.