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 Header Item Leaders' Questions (Continued)
 Header Item Financial Resolutions 2017
 Header Item Financial Resolution No. 2: General (Resumed)

Wednesday, 12 October 2016

Dáil Éireann Debate
Vol. 924 No. 2

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(Speaker Continuing)

[The Taoiseach: Information on Leo Varadkar Zoom on Leo Varadkar] As the Deputy is aware, the Government made available a €200 million fund so that local authorities could open up sites that are currently inaccessible and where roads or bridges might be needed. There are opportunities for the local authorities, which have the devolved authority in setting the levies for builders, to deal with such applications by payment upfront which is then returned, depending on whether the houses are built on time and to standard. Many variations can be followed through by the local authorities with the builders or developers of houses. There is a full range of initiatives in that regard as well as decisions to be taken. Builders will not build houses unless they make a profit. The cost of some of these was prohibitive in the past and, with the collapse of the construction sector, we are now way behind in the supply that is needed. The decision yesterday on that targeted initiative was for the building of new houses to deal with supply. Yes, there will be arguments that if the VAT level is reduced, a better result will be achieved. The important thing is that there is a timelined initiative in this area. There is a three-year timescale so that builders will have the opportunity to provide houses for those who wish to avail of them and avail of this targeted initiative.

The housing programme is much broader than this. It seeks to deal with the social housing challenge we face, the homeless and the return of voids to a situation where they can be used and lived in by families. This is the most comprehensive housing programme ever produced by any Government, and it is being rolled out now right across the country. The points the Deputy made as to when a deposit might be paid are relevant and when the first, third, fourth or fifth payment will be made. However, the issue has moved on since then. We need a prioritised set of initiatives to make this happen if we are to deal with supply because when that cannot be dealt with, rents and house prices go up, which is not in the interest of those who have an opportunity to get their own houses.

Deputy Danny Healy-Rae: Information on Danny Healy Rae Zoom on Danny Healy Rae Nothing has moved on and nothing is moving, and that is the truth of it. I am not happy with the Taoiseach's answer because he moved away from the two questions I asked him to deal with. If he keeps doing that, we will finish up where we are with no house being built. The fact of the matter is that developers cannot access money in this country at present and they do not have money of their own because they have been out of business for the past eight or nine years. That is one problem. The other problem is that the levies, taxes and VAT, which amount to 37% of the cost of the building of the house, must be paid upfront. I ask the Government to intervene here and do something about this. It can have all the pies in the skies and all the notions and all the strategies but they will amount to nothing if it does not deal with the fundamental problem, which is money for the builders to get them going. Maybe if they were rolling for two or three years again, they could keep rolling, but they cannot even start now because they cannot access money. It is not available from any Irish bank, and if they get money it is at a cost of 10% or 12.5% and it is from outside the country. That is not fair. If the Government does not address these two issues, it can keep developing strategies and printing books and papers, but it will not result in houses and we will finish up where we are, that is, nowhere.

The Taoiseach: Information on Leo Varadkar Zoom on Leo Varadkar I am sure the Deputy does not want to go back to having ghost estates, unfinished houses and builders going bust. There was previously very little regulation in this country over the amount of money that could be borrowed by builders. Loans of 100% were being made available and houses were then being sold on because of the profit that could be made on them. That all went bust, and Deputy Healy-Rae has evidence of it in his county, where there were ghost estates and unfinished houses before the sector collapsed. The same rules cannot be applied today. It is different and it must be so because we will not go back to that situation. That means that builders looking to get into the business of developing houses must have a basic level of capacity to obtain credit themselves because they will not be able to borrow 100% from banks. That requirement was brought in because of what happened. How many hundreds of thousands of young people looking for houses were left in the lurch because builders went wallop and because of the lending processes? If we are to build houses now, we will build them in a proper fashion, which will be overseen, so that people can have affordable houses to live in. To help with this, the Minister has made available, with Government approval, a whole range of initiatives for builders to get back into business. I have heard what the Construction Industry Federation has said about this. If these targets are met, there will be an explosion in building, which will be very good, if properly monitored, and in the interest of thousands of people who can fulfil their aspirations to have a house. However, it will not be done in the way in which attempts were being made before. Times have changed.

Deputy Danny Healy-Rae: Information on Danny Healy Rae Zoom on Danny Healy Rae The Taoiseach has gone west again.

Deputy Mattie McGrath: Information on Mattie McGrath Zoom on Mattie McGrath Yes.

Financial Resolutions 2017

Financial Resolution No. 2: General (Resumed)

  Debate resumed on the following motion:

THAT it is expedient to amend the law relating to inland revenue (including value-added tax and excise) and to make further provision in connection with finance.

                                                                       - (Minister for Foreign Affairs and Trade).

The Taoiseach: Information on Leo Varadkar Zoom on Leo Varadkar Budget 2017 is the first budget of this new partnership Government. This is a different type of Government but it is one that is committed to combining all our different talents to build a strong economy in order to deliver a fair society. This budget reflects the issues that are most important to our people and the future of our country. Firstly, it will not jeopardise our recent economic progress by taking reckless risks. While our economy is recovering, that recovery has not been felt in every community or by every family. We must ensure that the right decisions are taken so that the benefits of a strong economy and a fair society can be felt by everybody.

Secondly, the years ahead will be dominated by the upcoming negotiations on the withdrawal of the United Kingdom from the European Union and its impact on our economy and society. The Government was prepared for that eventuality and now we must continue to take action to lessen the impact as much as we can. Related to this is our absolute need to get Ireland working again. While we have made huge progress in creating new jobs, there are still too many people out of work. Continuing to reduce unemployment, with a special focus on regional and rural development, is a top priority.

Thirdly, this budget will continue to use the fruits of a recovering economy to make our people's lives better. New funding and initiatives in health, education, policing, child care and social welfare will make a positive impact on the daily lives of everyone living in Ireland, young and old.

Finally, one of the biggest economic and social problems is the continuing lack of available housing following on from the crash in the construction industry. This budget provides significant funding to many of the measures outlined in the Government's action plan for housing.

The approach to the preparation of this budget has also been very different and it has been more open, inclusive and transparent than ever before. I commend the Ministers, Deputies Noonan and Donohoe, for their work along with all Government Ministers in designing a package that helps to address many of the challenges we face. In designing this budget, there has never been so much consultation, and I commend all those who engaged constructively in that process.

This year we conducted the second national economic dialogue, published some of the key budgetary inputs, including strategy papers on tax, and engaged more deeply and widely with others. The Oireachtas has rightly become a much more significant participant, including through the work of the Committee on Budgetary Oversight established in July. I expect that the committee will play a significant role in the years to come.

While the budget is a significant milestone for this Government and this Oireachtas, it is only a step, although an important step, in the ongoing journey of a healing that we are taking as a people. To make sure that we all get to that destination together, we will not contemplate any reckless risks that might derail us. In a week in which we have seen sharp volatility in foreign exchange rates, this budget needs to acknowledge the uncertain international environment in which Ireland now finds itself. As a consequence, the Government's commitment to the sound management of the public finances remains absolute. Economic and social progress go hand in hand, but only a strong economy, supporting people at work, can pay for the services needed to create that fair society. As a country, we can continue to draw strength from the progress we have made. Our economy is growing at a healthy rate, reflected in strong tax returns, increased domestic demand, growing consumer spending and new jobs. We expect to grow at about 4.2% this year, well ahead of our European partners. The public deficit is set to be under 1% this year and we plan to eliminate it altogether in 2018. From a high of 120% in 2012, our debt-to-GDP ratio now stands at 79%, and we will continue to move closer to the new goal set by the Minister for Finance of 45%. It is true that GDP, deficit and debt figures mean little to families who struggle to cope with financial pressures, but we need to avoid at all cost the cycle of boom and bust which devastated our country and split families to the far corners of the world.

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