Joan Burton (Dublin West, Labour)
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I move:

(1) THAT for the purposes of providing for the refund of appropriate tax paid on deposit interest earned by first-time purchasers Chapter 4 of Part 8 of the Taxes Consolidation Act 1997 be amended by inserting the following section after section 266—

266A. (1) In this section—

‘first-time purchaser’ means a person, being an individual who, at the time of a relevant purchase, has not, either individually or jointly with any other person or persons, previously purchased or previously built directly or indirectly on his or her own behalf any other dwellinghouse or apartment;

‘relevant purchase’ means the conveyance of a dwellinghouse or apartment, on or after 14 October 2014 and prior to 31 December 2017, into the name of a first-time purchaser for use as his or her place of residence;

‘relevant savings’ means so much of the aggregate amount at any time of any relevant deposits held in the name of a first-time purchaser, individually or jointly with another first-time purchaser, as does not exceed 20 per cent of the amount of the consideration paid in respect of the relevant purchase by the first-time purchaser;

‘relevant savings interest’ means relevant interest paid, at any time in a period of 48 months ending on the date of the relevant purchase by a first-time purchaser, to the first-time purchaser in respect of relevant savings.

(2) Notwithstanding section 261(b), appropriate tax which—

(a) has been deducted from relevant savings interest paid to a first-time purchaser, and

(b) would not otherwise fall to be repaid under this section or any other provision of the Tax Acts,

shall be repaid to a first-time purchaser on the making of a claim by the first-time purchaser to the Inspector in that behalf.”. (2) IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act 1927 (No. 7 of 1927).

Billy Kelleher (Cork North Central, Fianna Fail)
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The Fianna Fáil Party welcomes the proposed measure as an acknowledgement of the pressures first-time buyers will experience in the foreseeable future. Last week, I raised the publication of guidelines by the Central Bank, on which discussion and consultation are taking place. A broader debate is required on housing policy, housing strategy, the shortage of housing, ways to increase supply and action to make the purchase of a home affordable for ordinary people. Home ownership is a principle that is held dear by most people.

Many people were critical of escalating house prices in the past and argue that they brought about the economic crash. That it is necessary, only a short few years after the crash, to introduce policies to try to assist first-time purchasers of homes, indicates that the inflationary pressure on house prices in the capital may spread to the regions.

We all want a functioning and stable housing market. When one peels back the various layers, however, one finds that we still have a dysfunctional banking system. It is worth repeating that despite our membership of the Single Market and the euro, Irish banks are penalising their customers to the tune of about 2% in terms of excessive interest rates. The penal interest rates being charged by Irish banks have made the purchase of a home unaffordable for many. Having bailed out the banks and supported them through recent turmoil, the State has received little thanks. Banks are repairing their balance sheets by charging customers through the nose in terms of interest rates and reaping the benefits of increasing property prices.

The Government gives itself a pat on the back because the banks are returning to profitability but they are achieving this by nailing customers to the wall through criminal rates of interest, which currently stand at between 4.5% and 5%. Every time the European Central Bank cuts the interest rate Irish banks quietly issue polite press statements in which they decline to pass on the ECB reduction in their variable rates. The policies they are pursuing make it virtually impossible for first-time buyers to purchase a home. In the meantime, the Department of Finance sits on its hands and the Government allows itself to be slapped around by the very banks the State rescued. It is time something was done on this issue because we are on the same slippery slope again.

The Minister for Finance spoke earlier about meeting the fork in the road where paths diverge in the yellow woods. Many people have reached a crossroads. This welcome measure, which will cost the Exchequer approximately €2.4 million, will provide a small amount of assistance to first-time buyers. If the current inflation in house prices in Dublin persists, much more than this measure will be needed to help first-time buyers save a deposit of 20%. First-time buyers are at a serious disadvantage because they must compete with investors with access to cash who can get on the property ladder faster. We are asking the banks to support first-time buyers by passing on interest rate reductions as opposed to issuing fancy press statements applauding themselves for returning to profitability.

They are doing it by extortion. We have an ECB rate of 0.15% but we are asking first-time buyers to march into a bank with a small bit of assistance from the State on DIRT interest retention return. The banks will say that it is a 4.5% variable rate regardless of what the European Cental Bank charges. There is almost a 0% interest rate in Europe, yet we are charging 4.5%. Interest rates are going to increase over the coming years and the variable rate will also increase quite dramatically.

We should be strong on the housing supply issue so that we can get a functioning market. We should also have a discussion very quickly on the Government's view of the loan-to-value ratio guidelines that have been announced by the Central Bank. There is a consultation process and the Central Bank is independent. However, that does not mean that the Government should not have a view on the guidelines. This view should be expressed in here at some stage because it is fundamental and critical to giving people a sense of ownership and a stake in society. We have always encouraged home ownership, which is the one thing people yearn for. It is not just about getting on the housing ladder, but a value system giving people a stake in society. The Government is turning a blind eye to the banks' extortionary tactics while trying to help first-time buyers. We welcome this provision but it is insignificant given the inflationary pressures creeping into the Dublin housing market, which are beginning to spread throughout the country.

We welcome this measure and support it but there must be a well thought out response from the Government, the Oireachtas and the people concerning the Central Bank's loan-to-value ratios. If we continue as we are with inflationary pressure in rents as well, investors will be back in the market getting good returns while outpricing first-time buyers. We will, therefore, be back to square one. The State is trying to support first-time buyers in a good, well-intentioned and meaningful way but it will have no significant impact on their ability to get on the ladder at the start. Therefore, this measure needs to be broadened out to a certain extent.

The measure will operate for 2015 and 2016, with savings accruing for the previous four years. If we keep going as we are, however, people will not have any savings. Their savings will be eaten into by the cost of rents in this city. The Department of Social Protection is trying to play catch up with rent allowance for people who are dependent on assistance for private rental accommodation in the capital city. That is because of the crisis in social housing. We are in this continual catch-22 situation, so have we learned anything?

For the past three or four years, it was considered almost evil to mention building houses again. Ballaghaderreen and some other parts of the country may not require houses but we do need houses quickly elsewhere. There should be a proper policy response to this matter, but it has not happened. In fairness, there was an acknowledgement in terms of the 80% windfall tax. I hold no truck with developers or builders who make loads of money, but the problem is that without them we cannot build houses. The State certainly cannot build them because, to date, it has failed miserably to do so. There is a need for proper policy responses. In his Budget Statement, the Minister for Finance said the windfall tax might encourage people to bring land to the market for development stage. Such measures are welcome and will be discussed but they are quite a way down the road, so we should be conscious of what we are doing.

First-time buyers are having difficulty buying houses and paying for them, even though the interest rate - which is high compared to the ECB's lending rate - is at a historically low level. Over the term of a loan, it is always hardest to meet one's repayments for the first seven to nine years. No doubt, we will have interest rate rises in the coming years. The German economy will not be stagnant forever and there will surely be some growth in the European economy over that time. The very minute there is some inflationary pressure in the German economy, I can guarantee the Tánaiste - she is an accountant who has studied economics - that there will be interest rate increases immediately to respond to such inflationary pressure. People here will then be out of kilter with the broader European economy due to huge borrowings and rising interest rates. We should act quickly and with steely determination to ensure an adequate housing supply, thus reducing the pressure on first-time buyers.

We welcome the measure. I would like to go on longer but I know this is an important issue to which many Deputies want to contribute. The Minister can divide the sum of €2.4 million any way she likes but it is a finger-in-the-dyke move. An awful lot more is needed to ensure that our first-time buyers have a start. They must have an opportunity to play a meaningful role in society.

Peadar Tóibín (Meath West, Sinn Fein)
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While I welcome this measure in principle, I shake my head in despair over the lack of resources and the Government's lack of focus on the housing crisis, which is an unmitigated disaster. We are talking about a humanitarian crisis facing people. Last Friday, I got a phone call from a family who are on the streets and have nowhere to go because the council offices were closed. People are living in tents, cars or are couch-hopping from one relative to another. Some 89,000 people are on the housing waiting list, which is incredible. I am amazed that while the Government talks about a bright new dawn, a new recovery and turning the corner, it focuses so few resources on such a massive humanitarian crisis.

The Tánaiste is one of the major contributors to this crisis because she has capped rent supplement throughout the State. This has forced people to put their hands in their pockets and find other resources to bridge the gap or they will find themselves homeless. It does not make sense that rent supplement is divorced from rents. If the two are not matched, how are people expected to pay for accommodation? It is unbelievable.

Capital expenditure in the budget will create 2,000 new social houses. At that rate of construction, with 89,000 people on the housing waiting list, it will take over 40 years to deal with it. In Meath alone, there are 4,500 people on the housing waiting list. After two and half years, the budget may deal with housing in only one of the Twenty-six Counties in the State. This budget provides for a €210-million increase in capital investment, which is less than 10%. It will provide an additional 1,500 new jobs. This is the so-called stimulus the Government meant during the fiscal treaty and the last local and general elections when it festooned lampposts with the word "jobs". At this pivotal juncture of turning the economy, however, we have only the promise of 1,500 jobs from increased capital investment.

Lack of social housing construction is one of the major problems causing the numbers seeking accommodation to balloon.

The Government has not used mechanisms that are at its disposal. It could, for example, use invest in different special vehicles which would be able to leverage the money and create far more housing for its buck. Cluid and other social housing organisations receive about 30% of their investment from the State and seek loans for the rest of the money. For every euro they receive they can invest €3 or €4 in houses, but this has not happened here.

One of the major problems in housing provision is the supply side. It is not being properly dealt with. One of the major breaks on the supply side is the same which pertains to enterprise in the State. That is because the banks will not provide the necessary funding for developers to be able to purchase the land and build the houses. Deputy Kelleher rightly spoke about the exorbitant interest rates, but the sad fact is that if one solved the interest rate crisis without solving the supply side crisis it would lead to further housing inflation. The supply side crisis has to be resolved before house prices and rents are reduced.

The idea that the windfall tax will be reduced to, I understand, 33% which is lower than the upper rate of tax makes no sense. It should be the same. Last year we saw a dramatic rise in DIRT to 40%, from 33%. This resolution shows that was not thought through with regard to young people who are trying to get onto the property ladder.

The answer to the crisis is not this dismal proposal. Rather, it is the State taking responsibility for social housing and resolving the problems on the supply side in the private housing sector. Until those two significant issues are dealt with we will see more people telephoning Deputies at 5.30 p.m. on a Friday looking for somewhere to live. People are living in cars and are bed-hopping. Until there is a match between the rent supplement provided by the State and the actual market price we will still see people forced out of their homes.

Ruth Coppinger (Dublin West, Socialist Party)
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While I support this measure, it is paltry. So too are two other major housing measures introduced by the Government. The first is the 20% deposit requirement for banks, about which many people are up in arms, and the second are the budgetary measures taken today.

It is a pity the Tánaiste and Minister for Social Protection has left the Chamber because I wanted to discuss three harrowing cases of which I have had experience in my constituency. One case concerns a young women who had a baby by caesarean section and was discharged from hospital with major scarring to live in a Travelodge with four of her other children. She was evicted the following weekend to make way for paying customers and has lived in three different hotels and hostels. I had to pay for two nights accommodation for her because the councils are not even providing emergency accommodation. Yet, the Government has come here today with no sense of urgency whatsoever about the housing emergency facing the State. There is a family living in tents in a garden in Dublin West and everybody saw the elderly couple evicted onto the streets by a bank which repossessed the property they rented for 15 years.

It seems as though anything we say on this side of the House is water off a duck's back to the Government because it does not seem to take any notice of the fact that a crisis is unfolding. Another measure the banking governors introduced, presumably with the approval of the Government, was the requirement for a 20% deposit for young people or first time buyers. We are all opposed to the speculation that was allowed to happen in the banking sector over recent decades. However, people who have come to me about the measure have said it means only rich children will ever be able to buy a house because their mothers and fathers who have resources will be able to lend them money. Ordinary people on low and middle incomes will not be able to do that. The ability to buy a house has now been put further out of the range of people. The banks should have been taken over to resolve this crisis. It should not have been passed on yet again to young people. Real measures are needed to deal with the blockage to people acquiring housing, but the measures introduced in the budget today are pathetic.

In today's measures the Government has dedicated €2 billion over four years for the building of new homes, which amounts to 10,000 houses over four years. Some 2,500 houses will be built next year. There are 100,000 people on the housing waiting list and 10% of the need will be dealt with in four years' time. Yet, the Government tells us it has ended austerity and that there is a recovery. It is incredible that it would act in this way. In 1975, 8,500 council houses were built at a time when the population was lower than it is now. In the midst of the largest housing emergency facing the State it is proposed to build a quarter of what was built then. Does that give the Government any idea just how meagre its proposals are?

The Government hopes to achieve its aims this by throwing lots more money into the hands of developers, landowners and landlords. It has given more tax breaks to landlords and land speculators, with the reduction in a windfall tax. There is no need for such a reduction. Sufficient land is zoned for housing in most of the areas of need. The problem is that no houses are being built but the Government has thrown more taxpayers' money in the direction of developers. Why did it not see fit, for example, to restore the cuts in rent supplement? It has been cut by 27% over four years, making six people a day homeless as a direct result. The Government may not see the connection but everyone else does. It said it did not cut social welfare, but it did nothing to restore those payments which means that, on average, people have to pay at least €60 or €70 per individual in a house each week even though they are not working. The cuts have made people homeless and vulnerable to eviction.

The Government should take alternative measures to paying developers €250,000 from NAMA to drive around in nice cars in the hope they might start building houses, something which everybody knows has happened, relying on the private sector which has no interest in providing social and affordable housing because its interest is profit and profit alone and carrying on the ideological opposition to council housing. Very little of the housing proposed in the budget will be council housing. Rather, private housing will be provided by housing associations, which is not the same as council housing. They are charities which provide houses on the basis of selection, not waiting lists. It is a model more like those in the 1800s than those with which we all grew up.

We need emergency action to end the housing crisis. We need to nationalise the construction industry because there is no other way we can stop the logjam in the sector. The banks should have been taken over. Instead of fleecing people we could have provided housing for people's needs. Instead of paying, for example, €8 billion in interest on the debt this year, we could use the money to build 45,000 houses which would dramatically assist in the housing crisis and would put 45,000 back to work with real jobs, rather than JobsPlus, JobBridge and all the other measures proposed today.

Unfortunately, what is proposed is a drop in the ocean. We can only conclude that it is not in the interests of the Government or capitalism to end the housing crisis.

It is clear the Government is delighted that mansions on Ailesbury Road are rising in price, that prices of houses in wealthier areas are increasing , that people at the top see their negative equity reducing and that banks will now be able to reduce their balance sheet losses. These are the facts that the Minister, Deputy Noonan, said indicated a recovery. Meanwhile, people at the bottom and in the middle have no hope of finding a home and nothing done in today's budget will change that.

Tom Barry (Cork East, Fine Gael)
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I welcome the discussion on this resolution as it is a welcome measure. Simply, it offers full relief on tax on the savings of people who want to buy a new house and as it will run until 2017, it removes pressure from people and allows them time to look for a house. There has been some criticism in regard to the 20% deposit required from house buyers, but that measure brings equity to house purchase, makes people more resilient against interest fluctuations and makes them less likely to be unable to pay their mortgages.

The benefit of less financial pressure is underestimated. Most of us have seen people who signed up for mortgages in the past under desperate pressure. The 20% measure will slow down reckless bidding, reduce the possibility of future negative equity and any restructuring required in the future will not be as bad as it would have been otherwise. A short-term sacrifice now will lead to longer-term insurance. Policy in this area creates an environment where people can work. I take issue with the Member who said earlier that a 4.5% interest rate is extortionate. In 1996 when I got my first mortgage, it was at an interest rate of 7.7% for the first five years and we were glad to get that. One can now fix one's interest rate for ten years for a small amount of money, which provides certainty in regard to repayments.

The Member said that as a result of this new measure, interest rates will increase and that rates should be fixed now at a low rate. An interest rate of 4% is a very low interest rate. I have been in business for 20 years and know that if one had a rate of 4% across the board for that time, that would give a good result.

Billy Kelleher (Cork North Central, Fianna Fail)
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The ECB lending rate is 0.15%.

Tom Barry (Cork East, Fine Gael)
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If any person has a problem with a 4% interest rate, that person should reconsider buying a house.

I would much prefer to have a lower principal and higher interest rate than to have it the other way round. The suggestion has been made that property investors are doing well, but property investors have been losing money for the past decade and are still losing money, because the amounts they are receiving for their properties is less than what they owe to the banks. Therefore, they should not be criticised in that regard.

One would be forgiven tonight for thinking that this is just a Dáil for Dublin. I feel I represent the whole country, but there has been no mention of the other counties. Housing is as important an issue in Cork and Donegal as it is in Dublin.

Joe Higgins (Dublin West, Socialist Party)
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Yes, it is a pity the Deputy did not realise that earlier.

Tom Barry (Cork East, Fine Gael)
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I am glad the Deputy recognises that because up to now I only heard him speak about Dublin. I am pretty annoyed about that. Welcome to the rest of the country.

Peadar Tóibín (Meath West, Sinn Fein)
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I mentioned Meath.

Tom Barry (Cork East, Fine Gael)
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Rural Ireland will also benefit from this budget. Stimulus such as income averaging for farms for three to five years is significant and is also available to farmers who derive off-farm income from on-farm activities or diversification. We aim for an employment figure of 2 million and this will help significantly.

People who seek to criticise a stimulus that will help people buy houses are scraping the bottom of the barrel. One improvement I would seek in regard to this measure is for the discussion to be moved further in terms of the definition of a first-time buyer. In many situations people buy a house jointly initially and then singly. We need to discuss this issue because many elderly men and women are on their own and find they need to buy a house later on in life. We should try to help these people also.

Billy Timmins (Wicklow, Independent)
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I welcome this proposal, but I am always a little wary and suspicious of measures that are introduced to counteract negative publicity. Therefore, while I welcome this measure, I feel it has been introduced to counteract the negative publicity in regard to the Central Bank's proposed new lending guidelines. The same is true in regard to the measures introduced in the budget today to deal with the water charge crisis, once again a response to negative publicity. This is not a significant measure and just tips the cap to the housing issue. Deputy Kelleher mentioned the yearly cost of €2.4 million over the next few years. Will the Minister outline how the costs were calculated?

I would like to make a point regarding the windfall tax of 80%, which was introduced originally in a knee-jerk reaction. I understand that measure has not brought in even one cent since it was introduced. It was a crazy populist measure which was passed by this House.

I have mixed views in regard to rent supplement. In some areas of the country rents are disproportionately high because, under the old health boards, the rent supplement in those areas was greater than in adjoining areas although under the natural scheme of things rents in those areas would have been lower. That said, I believe rent supplement should be almost town specific. It is difficult to go about reducing rent supplement on a broad basis due to the number of factors to be considered, such as housing supply, the numbers on the waiting lists and the demographics of an area. There should be no carte blanche to reduce rent supplement across the board. Traditionally, in some areas rents have been disproportionately and inequitably higher than in adjoining areas, due to the fact they were in a health board area where rent supplement was higher. It is important the Exchequer gets value for money in regard to the rent supplement.

The issue of lists was mentioned. I believe that if we are to address problems, we must know the situation. I represent a mixed rural and urban constituency where there is a housing crisis and a severe shortage of houses. That said, I am deeply suspicious in regard to how lists are formulated. An attempt made to deal with lists in regard to medical cards was hamfisted and caused problems, but we must try to draw up lists that can distinguish between housing need and housing desire. Different counties take different approaches. Our lists are large and have increased significantly, but we must be able to establish the true extent of need. I do not have confidence that the lists we have currently are accurate, but this does not take away from the fact that housing is required.

In regard to the proposal before us and the Central Bank regulations, I believe the 20% deposit requirement for first-time buyers is too high. I believe the problem lies at the other end, the value of the house. The property difficulties we have had over the past decade were not because of a property bubble, but a money supply bubble. There was too much money available. We must try to address the difficulty in that context. I and my colleagues in the Reform Alliance produced a policy document entitled Fair Value, which we submitted to the Central Bank and the Minister for Finance. We will resubmit it to the Central Bank.

This document proposes we should establish a historical relationship between the average house price and the average income. In a stable economy, the average house price should be a certain multiple of the average income, whether four times, five times or six times that income and that this price should be used to calculate the loan. We want to stop banks giving out moneys indiscriminately, moneys taxpayers have had to pick up the tab for over the past decade. Some will argue that this gives cash buyers a significant advantage over people who must borrow. Unfortunately, such a situation is a sad fact of life. If I go to a garage to buy a car, I am in a better position with cash in my pocket than someone who needs to borrow money. If I have cash in my pocket it is easier for me to go on holiday than someone who needs to borrow.

The same is true in regard to housing. However, I believe housing is a right. It is difficult to address inequality, but we must try to address inequality of opportunity. We can do this in two main ways, through education and through the provision of housing. The new Minister for the Environment, Community and Local Government has not outlined his new housing policy in detail, but I believe policy is moving in the right direction, based on the headings outlined. I have, however, a concern regarding an issue mentioned by another Member, namely, the number of houses built in the mid 1970s. By and large, the standard of social housing built in this country throughout the 1970s and 1980s is a disgrace. We are all familiar with this housing in our constituencies. We must look again at our model of social housing.

My concern is there will be a rush by the Government in order that it can come along in 18 months and say it built 2,000 or 3,000 units of housing. That will not solve the problem. Many of our social problems have been created by the type of housing ghettos we have. We are all familiar with the terraces of ten or 20 houses, with the last three or four having upstairs apartments or flats, which elderly people or lone parents are often pushed into but which cannot be let out to a new tenant. The Government must seek to revamp such houses and move elderly people into single storey accommodation near the centre of towns.

We have to examine the model of social housing because the model we have produced to date has not been the correct one. That model has given rise to a hypocritical approach by many politicians and members of the public, who want social housing but, when it is proposed for an area, mount widespread opposition to it. The reason for this opposition, in some cases though not all, is not because people do not want to see others housed but because they do not have any confidence in the authorities to deliver housing that is adequate and sufficient, with the necessary facilities, green space and community facilities that should be a basic requirement.

When looking at these schemes, we have to cater for all needs. We cannot go along with the traditional concept with respect to these housing areas. The budget refers to €1.5 billion, to public private partnerships and to off-balance sheet schedules. That is playing with words and I am not sure it is going to work. However, if we only build one housing scheme in the coming years, I would like to see it done in a proper manner.

To conclude, I would like to see everyone encouraged to buy their own home and we must have a mechanism in place to achieve this. New regulations are being drawn up. These must be user-friendly and must enable people, no matter what income they have and particularly those who have been in social housing for 20 or 30 years, to purchase their own homes. Where there is home ownership, there is greater cohesion in society.

Jerry Buttimer (Cork South Central, Fine Gael)
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I welcome Deputy Fitzmaurice to the House and congratulate him on his victory in the by-election. I wish him a long tenure in the House.

This measure is of huge and positive assistance. It will encourage people to save and will reward responsible saving by first-time buyers. Where I agree with Deputy Timmins is that first-time buyers have a right to have the dream of owning their own home.

I am glad Deputy Tóibín is back in the House. I despair at times of the rhetoric of those in Sinn Féin. They are populist and they do not want to see anyone succeed except themselves. I ask them to look at themselves in the mirror and look at the policies they espouse and what they stand for.

Peadar Tóibín (Meath West, Sinn Fein)
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The policies are costed in full.

Jerry Buttimer (Cork South Central, Fine Gael)
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They oppose the rights of citizens to aspire to have their own home and they put forward nothing-----

Peadar Tóibín (Meath West, Sinn Fein)
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Aspirations are no good if there is no money.

Jerry Buttimer (Cork South Central, Fine Gael)
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They put forward nothing to help them. They abandon the people at the altar of populism every single time.

Peadar Tóibín (Meath West, Sinn Fein)
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Why does the Deputy not read our budget proposal?

Jerry Buttimer (Cork South Central, Fine Gael)
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That will be their downfall. They got caught last Friday in Dublin South-West and they will get caught again in 2016.

Peadar Tóibín (Meath West, Sinn Fein)
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We had triple the Fine Gael vote in Dublin South-West. The Deputy should listen to the people.

Jerry Buttimer (Cork South Central, Fine Gael)
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I have been listening.

Peadar Tóibín (Meath West, Sinn Fein)
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He has not been listening to the people of Dublin South-West. The Government has done nothing about the water charges. It is not listening. That is the problem. It needs to listen.

Jerry Buttimer (Cork South Central, Fine Gael)
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I did not heckle Deputy Tóibín.

Peadar Tóibín (Meath West, Sinn Fein)
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Deputy Buttimer is well able to heckle. He is one of the best hecklers here, for God's sake.

Jerry Buttimer (Cork South Central, Fine Gael)
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I have listened to the populism of those in Sinn Féin. I have listened to their empty rhetoric for too long. They peddle a load of baloney on the airwaves.

Peadar Tóibín (Meath West, Sinn Fein)
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The Deputy needs to listen again.

Jerry Buttimer (Cork South Central, Fine Gael)
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It is time they got caught out. They lead people up to the hill and then they get caught and exposed. It is about time they came out and told the people the truth. They have no policy. They do not stand for anything. All they stand for is populism.

Peadar Tóibín (Meath West, Sinn Fein)
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It is about time he listened to the people.

Jerry Buttimer (Cork South Central, Fine Gael)
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I am doing that. Tonight, first-time buyers are able to save to have that first home, with the certainty that they will be rewarded by the State.

Peadar Tóibín (Meath West, Sinn Fein)
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On what planet?

Jerry Buttimer (Cork South Central, Fine Gael)
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All of us agree, whatever our political hue, that we have a housing crisis in our country and that we need to build more houses. This is a Government which has put in place a plan to do so. In response to Deputies Coppinger and Tóibín, I accept we would all love to be able to click our fingers on a Friday at 5.30 p.m. for the person who comes into our office with a social housing need. It is not just their offices such people come into; they come in to all of us.

Peadar Tóibín (Meath West, Sinn Fein)
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It is not about clicking fingers. It is about putting investment in place.

Jerry Buttimer (Cork South Central, Fine Gael)
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The difference between the Opposition and the Government is that we put forward a plan to help them.

Ruth Coppinger (Dublin West, Socialist Party)
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What is it?

Peadar Tóibín (Meath West, Sinn Fein)
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It is an embarrassment. That is what the plan is.

Jerry Buttimer (Cork South Central, Fine Gael)
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The plan is predicated upon the fact that we need to recognise that, for 20 years, we did not have a social housing policy by Governments. It was abandoned on the altar of the developer and the construction industry, and we allowed it to come to a stop.

Billy Kelleher (Cork North Central, Fianna Fail)
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This sounds like a great plan.

Anthony Lawlor (Kildare North, Fine Gael)
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What about Part V?

Jerry Buttimer (Cork South Central, Fine Gael)
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If we look at the figures for social housing built under Fianna Fáil's tenure in government, Deputy Kelleher would have to admit it was an abject failure on its behalf.

Billy Kelleher (Cork North Central, Fianna Fail)
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I categorically deny that.

Jerry Buttimer (Cork South Central, Fine Gael)
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We need land to build houses and we need people to construct them. What we need is a construction industry that is normalised and that is free from the shackles-----

Billy Kelleher (Cork North Central, Fianna Fail)
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Free from nonsense.

Jerry Buttimer (Cork South Central, Fine Gael)
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And free from nonsense - I agree. This is in order that we can build quality housing. We need to encourage the supply of houses. If we look at the figures on what was built last year, fewer than 9,000 units were built when we should be building 25,000 or 30,000 per annum.

I point out to Deputy Coppinger that we have to create a sustainable property market. I do not fly the flag for those living in mansions on Ailesbury Road. I have never been in one and I have no desire to go into one. I represent the person who is struggling to live life every day, who is in negative equity because of the policies pursued by a Government that went from boom to bust.

Joe Higgins (Dublin West, Socialist Party)
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The Deputy does not represent them. He has done nothing for three and a half years.

Ruth Coppinger (Dublin West, Socialist Party)
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How can he say that after this budget?

Jerry Buttimer (Cork South Central, Fine Gael)
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Deputy Higgins does not own the people who come into his office.

Joe Higgins (Dublin West, Socialist Party)
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They have done nothing for three and a half years.

Jerry Buttimer (Cork South Central, Fine Gael)
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Many of us in this House are working with the Government every day.

Peadar Tóibín (Meath West, Sinn Fein)
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They are hammering the people.

Jerry Buttimer (Cork South Central, Fine Gael)
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Where Deputy Higgins and I disagree is that we on this side of the House put forward policies to bring about change, where people can live and can buy.

Ruth Coppinger (Dublin West, Socialist Party)
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They do not. They have done nothing.

Jerry Buttimer (Cork South Central, Fine Gael)
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That is why this Government will deliver. That is why we will have a sustainable housing policy that will deliver to people. I accept it is not as fast as some of us on this side of the House would like.

Ruth Coppinger (Dublin West, Socialist Party)
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They have not delivered anything.

Jerry Buttimer (Cork South Central, Fine Gael)
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I accept that.

Peadar Tóibín (Meath West, Sinn Fein)
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Is Deputy Buttimer speaking about the same budget as the one we all heard about today?

Jerry Buttimer (Cork South Central, Fine Gael)
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Deputy Tóibín is embarrassed by what happened last Friday when Sinn Féin got caught out. It is about time that party was exposed for the shallow policies it has pursued for three years of opposition - against nothing, for nothing and standing for nothing.

Peadar Tóibín (Meath West, Sinn Fein)
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The Deputy should be Minister for fairy tales.

Jerry Buttimer (Cork South Central, Fine Gael)
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I will conclude on this point. With regard to first-time buyers, I hope there will be engagement with the Central Bank consultative process.

Billy Kelleher (Cork North Central, Fianna Fail)
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We have a view on that.

Jerry Buttimer (Cork South Central, Fine Gael)
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The 20% issue is one that requires engagement. I am conscious that some people feel the 20% may be too much for them. In saying that, for the first time we have a Government with a housing plan and with a policy that will create houses, and which will work with different sections of the market to bring about a situation where we will have a sustainable housing sector into the future.

Billy Kelleher (Cork North Central, Fianna Fail)
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Does the Government have a view on the Central Bank proposals?

Robert Dowds (Dublin Mid West, Labour)
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First, I express my support for this measure. It is a small measure that is one part of the whole housing package that has to be delivered. It is very important in terms of the provision of private housing that we watch the situation to see if people can afford to purchase. If there are continuing difficulties in this area, it is very important that we make further interventions.

On the general issue of housing, I welcome the fact €2.2 billion is being set aside in the budget to address the chronic situation that exists for so many people. This will deliver a substantial number of houses next year and, in one way or another, it will deliver up to 7,500 houses in all.

I wish the State could put more money into the direct provision of social housing.

Given the debt borne by this State, I welcome the fact that the Government has devised various different models for acquiring finance to provide housing. Of all the issues we face at the moment, I would ask the Cabinet to keep a very close eye on how things are developing in housing, because it is absolutely essential that people are able to acquire housing regardless of whether they are dependent on social housing or private housing. We must get away from the current situation in which many people are unable to get housing or are living in situations that are totally unacceptable.

I represent a constituency that has land that was zoned for housing in the early 1970s but is still lying idle. It is beside the railway that comes into Dublin from Munster and the Galway direction. If that land is not used, I am very keen to see severe penalties for those who are sitting on that land. I ask the Cabinet to see that land is not being hoarded and that it is used for housing, where that will be of benefit to the local community and city.

Anthony Lawlor (Kildare North, Fine Gael)
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I welcome the innovative measure that has been put forward this evening. Such innovative measures, however small, send a signal that the Government is trying to assist young people who are looking to purchase their own housing. I am probably being very repetitive about the issue of housing because I keep going back to when I served in a local authority in 2000. I was the only member of the local authority who opposed Part V of the Planning and Development Act. Part V was a sop to Fianna Fáil's friendly developers. It allowed, supposedly, 20% of a development to be designated for social and affordable housing. Of course, people did not think there would ever be a crash. They thought the party was going to continue forever. When the crash came, no social houses were being delivered. What happened was that Fianna Fáil allowed local authorities to renege on their social duty to provide social housing unless it involved their developer friends. I am still totally opposed to Part V. At the time, Kildare County Council was acquiring 20% of any land that was being put forward for zoning. We were acquiring it so that the local authority would have a land bank on which to build houses, schools, playgrounds and amenities. That was a positive step. Unfortunately, the Minister of the day, Noel Dempsey, decided in his wisdom that this was not right, that local authorities should not be in the game of providing these facilities and that central government was the best way to do it. We see the consequences of that with all the people on the housing waiting lists at the moment.

There is a degree of scaremongering with regard to the consultative process proposed by the Central Bank, and the message probably has not been clearly stated. Most commentators are talking about a 20% deposit being required. To my mind, a requirement for a deposit of 20% should be used when there is overheating of the housing market. We do not have that overheating; we have a complete supply-side deficit, which is resulting in the current situation. I hope a message will go out that it is for public consultation and discussion and that the public should make its submissions. I will be making a submission on that.

I welcome the proposal to allocate €2.2 billion over the next three years to local authorities or housing agencies to build houses. I have said a number of times that the Department should consult with and write to local authorities to get them to become more proactive in getting their land banks ready through the Part 8 process, so that when funding is allocated to them they can actually start building houses. Many local authorities with greenfield sites are waiting for money to be allocated before they go through the process. We all know that the process can take a considerable period of time. I encourage the Minister to ask the Minister for the Environment, Community and Local Government to write to local authorities to get them to be proactive in getting their greenfield sites shovel-ready so that when the funding comes for the building of houses, it can be in place. I welcome this innovative measure. It will send a signal that we will try to help young first-time buyers in whatever way we can.

Michael Fitzmaurice (Roscommon-South Leitrim, Independent)
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Like the other Deputies, I welcome the proposal, but I think that as a nation we need to look at the entire housing scenario. First of all, we have a dysfunctional banking system. So many people have come to me who might have a certain amount for a deposit but have gone to two or three banks and have been refused. One then looks at local credit unions. They were not the ones who took down this country. It was the dysfunctional banks that were bailed out. The credit unions today have to turn around and give 0.1% in places to lodge their money. Instead of looking at the EBS or whoever it is looking at with regard to new methods of lending money, the Government needs to look at the credit unions and give them the choice of having a wider banking system. Many credit unions have a lot of money in storage and it is costing them money to keep it there.

We have talked about social housing. There are 130 houses in one council area I know of that have been lying idle for the past three years. In city council areas and right around the country, there may be 4,000 to 5,000 houses lying idle that have not been let out to people. We should bear in mind that the Department of Social Protection is giving approximately €100 per week to people who are renting alternative accommodation, and this is paying for private housing. The Government needs to design a new housing strategy that will allow the Department of the Environment, Community and Local Government to do up these houses to the required standard for people to live in them. I have estimated that it would save the State approximately €30 million.

There are large tracts of land around the country that are owned by NAMA. A decision must be made to release this land, because the low- to middle-income people who are trying to put together the 20% deposit the banks are looking for need to have houses that are affordable when they are looking for a mortgage. These decisions need to be made rapidly. There are children from the country who are going to college in Dublin. A room in a house in Dublin can cost up to €600 per month. That is one room in a house. Families cannot afford that. We need to make sure we have a proper housing strategy.

James Bannon (Longford-Westmeath, Fine Gael)
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I very much welcome this measure and agree with the previous speaker. This country needs an effective housing strategy to tackle many things, particularly the substandard housing in rural Ireland. There are over 600 ghost estates throughout the country that are a scourge and a blight on the landscape. There is a housing crisis in Dublin and the other larger cities. This is not the case in rural Ireland. We need a strategy to help fill housing units in rural Ireland, particularly in the midlands, to the benefit of the local economy.

Time and again we have moved the administration of functions such as the processing of SUSI grants to the capital city. Medical card applications are administered in Finglas. This brings people from rural Ireland to Dublin and puts pressure on housing stock and accommodation. The universities are located in the cities around the country. Athlone Institute of Technology is a fine college, but a university is needed in the midlands, where accommodation is cheap. Concessions should also be given to returning emigrants, many of whom would be happy to come back to their roots and live in local communities. Services need to be relocated from cities to rural Ireland. This would be a win-win for rural Ireland because the money would be spent locally in shops, restaurants and supermarkets, thereby improving the fabric of rural towns.

James Bannon (Longford-Westmeath, Fine Gael)
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In my own village of Legan six state-of-the-art three and four bedroom houses were built on one quarter acre sites. The company went into receivership and the houses were recently sold for €152,000 after the local authority had spent approximately €200,000 in refurbishing the surrounds. They were sold at a knockdown price. We need an effective housing strategy to deal with this sort of issue. We also need incentive schemes to kick-start the purchase of property outside Dublin. There is a crisis in this city, but that crisis has not extended to rural Ireland, where one can still purchase good quality three bedroom houses for less than €30,000 closer than 100 km from the capital. Something needs to be done to revitalise rural Ireland. I hope the Government takes note of this.

Pat Rabbitte (Dublin South West, Labour)
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I agree with my colleague, Deputy Robert Dowds, that this is a modest but positive measure which ought to be welcomed. For more than 20 years we have transferred our social housing needs to the private rented sector through a rental support system that has penalised people who want to go to work. We were importing workers to build apartments and houses for workers we were also importing. Nothing better highlights the folly of the policies we pursued than the conflicting contributions from colleagues in this city, in which there is now a housing shortage, and colleagues such Deputies James Bannon and Michael Fitzmaurice, whom I welcome to the House, who pointed out that we built houses where there were no people. We have houses, but they are not located where they are needed. I am glad that the Central Bank and the regulatory system are doing what they ought to have done in the past, but, in respect of the figure of 20%, I hope there will be a genuine public consultation process because having a figure of 20% is going too far at this juncture in dealing with the housing problem. It is only recently that banks began to loan again to young people seeking mortgages and the terms announced by the Central Bank are probably going too far. I hope it will respond to the public consultation process that it has initiated.

A problem appears to have arisen in that the few builders who have been left standing are having difficulties in sourcing credit because of their past records with the banks. Presumably, while stress tests are under way, the banks are not too distressed - if I may use that term - about this because it helps their internal ratios if they do not have to loan money to the building sector. An understated proportion of the population of the country are now engaged in construction and it seems that we could reasonably double the proportion at work in the construction sector to meet existing demand. Vigilance and monitoring will, of course, be required, but we should not go overboard. There is a demand and we should do what we can to encourage it being met.