I want to address Financial Resolution No. 4. I have to say I am not surprised that none of the Ministers from the relevant Department are here to defend it because it is quite clear they were not in favour of the introduction of this particular policy measure. There is no doubt there is a challenge in terms of affordability and viability but the suggestion that a reduction in VAT on new apartment purchases, from 13.5% to 9%, would do anything to address either of those issues is absolutely absurd. In fact, it shows that this Government, more than any of its predecessors, has been completely captured by one particular lobby group, namely, Irish Institutional Property. When the outgoing Government was exposed for misleading the public during the election campaign on new home completions, the Government went into a tail spin and in walked Pat Farrell from Irish Institutional Property. The lobbying register confirms the volume of times he was in Government Buildings earlier this year. He looked for three things. He wanted a dramatic reduction in the quality of apartment standards - smaller and darker apartments - and he got that. He wanted to be able to reset private rents in between tenancies to the top of the market rents. He got that. And he wanted this. He wanted a VAT reduction, which will do nothing at all to increase the output of apartments or reduce their cost to purchasers or renters, but it will do everything to put more money into the pockets of his clients, and he got that. What is really unbelievable about this measure is not just the blatant way in which the Government has decided to increase the profits of large apartment developers by an average of €25,000 per apartment, but in addition to that, it will do nothing to increase supply or viability. On that basis, Sinn Féin is opposed to it. If the Minister is able to come back in at the end of this session, I would like her to respond to four very specific questions about this resolution. Will she confirm, as it appears from the Minister's statement today, that this VAT reduction is at the point of sale and purchase of apartments? Why is the Government allowing it to be applied to buildings currently under construction? The Government will spend €250 million next year on this measure. These are apartments that are being built now, the overwhelming majority of them have purchasers now and the Government is going to blow €250 million on a so-called activation measure for apartments that are already under activation. It makes no sense whatsoever. The bulk of the people buying those apartments are approved housing bodies and local authorities. Will the Minister confirm that they will not be protected from this measure? That means the State is essentially going to be paying €20,000 to €25,000 extra for those turnkeys, which makes no sense whatsoever. Will the Minister confirm what we already know, namely, that there will be no mechanism put in place to ensure that the developers of these apartments are forced by the Government to reduce the sale price by the VAT reduction to whoever the purchasers are?

Sentiment score: -0.01

The Minister is absolutely correct. There are planning permissions for 40,000 apartments that have not yet been commenced. The Minister claimed that this measure is to activate those permissions. Why then provide a VAT reduction in respect of apartments under construction? All the expenditure being provided for this measure next year is for apartments that are currently being built. It takes approximately two years to build out an apartment development. That means €250 million of this money for next year will go on apartments which are under constructions and for which there already are buyers. In many cases, because they have forward purchase agreements, the prices have been fixed. The Government will then spend €350 million on it next year, and a large proportion of that money will also go on apartments that are currently under construction. Those apartments are being built. If the Government did not introduce this measure, those apartments would be built and bought by funds or AHBs. It is simply not the case that next year's expenditure or the bulk of that for the year after is about activation. At a press conference earlier, the Minister, Deputy Browne, was asked why that is the case. Why, for example, did he not link this measure to a commencement date like tomorrow? I still think it would be a bad policy but it would mean the Government would not be wasting €250 million next year. What did the Minister say? He said he could not do that because it would delay the sale. What utter nonsense. If there was a commencement date of tomorrow, anything commenced before that would not have its sale delayed and the State would not be blowing hundreds of millions of euro that could be spent on the delivery of genuinely affordable homes for working people. I take it from her remarks that the Minister, Deputy McEntee, is confirming that, next year and the year after, the apartments bought by AHBs and local authorities under turnkey agreements for social or cost rental will effectively be captured by this. That means the State will pay an additional €20,000 to €25,000 per unit next year and the year after on top of the price already committed to through the forward purchase agreements. That is utterly bizarre. Let us deal with viability. The Minister, Deputy Browne, gave some figures on viability at his press conference. I do not necessarily accept their veracity but he claims that suburban apartments have a viability gap of €114,000 per unit and that inner-urban apartments have a viability gap of €156,000. That is the gap that has to be closed. How in God's name will a VAT reduction of €20,000 close either of those? The maths do not add up. I do not know which Deputy before me made this point, but it was a point well worth making. This was not a commitment in the programme for Government, unlike, for example, the promise to progressively increase the renter's tax credit, a promise that was broken today. It is a specific demand of a specific lobbyist who came into Government Buildings and requested it. The Minister is right this is one of three measures. That is the one point on which I will agree with her. The Government is allowing apartment developers to dramatically reduce the size of and the light and storage options in apartments and to dramatically reduce the quality of the lives of those who occupy them. It is also about to introduce legislation that will allow not only for those apartments that come on stream to come in at the top of the market but also to reset to full market value every six years. Hines has told us its turnover of tenants is 25% every year. This means that means in exchange for an extra €25,000 going into a developer's pocket, that developer will build a volume - we do not know how many, but I agree with colleagues that it will not be a large volume - of smaller, darker, far more expensive homes. If anybody tells me that is a credible solution to the housing crisis, they clearly do not understand what is happening. The worst thing of all - I say this with the greatest of respect for the Minister opposite and the people in her constituency who cannot get affordable homes - is that the only apartments which may arise from this cocktail of measures will be very expensive ones in limited areas of Dublin, namely the Docklands and Sandyford, for example, in which very high rents of €3,000-plus obtain. Nobody will be building anything in the Minister's constituency on the basis of these measures because that is not what those in the institutional investment and apartment developer community are interested in. They want a small amount of expensive, high-end and high-density apartments in Dublin, and maybe the Docklands area of Cork. Every other county in the State will get nothing. The Government did not increase the social housing targets beyond previous commitments. It did not increase the affordable cost rental or purchase targets in order to fix those schemes and make them genuinely affordable. It is doing nothing to ensure an adequate supply of good-quality, private homes in every county in the State for working people to purchase by supporting and activating the small and medium-size builder-developer sector. Michael O'Flynn, one of the most respected builder-developers in the State, has stated over and over that he does not want tax breaks. He wants a viable business model to build homes for working people to buy. That is not in this budget. This will not work. The only beneficiaries are very large developers. I do not understand how somebody can defend the indefensible policy in front of us today.

Sentiment score: 0.10