Home Building Finance Ireland Bill 2018: Report Stage (Resumed) and Final Stage

Debate resumed on amendment No. 1:
In page 10, line 13, after “interest” to insert “including lower interest rates and longer maturities”.
-(Deputy Eoin Ó Broin)

There was considerable confusion around the effect of this amendment when it was last debated in the Chamber on 2 October. This confusion arose when it was suggested that amendments tabled on Report Stage would allow Home Building Finance Ireland, HBFI, to lend to builders and developers at lower interest rates and longer maturities to fund social, cost rental and affordable homes. I must clarify to the Chamber in the strongest possible terms that these amendments will have no such effect.

The reality is that this amendment only addresses the rates and terms on which HBFI is able to borrow money on the market to fund its operations. It has no bearing on the rates and terms that HBFI may attach to lending that it provides to builders or developers. This is evidenced by the fact that this amendment is directed at section 13 of the current Bill which is concerned exclusively with HBFI's powers of borrowing. As a result, it is clear that, if passed, this amendment would have no practical effect. As my colleague, the Minister of State, Deputy O'Donovan, pointed out, HBFI can raise debt from the capital markets at low interest rates and along with sureties, provided the capital markets are willing to provide funding on such terms. I must, therefore, oppose the amendment.

I understand, separately, the important point made by Deputy Ó Broin in previous debates regarding the Home Building Ireland scheme. In contrast to HBFI, it is important to note the Rebuilding Ireland home loan scheme is classified as within Government and provision for its funding must be found from the Housing Finance Agency with a resulting impact on gross Government debt. Under EUROSTAT rules it is impossible for HBFI to be state aid compliant and ensure that its activities are treated as off-balance sheet transactions if it lends to builders at interest rates lower than those available on the market. In general the EUROSTAT classification of HBFI's activities will be threatened if conditions on HBFI's lending are imposed, particularly where those conditions require HBFI to act in a manner that would not be consistent with other operators in the market.

Nobody is suggesting that HBFI should lend at rates below market rates. I refer to giving HBFI the flexibility that it may act and lend at more competitive rates but still allowing for a commercial rate of return. The Minister of State's point does not deal with that. On the substantive point, I would much prefer to be tabling amendments to section 7. I am prohibited from doing that because it would place a charge on the State. Placing these amendments in this section has a purpose.

It at least indicates in the legislation the desire of the Oireachtas for Home Building Finance Ireland to provide such loans. If we are saying we would like it to engage in such practices to try to provide more competitive loans for smaller builders for a variety of projects, including them would have an impact. The legislation states very clearly that when Home Building Finance Ireland is established, it is something the Oireachtas wants it to do. If the Minister is willing to table his own amendments in the Seanad to section 7, I would have no difficulty with them. However, it is my understanding he will not do so. Therefore, section 13 is the only place where I am allowed to table such amendments. I will be pressing them.

Deputy Michael McGrath has spoken twice already to amendment No. 1, as has the Minister of State; therefore, he cannot respond.

The Ceann Comhairle has very good records.

I imagine the Bill in its existing form permits HBFI to borrow from the market and presume it would choose to get the best terms on debt as possible. If Deputy Ó Broin can convince me that there is a need for amendment No. 1, I will remain open to considering it. I imagine any company would seek to find the best rates available in the market as not to do so would be grossly irresponsible.

The establishment of HBFI is very welcome but long overdue. I genuinely hope it is not just another announcement to deal with the housing crisis only for us to be back here in 12 months, with very little having been delivered, as, unfortunately, has been the case with its precursor, the Activate Capital programme, for which there was a pot of €550 million. It has contributed to the construction of just 3,600 houses since its creation in 2016. I hope the HBFI will not be a similar flop. I very much welcome its establishment as it suits the banks not to lend for the purpose of building houses because most of thelm still have a considerable number of distressed properties in their portfolios. The longer the crisis continues, the greater the value of those properties will be, leaving the banks' balance sheets better off. It is not in their interests to loan money to build developments. HBFI can play a critical role in that regard. The institution will not tackle construction costs. If we take capital out of the equation in counties such as the one I represent, Kerry, the cost of developing a greenfield site, including levies, development site costs, planning and so on, is greater than the purchase price of a property available on the market. Until that issue is resolved and we do something about site development costs and levies, etc., there will be very little building, particularly in the private sector, in counties such as Kerry.

I hope this will not be another failed entity and that it will begin to tackle what is a major crisis. I hope it will start to make inroads into the 120,000 people on social housing waiting lists. I look forward to receiving regular updates on the performance of HBFI. We will play an active role in trying to ensure it will do the job it is being set up to do.

Amendment put:
The Dáil divided: Tá, 34; Níl, 81; Staon, 1.

  • Boyd Barrett, Richard.
  • Brady, John.
  • Broughan, Thomas P.
  • Buckley, Pat.
  • Collins, Joan.
  • Connolly, Catherine.
  • Coppinger, Ruth.
  • Crowe, Seán.
  • Cullinane, David.
  • Daly, Clare.
  • Doherty, Pearse.
  • Ellis, Dessie.
  • Ferris, Martin.
  • Funchion, Kathleen.
  • Healy, Seamus.
  • Kelly, Alan.
  • Mitchell, Denise.
  • Murphy, Catherine.
  • Murphy, Paul.
  • O'Brien, Jonathan.
  • O'Reilly, Louise.
  • O'Sullivan, Maureen.
  • Ó Broin, Eoin.
  • Ó Caoláin, Caoimhghín.
  • Ó Laoghaire, Donnchadh.
  • Ó Snodaigh, Aengus.
  • Pringle, Thomas.
  • Quinlivan, Maurice.
  • Ryan, Brendan.
  • Ryan, Eamon.
  • Smith, Bríd.
  • Stanley, Brian.
  • Tóibín, Peadar.
  • Wallace, Mick.

Níl

  • Aylward, Bobby.
  • Bailey, Maria.
  • Barrett, Seán.
  • Brassil, John.
  • Breen, Pat.
  • Brophy, Colm.
  • Browne, James.
  • Bruton, Richard.
  • Burke, Peter.
  • Butler, Mary.
  • Byrne, Catherine.
  • Cahill, Jackie.
  • Calleary, Dara.
  • Canney, Seán.
  • Cannon, Ciarán.
  • Carey, Joe.
  • Casey, Pat.
  • Cassells, Shane.
  • Chambers, Jack.
  • Collins, Michael.
  • Corcoran Kennedy, Marcella.
  • Coveney, Simon.
  • Creed, Michael.
  • Curran, John.
  • D'Arcy, Michael.
  • Daly, Jim.
  • Deasy, John.
  • Deering, Pat.
  • Doherty, Regina.
  • Donnelly, Stephen S.
  • Dooley, Timmy.
  • Durkan, Bernard J.
  • English, Damien.
  • Farrell, Alan.
  • Fitzgerald, Frances.
  • Fitzpatrick, Peter.
  • Flanagan, Charles.
  • Fleming, Sean.
  • Griffin, Brendan.
  • Halligan, John.
  • Harris, Simon.
  • Harty, Michael.
  • Haughey, Seán.
  • Healy-Rae, Danny.
  • Healy-Rae, Michael.
  • Kelleher, Billy.
  • Kyne, Seán.
  • Lawless, James.
  • Madigan, Josepha.
  • Martin, Micheál.
  • McConalogue, Charlie.
  • McGrath, Mattie.
  • McGrath, Michael.
  • McGuinness, John.
  • McHugh, Joe.
  • McLoughlin, Tony.
  • Mitchell O'Connor, Mary.
  • Moynihan, Aindrias.
  • Moynihan, Michael.
  • Murphy O'Mahony, Margaret.
  • Murphy, Eoghan.
  • Murphy, Eugene.
  • Naughton, Hildegarde.
  • Neville, Tom.
  • Noonan, Michael.
  • O'Brien, Darragh.
  • O'Callaghan, Jim.
  • O'Connell, Kate.
  • O'Donovan, Patrick.
  • O'Dowd, Fergus.
  • O'Keeffe, Kevin.
  • O'Loughlin, Fiona.
  • O'Rourke, Frank.
  • Phelan, John Paul.
  • Rabbitte, Anne.
  • Ring, Michael.
  • Rock, Noel.
  • Ross, Shane.
  • Scanlon, Eamon.
  • Smith, Brendan.
  • Smyth, Niamh.

Staon

  • Nolan, Carol.
Tellers: Tá, Deputies Eoin Ó Broin and Pat Buckley; Níl, Deputies Seán Kyne and Tony McLoughlin.
Amendment declared lost.

I move amendment No. 2:

In page 10, between lines 15 and 16, to insert the following:
“(3) Such bonds, debentures and other securities may be used for the purposes of delivering social, cost rental and affordable purchase homes and for the funding of remedial works on multi-unit developments where latent defects have been discovered.”.

Is the amendment being pressed?

Amendment put:
The Dáil divided: Tá, 35; Níl, 82; Staon, 0.

  • Boyd Barrett, Richard.
  • Brady, John.
  • Broughan, Thomas P.
  • Buckley, Pat.
  • Collins, Joan.
  • Connolly, Catherine.
  • Coppinger, Ruth.
  • Crowe, Seán.
  • Cullinane, David.
  • Daly, Clare.
  • Doherty, Pearse.
  • Ellis, Dessie.
  • Ferris, Martin.
  • Funchion, Kathleen.
  • Healy, Seamus.
  • Kelly, Alan.
  • Kenny, Martin.
  • Mitchell, Denise.
  • Murphy, Catherine.
  • Murphy, Paul.
  • Ó Broin, Eoin.
  • Ó Caoláin, Caoimhghín.
  • Ó Laoghaire, Donnchadh.
  • Ó Snodaigh, Aengus.
  • O'Brien, Jonathan.
  • O'Reilly, Louise.
  • O'Sullivan, Maureen.
  • Pringle, Thomas.
  • Quinlivan, Maurice.
  • Ryan, Brendan.
  • Ryan, Eamon.
  • Smith, Bríd.
  • Stanley, Brian.
  • Tóibín, Peadar.
  • Wallace, Mick.

Níl

  • Aylward, Bobby.
  • Bailey, Maria.
  • Barrett, Seán.
  • Brassil, John.
  • Breen, Pat.
  • Brophy, Colm.
  • Browne, James.
  • Bruton, Richard.
  • Burke, Peter.
  • Butler, Mary.
  • Byrne, Catherine.
  • Byrne, Thomas.
  • Cahill, Jackie.
  • Calleary, Dara.
  • Canney, Seán.
  • Cannon, Ciarán.
  • Carey, Joe.
  • Casey, Pat.
  • Cassells, Shane.
  • Chambers, Jack.
  • Collins, Michael.
  • Corcoran Kennedy, Marcella.
  • Coveney, Simon.
  • Creed, Michael.
  • Curran, John.
  • Daly, Jim.
  • Deasy, John.
  • Deering, Pat.
  • Doherty, Regina.
  • Donnelly, Stephen S.
  • Dooley, Timmy.
  • Durkan, Bernard J.
  • English, Damien.
  • Farrell, Alan.
  • Fitzgerald, Frances.
  • Fitzpatrick, Peter.
  • Flanagan, Charles.
  • Fleming, Sean.
  • Griffin, Brendan.
  • Halligan, John.
  • Harris, Simon.
  • Harty, Michael.
  • Haughey, Seán.
  • Healy-Rae, Danny.
  • Healy-Rae, Michael.
  • Kelleher, Billy.
  • Kyne, Seán.
  • Lawless, James.
  • McConalogue, Charlie.
  • McGrath, Finian.
  • McGrath, Mattie.
  • McGrath, Michael.
  • McGuinness, John.
  • McHugh, Joe.
  • McLoughlin, Tony.
  • Madigan, Josepha.
  • Martin, Micheál.
  • Mitchell O'Connor, Mary.
  • Moynihan, Aindrias.
  • Moynihan, Michael.
  • Murphy O'Mahony, Margaret.
  • Murphy, Eoghan.
  • Murphy, Eugene.
  • Naughton, Hildegarde.
  • Neville, Tom.
  • Noonan, Michael.
  • O'Brien, Darragh.
  • O'Callaghan, Jim.
  • O'Connell, Kate.
  • O'Donovan, Patrick.
  • O'Dowd, Fergus.
  • O'Keeffe, Kevin.
  • O'Loughlin, Fiona.
  • O'Rourke, Frank.
  • Phelan, John Paul.
  • Rabbitte, Anne.
  • Ring, Michael.
  • Rock, Noel.
  • Ross, Shane.
  • Scanlon, Eamon.
  • Smith, Brendan.
  • Smyth, Niamh.

Staon

Tellers: Tá, Deputies Eoin Ó Broin and Pat Buckley; Níl, Deputies Seán Kyne and Tony McLoughlin.
Amendment declared lost.
Bill received for final consideration.
Question proposed: "That the Bill do now pass."
Question put:
The Dáil divided: Tá, 105; Níl, 8; Staon, 1.

  • Aylward, Bobby.
  • Bailey, Maria.
  • Barrett, Seán.
  • Brady, John.
  • Brassil, John.
  • Breen, Pat.
  • Brophy, Colm.
  • Broughan, Thomas P.
  • Bruton, Richard.
  • Buckley, Pat.
  • Butler, Mary.
  • Byrne, Catherine.
  • Byrne, Thomas.
  • Cahill, Jackie.
  • Calleary, Dara.
  • Canney, Seán.
  • Cannon, Ciarán.
  • Carey, Joe.
  • Casey, Pat.
  • Cassells, Shane.
  • Chambers, Jack.
  • Collins, Michael.
  • Corcoran Kennedy, Marcella.
  • Coveney, Simon.
  • Creed, Michael.
  • Crowe, Seán.
  • Cullinane, David.
  • Curran, John.
  • D'Arcy, Michael.
  • Daly, Clare.
  • Daly, Jim.
  • Deasy, John.
  • Deering, Pat.
  • Doherty, Regina.
  • Donnelly, Stephen S.
  • Dooley, Timmy.
  • Durkan, Bernard J.
  • Ellis, Dessie.
  • English, Damien.
  • Farrell, Alan.
  • Ferris, Martin.
  • Fitzgerald, Frances.
  • Fitzpatrick, Peter.
  • Flanagan, Charles.
  • Fleming, Sean.
  • Griffin, Brendan.
  • Halligan, John.
  • Harris, Simon.
  • Haughey, Seán.
  • Healy-Rae, Danny.
  • Healy-Rae, Michael.
  • Kelleher, Billy.
  • Kelly, Alan.
  • Kenny, Martin.
  • Kyne, Seán.
  • Lahart, John.
  • Lawless, James.
  • MacSharry, Marc.
  • Madigan, Josepha.
  • Martin, Micheál.
  • McConalogue, Charlie.
  • McGrath, Mattie.
  • McGrath, Michael.
  • McGuinness, John.
  • McHugh, Joe.
  • McLoughlin, Tony.
  • Mitchell O'Connor, Mary.
  • Mitchell, Denise.
  • Moynihan, Aindrias.
  • Moynihan, Michael.
  • Munster, Imelda.
  • Murphy O'Mahony, Margaret.
  • Murphy, Catherine.
  • Murphy, Eoghan.
  • Murphy, Eugene.
  • Naughton, Hildegarde.
  • Neville, Tom.
  • Nolan, Carol.
  • Noonan, Michael.
  • O'Brien, Darragh.
  • O'Callaghan, Jim.
  • O'Connell, Kate.
  • O'Donovan, Patrick.
  • O'Dowd, Fergus.
  • O'Loughlin, Fiona.
  • O'Reilly, Louise.
  • O'Rourke, Frank.
  • Ó Broin, Eoin.
  • Ó Laoghaire, Donnchadh.
  • Ó Snodaigh, Aengus.
  • Phelan, John Paul.
  • Quinlivan, Maurice.
  • Rabbitte, Anne.
  • Ring, Michael.
  • Rock, Noel.
  • Ross, Shane.
  • Ryan, Brendan.
  • Ryan, Eamon.
  • Scanlon, Eamon.
  • Sherlock, Sean.
  • Smith, Brendan.
  • Smyth, Niamh.
  • Stanley, Brian.
  • Tóibín, Peadar.
  • Wallace, Mick.

Níl

  • Boyd Barrett, Richard.
  • Collins, Joan.
  • Connolly, Catherine.
  • Coppinger, Ruth.
  • Healy, Seamus.
  • Murphy, Paul.
  • Pringle, Thomas.
  • Smith, Bríd.

Staon

  • O'Sullivan, Maureen.
Tellers: Tá, Deputies Seán Kyne and Tony McLoughlin; Níl, Deputies Richard Boyd Barrett and Paul Murphy.
Question declared carried.