I will now take Leaders' Questions under Standing Order 36. Again, I ask Members for their co-operation in relation to the time limits.
Ceisteanna ó Cheannairí - Leaders' Questions
Le beagnach seachtain anuas tá deireadh tragóideach agus cuibhdhe tagtha le polasaí páirtí an Tánaiste agus polasaí an Rialtais. Tá mórchuid na tithe in eastáit chónaithe sa Stát ceannaithe ag ciste infheistíochta idirnáisiúnta. Le beannacht an Rialtais seo, ní íocann na cistí seo cáin ar bith ar an proifid a dhéanann siad. Le beannacht an Rialtais seo, tá siad ag glasáil teaghlaigh agus oibrithe amach as úinéireacht tithe.
Last weekend, Round Hill Capital, an international investment fund, bought up most of a newly-built estate, Mullen Park, County Kildare. After years of working and saving, first-time buyers who had managed to save a deposit were told last week that 135 of these family homes were no longer for sale and had been sold to an international investment fund. Yesterday it was reported the same fund had bought an entire Dublin estate, Bay Meadows, of newly-built family homes and it will now rent these homes at a staggering €1,975 per month. The response of the Tánaiste's Government over the past few days would suggest that this is something new, something that has fallen out of the sky. This has been happening for years, and well the Tánaiste knows it. It happened in Dundrum and in Leopardstown, where a single fund bought 295 properties. It happened in Lucan last year, where Cairn Homes, one of the biggest developers in the State, sold 229 properties to a single investment fund and it has happened in many other areas.
Not only have the Tánaiste and his party's policies facilitated this, they have actually encouraged it and incentivised it through the taxation structure these funds enjoy. They pay no corporation tax, no capital gains tax when they sell the properties and little stamp duty. They pay no tax on the sky-high rental income they charge people in this city and beyond. The Tánaiste's party gave these funds the tax advantage, it designed it with the support of Fianna Fáil. They have created this situation where these international investment funds are snapping up family homes and locking first-time buyers out of the market. That is the reality. These parties have frustrated the hopes, dreams and aspirations of many workers and families who aspire to own their own homes.
I have been raising the issue of the tax advantages and exemptions enjoyed by these funds year after year. As late as last year, I submitted amendments to the Finance Bill so the Government would examine how these tax breaks are impacting on first-time buyers and how they are pushing up house prices. However, Fine Gael, Fianna Fáil and Green Party Deputies all walked in to that committee and voted against even looking at this issue. Every one of them opposed looking at this area and voted to keep the status quo and to ensure these funds enjoyed the tax exemptions they have been able to utilise to lock and push first-time buyers out of the market. Now that the horse has bolted, the Government is scrambling to contain the damage it has caused. In its end of year results in February, Glenveagh Properties, one of the biggest developers in the State, stated its strategy is to sell 43% of properties to these types of funds, and this is growing and gathering pace. The reports this morning of the squabbles in Government parliamentary parties, of Fine Gael and Fianna Fáil taking swipes at each other, finger-pointing and blaming each other, are simply not good enough. Both parties are to blame but they must now grow up, take responsibility for their actions and undo the damage they have caused. Will the Tánaiste do what Sinn Féin has argued for over the years and take away the tax breaks and advantages Fine Gael gave to these funds so first-time buyers have a chance in the housing market? What actions will the Government take after the horse has bolted to end the block purchasing of family homes by these funds?
Ba chóir go mbeadh gach duine ábalta úinéireacht a bheith aige nó aici ar a theach nó a teach cónaithe agus ní mór dúinn an deis sin a thabhairt do dhaoine. Is muidne an Rialtas atá i bhfabhar úinéireacht ar thithe cónaithe agus creidim gur maith an rud é go mbeadh úinéireacht ag duine ar a mhian nó a mian féin agus ar a theach nó a teach cónaithe féin. I am somebody who strongly believes in home ownership. This is a Government that believes in home ownership. We think it is a good thing that people should be able to own their own home, should be able to acquire private property, that they should have an asset they can borrow against, extend if their family grows and something they can pass on to their children when they themselves pass on. Given his party's policies I am not sure Deputy Doherty believes that but we will leave it for another day. At the moment in Ireland, somewhere between 65% and 70% of people own their own home. We in Government want that to be a reality for people who are in their 20s and 30s now, so they have the same opportunity to own their own home as their parents did. That is why we have brought in things like the help-to-buy grant, giving people tax back to help them raise a deposit, it is why we have brought in the rebuilding Ireland home loan, to help people who could not get a mortgage from the banks, it is why we are investing in infrastructure to free up land for housing development and it is why we have established the Land Development Agency.
What happened in Maynooth and in Hollystown in my constituency is not consistent with that policy. It is not consistent with a Government policy that promotes supply and home ownership. We will act on it, and as I speak the Minister for Housing, Local Government and Heritage, Deputy Darragh O'Brien, and the Minister for Finance, Deputy Donohoe, are developing proposals for a solution. It must be a solution that resolves this problem but also one which does not have unintended consequences. We all know that when we pass a law or adopt a policy, there is always the law of unintended consequences and we may do something in good faith to solve a problem but actually create another one. That is why the Ministers need a little bit of time - and only a little bit - to come up with a workable solution.
Investment funds generally have a role to play. There are housing developments in this city, mainly apartment blocks, mainly high-density developments, which would not have been built if not for finance from investment funds. Such developments were not able to get funding from the banks. If they had not been built we would have fewer apartments, higher rents, higher prices and perhaps even more people in homelessness. We, therefore, need to get the balance right. People need places to rent, and well-managed developments to rent from. As things stand at the moment, less than 1% of the housing stock in Ireland is owned by investment funds and that is much lower than would be the case in most other developed countries. However, their correct role is to finance the construction of developments, not to swoop in and buy housing estates or developments that are already substantially complete. That is what we need to change and what the Government intends to change with the actions it will take in the coming weeks.
On the tax position, what Deputy Doherty said was misleading. He listed a whole bunch of taxes these investment funds did not pay and not the ones they do. He tried to create the false impression no tax is paid by investment funds - that is not the case. They pay tax on the dividend income and that is how these investments are structured. Furthermore, there have already been changes. There were changes in the budget last year, changes in the Finance Bill adopted and there may well be further changes required.
Fine Gael created this system, it supported it, it cheerled for it, it rolled out the red carpet for these funds to come in, it turbocharged them and now they are, and have been for years, snatching properties from first-time buyers. The Tánaiste mentioned taxes and dividend withholding taxes. Pension funds do not pay them. The Tánaiste must get real here. We have been raising this issue year after year after year. Indeed, it has not just been us. Last February, the Department of Finance argued for increasing taxes on these funds. We can see from freedom of information requests that an official did so. However, the Minister voted against that when we put forward that type of proposal. In 2019, the Department carried out a report which said these funds were buying big swathes of property, talked about locking people out of home ownership and the rental market. Despite this, Fine Gael did nothing bar cheerlead for these funds. The question, therefore, is what is the Government is going to do. The Tánaiste said we should give it a little time. For six years we have been raising the fact that Government parties have been on the side of these funds over ordinary first-time buyers who are locked out of the market.
Maynooth is not a flash in the pan. As I said, this has been happening in Dundrum, Leopardstown, Lucan, Lusk and many other areas for years. Last year more than 25% of all purchases were after construction. That is hundreds of millions of euro and the Tánaiste's Government cheerled for it. He stood in this Chamber just two weeks ago and said he believes it would be wrong to restrict these funds.
I had not been looking at the clock so the Deputy has benefited
That is a further misrepresentation. I did not say "restrict". I said it would be wrong to ban them outright and I explained the role they have to play and have had to play. I was interested to hear Deputy Ó Broin on "Prime Time" only the other night, for the first time ever that I have heard him, advocating for private investment and long-term investment by pension funds in housing. It is interesting to see a Sinn Féin spokesperson make that argument and I welcome him doing so.
Let there be no doubt that this Government is on the side of home ownership. We want people to be able to own their own home.
That does not appear to be true.
We want people to be able to have a private property in which they can live and raise their family before passing it to their children when they pass on themselves. That is not the policy of Sinn Féin or many of the left-wing parties in this Chamber, although they try to pretend otherwise. What happened in Maynooth and Hollystown is not right. We do not want investment funds in any form coming in and buying substantially complete developments that could have been bought by first-time buyers, upgraders or even approved housing bodies, but they have a role to play in financing high-density developments that might otherwise not be built.
The Government has become what can only be described as a circular firing squad. Fianna Fáil Deputies are blaming Fine Gael for the housing crisis and Fine Gael Deputies are blaming Fianna Fáil. I would like to settle the dispute between the coalition partners because both points of view are correct. Fianna Fáil crashed the housing market the first time around and Fine Gael then let vulture funds loose on the carcase for a decade with tax incentives and fast-track planning. Now both parties have joined forces in government and have been destroying the housing market.
Two weeks ago, my colleague, Deputy Cian O'Callaghan, stood in this House and told the Tánaiste that 435 apartments in Ashtown, Dublin 15, had been bought in bulk by an investment fund. He expressed concern than an entire generation was being locked out of home ownership and asked the Tánaiste to act immediately to stop funds bulk-buying homes. His response was to accuse the Deputy of being "ideological" and to say the Government had no plans to introduce legislation to rein in investment funds.
If we fast-forward two weeks, another global fund has gobbled up more homes. This time it is 135 homes in Maynooth. During Leaders' Questions yesterday, the Taoiseach professed surprise about this development. He said it was a new departure and that usually funds confine themselves to hoarding properties in cities, not suburban areas. Does the Taoiseach not think young people in Dublin and other cities deserve to own a home? Does he believe the mass acquisition of homes by funds is somehow okay as long as they restrain their purchases to every new build in Dublin and other urban areas? In any event, the Taoiseach was wrong. These funds have been block-buying estates and apartment blocks, and now second-hand homes, in urban areas and the commuter belt. They have been doing this for some time.
Since 2018, such funds have spent €4 billion on residential property in this country. Did anybody in government even notice? The Tánaiste might not understand the Social Democrats ideology but it is really simple. We believe ordinary workers on average salaries should be able to own their own home. We are not disaster capitalists. We do not want to see young people spend their entire lives paying extortionate rents to cuckoo funds that pay very little or almost zero tax on investments. That is the ideology of the Tánaiste and that of Fianna Fáil. Tax loopholes and sweetheart deals for developers and investment funds while ordinary workers and families are sacrificed on the altar of greed and profit is just not acceptable.
Two weeks ago, the Tánaiste was disinterested in funds hoovering up the country's limited housing supply.
The Deputy is over her time.
Does he now deign to care about that? If he does, what will he do about it? Talk is cheap so what action will he take?
With the greatest respect to the Deputy, it is the ideology of everybody in this House that people who work hard, with a decent average or lower than average income, should be able to buy their own home. It is the case that in this country, 65% to 70% of people own their own home. That was not achieved by the Social Democrats; that has been a feature of long-standing policy by Governments led by Fianna Fáil and Fine Gael. We must ensure that can be a reality for people now in their 20s and 30s, which very clearly it is not.
What is ideologically extreme is the view from some, including, as I understand it, the Social Democrats, that we should have outright bans on some forms of housing and housing investment. That would be a mistake as there would be less housing as a consequence of that. When ideology is put over practicality, we end up with those kinds of results. If that is the policy of the Deputy's party, it is wrong. I nonetheless agree with the Deputy that the objective of all parties in this House should be to make home ownership a reality for people. It should be a reality for people in their 20s and 30s, as it has been for generations that came before.
The responsibility for dealing with the housing crisis lies with the Government now. It does not matter about the past as Fianna Fáil, Fine Gael and the Green Party, now in government together, must work to solve this crisis. In areas like homelessness, we are making good progress and although the number of people in homelessness is still too high, it has been falling for some time now. That is largely down to the Housing First policy initiated by the former Minister with responsibility for housing, Deputy Coveney, and brought through by former Deputy and Minister, Eoghan Murphy, during his time in that ministerial office.
We have seen a substantial increase in the volume of social housing built in recent years in Ireland. There were as few as 600 units built in 2016 and there were up to 6,000 units built in 2019. The rate of building has been hit by the impact of the pandemic but we are heading to the target of providing 12,000 social houses per year. A large proportion of housing now being built in Ireland every year is being built by the State. I do not remember the last time such a percentage of housing being built was social housing. It often goes without comment that so much of the housing now being built in Ireland is social housing. It may be as much as half and the Deputy refuses to acknowledge that.
Investment funds have an appropriate role, which is to finance developments that might not otherwise happen, therefore providing supply that would be lost otherwise. There are people such as developers and construction companies trying to build homes who find it hard to get finance to build development, particularly high-density and apartment developments, and that is where investment funds may have a role to play. We all agree that the cases in Maynooth and Hollystown exemplify the wrong approach, where funds bought most of a substantially complete estate, making it impossible for first-time buyers, upgraders, the local authority or approved housing bodies to do so. That is what we are seeking to change.
It is extraordinary that the Tánaiste did not seem to be aware of this happening right under his nose. Two weeks ago, he denied this was the case or that any action was needed. Yesterday, the Taoiseach also seemed to be taken by surprise by this.
This evening, the Dáil will debate Second Stage of the Social Democrats Bill to help end the practice of the State entering into long-term leasing deals with developers and institutional investors instead of building and purchasing social and affordable homes. That is happening but the Taoiseach again seemed to be unaware of this yesterday. We are proceeding with this Bill because, unlike the Government, we recognise there is a serious problem that must be urgently addressed. Fianna Fáil and Fine Gael thought the people would be thrilled when they published their affordable housing Bill and saw €450,000 as the price of an affordable house. The Tánaiste is so out of touch if he thinks that is the case. Prices of €450,000 for a house or €500,000 for an apartment are not affordable by any means.
The Taoiseach told us yesterday he would take action on this. I ask the Tánaiste to spell out if he will support our Bill this evening by introducing the measures in it as a matter of urgency and not simply paying lip service to it.
I may be incorrect but I thought that Bill relates to a different matter, which is the leasing of properties for social housing.
Yes, it does.
That is a different matter.
As I understand it the Government is not opposing that but it is a separate matter and it is wrong to conflate the two.
It is part and parcel of the same thing.
What the Deputy said about affordable housing is a bit misleading. The average home in Ireland changed hands last year for about €270,000. We would envisage that the vast majority of affordable housing scheme properties that are provided would be in and around that figure or lower. There are parts of the country where house prices are high, however, and the false impression and misrepresentation, which is always a tactic the Deputy uses, is to make out that all of the affordable housing scheme houses and apartments will be €400,000. That is not the case at all. Most will be a lot less than that.
The Tánaiste is acting as if the rampage and plunder by cuckoo and vulture funds and investment vehicles - these terms are too polite; they should all just be called bloodsuckers - is some sort of isolated incident or inadvertent mistake that the Government is going to rectify. Why does he not admit the truth? When the Tánaiste was Minister for Transport, Tourism and Sport in the Fine Gael and Labour Party Government, the former Minister, Michael Noonan and his officials from the Department of Finance had 65 meetings in 2013 and 2014 with vulture funds where they invited them in to commence the rampage.
In a deliberate policy, the National Asset Management Agency, NAMA, was told to sell off, which it subsequently did, more than €40 billion worth of land and property assets to these bloodsuckers. They have now moved on to buying up new estates as well. The consequence of that is they are almost entirely pricing ordinary working people out of the market to buy their own homes. We have an extraordinary situation that beggars belief. It is so bad that the Minister for Housing, Local Government and Heritage is describing affordable housing as costing €400,000 or €450,000 when one would need an income in excess of €90,000 or €100,000 to be able to afford the affordable houses, never mind the houses that these people are providing at full market price. We have tents littering the city as a result. We have extortionate rents being charged by these same entities in my area of no less than €2,000 per month and up to €3,000 and €3,500 per month. This is a result of a direct and deliberate - and indeed "ideological" to use the Tánaiste's favourite word - policy of Fine Gael and Fianna Fáil to facilitate, incentivise and encourage these bloodsuckers.
I want to ask the Tánaiste about the next chapter of all of this, which is the Land Development Agency Bill. It is bad enough that this Government and past Governments have let these people rampage and plunder the private housing sector, whether it was for purchase or rental properties. However, with the Land Development Agency, the Government will allow them to rampage and plunder through the entire public land bank. It will invite them in to do the same thing to the public land bank that they have done in the private housing market. The one thing that could help us address this crisis and deliver public and affordable housing to rent and purchase is by doing it ourselves on our land bank. Far from doing that, the Government will invite those entities in to plunder that land bank with the Land Development Agency Bill. I beg the Tánaiste to stop the madness and to start next week by abandoning the Government's plans with the Land Development Agency.
We were in a different situation ten years ago. There were no homes at all being built in Ireland and there was no property at all moving. The policy solutions that might have been required ten years ago may not be the same as we require now and that may change again. Going back to that period ten years ago misunderstands the situation we faced then when no homes were being built and no property was moving, with all the consequences that arose from that.
As I mentioned in my reply to Deputy Shortall, the average price of a home changing hands last year in Ireland was €270,000. The affordable schemes will be pitching around that figure or lower. The Deputy picked the figure of €400,000 or €450,000 but that is at the top end in a particular area and it is misleading to make out that somehow all, most or even many of the affordable housing scheme homes will be priced in that range.
The purpose of the Land Development Agency is to be a major State intervention in the housing market, using public and private land and buying up parts of land where necessary to access that land and develop it for a mix of social, affordable and private for purchase housing. It is a similar model to the one we had with IDA Ireland, for example, in developing industrial parks, which it was then able to use to entice investment and bring about job creation. That is the model we are pursuing and it is a good one.
What happened ten years ago is important because some of us stood up in this House at the time and begged the then Government not to sell off the NAMA portfolio but instead to use it for social and affordable housing. Had the then Government listened, we would not have the crisis we face now. I am appealing to the Government not to do the same with the Land Development Agency.
The Tánaiste said that €450,000 is at the top end but Dublin, Dún Laoghaire, Galway and Cork are not small places. These are the epicentres of the housing crisis and €450,000, €400,000 or €350,000 is not affordable in anybody's language for the vast majority of workers. How could the level of what is affordable be different in different areas anyway? If it is affordable it is based on people's incomes, not on the area they live in so why are there different caps in different areas? It is because the developers in those areas told the Government that under no circumstances should it sell houses as affordable houses for €200,000 or €300,000 if the developers are selling them for €400,000 and €500,000 on the open market. The Government is dancing to the tune of the developers and the result is that affordable housing will not be affordable, even on public land, which the Government will let these vultures, cuckoos and bloodsuckers plunder.
It is great rhetoric but there is little reality behind that. It has been the case since time began that houses and apartments cost different amounts in different places. There are places in the country, in Dublin and in the world-----
Not on public land.
-----where there is a higher demand for housing and where there is a lower demand for housing.
Not on public land.
There are places where there is no public land and in those places the land cost impacts on the price of affordable housing. It is not that affordable housing will only be built on public land. It will also require the acquisition of land in some cases and it may be built on private land as well.
I will go back to the NAMA portfolio, which was not mentioned by the Deputy. It is the crucial point that he left out. Why would somebody leave the crucial point out of one's argument? The crucial point about the NAMA portfolio, properties and land is that they were all held against borrowings. In order to pay down those borrowings the land was sold off. If the land had not been sold off those borrowings would have fallen onto the taxpayer, the Exchequer and the public balance sheet.
They would be generating revenue for the State.
They would have had to be serviced, at the cost of public services or higher taxes for ordinary people.
It is amazing how time flies. Next week is the anniversary of a useful exchange the Tánaiste and I had in the Dáil Chamber in Leinster House during a debate on the lack of strategic airlift capability in this country. I remember being quite heartened by the Tánaiste's response at the time. He specifically said:
Military air transport is a real weakness for us. We are unusual as a country, in that we cannot get to our own troops in Lebanon or in Mali. We rely on commercial aircraft or the defence forces of other countries. That works, but it is suboptimal in my view.
The Tánaiste then went on to say he would get the Chief of Staff to make policy proposals and give formal advice to his office on how best to proceed with this proposed project. Now that a year has passed it is prudent that we should review any progress in this regard because, on the surface at least, there does not appear to have been any major events, bar the pandemic. We have had difficulty getting PPE into the country, we have had troops and citizens stranded overseas and Ireland is transporting a lot of oxygen and oxygen equipment to India, which is a fantastic thing to do. Also, by year end, it is likely that if we have surplus vaccines, we will be transporting them to resource poor countries all over the world.
As an island nation in particular and as a sovereign state, the case that Ireland should have this sovereign independent autonomous capability is self-evident. It is particularly obvious this year because the cost of aircraft is on the floor. We could get a propeller-driven Airbus 295 type aircraft for less than €20 million if it is picked up second hand or almost new. That would represent massive savings for the taxpayer over time and we would not have to be chartering commercial aircraft on an ad hoc basis at very short notice.
Has the Chief of Staff furnished advice or recommendations to the Office of the Tánaiste? Is the Tánaiste prepared to publish the advice of the Chief of Staff for the benefit of the House so we can all see what is contained in it? Is the Government prepared to consider acquiring a strategic airlift aircraft before this year is out, if financial circumstances allow?
I have not changed my mind on this since last year. I still think it is a weakness that our Defence Forces do not have an aircraft available at all times that could get our troops out of Lebanon in a hurry if we had to, carry out a major evacuation of Irish citizens from somewhere in the world if we had to, or to have an aircraft available that could, for example, bring supplies such as personal protective equipment, PPE, into the country at short notice were it needed. We are reliant on commercial operators and other countries to assist us in this regard.
At the time, the Chief of Staff did provide a position paper. That was last year when I was Taoiseach. It was a position paper relating to the acquisition of a strategic airlift aircraft as a concept, but this project was not put forward onto the civil military five-year equipment development plan in the list of identified equipment priorities. I suppose, essentially, there were other priorities that may have had a higher order in the view of the Defence Forces. The publication of that report is a matter for the Minister for Defence. However, as with all capital investment decisions, the requirements of the public spending code and all the various steps required in informing a decision to proceed in a project life cycle would need to be met and set out by the Defence Forces for any such project to proceed to decision-making and public investment in any additional aircraft.
The equipment priorities for the Army, Air Corps and Naval Service are being considered in the context of the lifetime of the White Paper on Defence as part of the capability development and equipment development planning process. The five-year equipment development plan for the continued re-equipment was developed on a civil-military basis and was published in 2020. In this context, the principal aim over the period of the White Paper is to replace and upgrade as required existing capabilities to retain a flexible response for a wide range of operational requirements at home and overseas. Budget 2021 provides a capped allocation of €131 million for investment in defence equipment and barracks and will enable continued investment in major equipment platforms. The increased capital funding for 2021 builds on increased levels of capital expenditure totalling €292 million over the years 2018 to 2020.
With regard to airbase capability, the immediate identified aircraft equipment priorities have been the acquisition of three Pilatus PC-12 aircraft for an intelligence surveillance target acquisition and reconnaissance, ISTAR, role and for two Airbus C295 for maritime patrol replacing the Cessnas. An additional PC-12 was acquired in response to the Covid-19 situation.
I thank the Tánaiste for the response. I welcome the acquisition of two new CASA 295 maritime patrol aircraft in 2023. What I would say is that they are to be for maritime patrol and should be used exclusively for that purpose, especially given the fact we have two ghost ships in Cork because the Naval Service cannot put them to sea because of a crewing problem. We still very much need a utility transport aircraft for this purpose, particularly because the pandemic is still raging throughout the country and the world. We need to have this autonomous flexibility and capability. I would be grateful if the Tánaiste could raise this with the Minister for Defence and consider publishing the advice of the Chief of Staff for the benefit of the entire House.
I will definitely raise it with the Minister for Defence, Deputy Coveney. As I said earlier, my mind has not changed on this matter but I appreciate that funds are limited and there may be other higher priorities, such as, for example, maritime patrol, search and rescue and the modernisation and replacement of existing equipment. Having read the report, although it was a year ago, I do not see any reason it could not be published. I do not recall there being anything of national security sensitivity in it. Again, I would have to leave that to the discretion of the Minister, Deputy Coveney, as to whether it is appropriate to do so.