I move:
That Seanad Éireann, noting that, since it took office, this Government has:
– abolished the first time buyer's grant;
– raised VAT on house purchases;
– presided over a tripling in the price of houses;
– and allowed the numbers awaiting local authority housing to rise to 52,000 households, comprising over 100,000 individuals
condemns the failure of the Government to adequately fund local government which forces local authorities to set punitively high development levies which will result in higher prices for new homes, hinder the development of new business and damage the competitiveness of the economy.
We have tabled this motion this evening out of frustration at a system which shamelessly and relentlessly targets the less well-off in our society. Rising house prices and the increasing lack of affordability of both rented and owner-occupied houses threatens general economic growth. A lack of affordable housing also detracts from the quality of life of people on modest or low incomes and on those with special housing needs, such as older people and people with a disability.
There is clearly a need for a strong housing policy response to the current housing problem. In a binge of outrageous pre-election spending in 2001, the Government blatantly squandered the riches of the Celtic tiger years in an orgy of excess and is now squandering the trust of the taxpayer and bolstering the haves at the expense of the have nots. Robin Hood may have robbed the rich to feed the poor but what will future generations say about this Government, which will go down in history as having repeatedly leaned on the less well-off to make up for its financial ineptitude? House buyers who have already lost the first-time buyer's grant are now facing punitive development levies which will see many priced out of the housing market, driving housing lists to even higher levels and forcing more people to become homeless.
This Government is nothing if not consistent. Stealth taxes, the supposedly hidden enemy of all beleaguered taxpayers, are now being followed by new development levies which are, in effect, the return of property tax by the back door. If the Government had its way, more people would find themselves unable to buy a back door, let alone a complete house. These levies will be the final nail in the coffin for house purchasers.
Currently, the Exchequer siphons off 41% of the purchase price of every new house sold. That amounts to nothing more than extortion by this Government. It is a disgrace and people have condemned what the Government is doing in terms of the high taxes it takes from house property. Based on an average new house price of €259,912, the revenue accruing to the State, including VAT and stamp duty, on each property is €116,381. The introduction of the new development levy will impose an additional €8,000 on each new house. In October of this year, the average house price nationally was up 14% on the same period last year and up 200% on 1996 prices. Nationwide, new houses are up by 12% on last year while the price of second hand homes is up a staggering 17%. The gap between prices in Dublin and those outside Dublin is now seven times higher than when the coalition took office.
Development levies in some local authorities are being increased by anything up to 300%. Currently, development charges attached to planning applications can be appealed to An Bord Pleanála but there is no appeal procedure in place to allow developers or house purchasers to challenge the charges being imposed by local authorities. Local authority charges are an off-shoot of inadequate Government funding for local authorities and follow such stealth taxes as bin charges, parking rates and water charges on business and farmers. Owners of homes in the countryside face bills of up to €600 every two years to provide certification that their septic tanks have been emptied by a proper contractor. That is something on which the Minister for the Environment, Heritage and Local Government, Deputy Cullen, has spoken in detail in recent times.
Yesterday's announcement, or conjuring trick, by the Government in respect of increased funding for local authorities can at best be welcomed and at worst dismissed as another pre-local election stunt. Either way, this U-turn by the Government, which comes in the wake of pressure from Fine Gael and other Opposition parties, does not mean that local authorities will be able to avoid imposing heavy charges on the general public. The Government is still telling the local authorities that if they are short of funds, they have to raise the revenue themselves.
In my county, the Longford county executive of the IFA is meeting tonight with all public representatives in County Longford to encourage them to oppose the Government's development charges. Farmers are particularly angered at the proposal instructing local authorities to seek between €10 and €20 per square metre on farm buildings of more than 250 square metres in development charges at a time when all agricultural enterprises are in a depressed state.
The Government is also proposing a charge of €500 to €600 per hectare for forestry. The president of the Irish Farmers Association has rejected the new local authority planning charges for farm buildings, stating that they will impose significant and unjust cost increases on farmers and their families for necessary farm building work. He also noted that building work is needed to upgrade farmyard facilities to comply with environmental cross-compliance and local authority by-laws and secure commercial viability following the Luxembourg CAP reform agreement. More power to the IFA, Macra na Feirme, the GAA and other organisations which are vocal in their opposition to the development charges.
The Government is forcing local authorities to seek taxation by the back door and chase all options to raise money through stealth taxes and increased direct charges and rates to meet their funding shortfalls, which are a direct result of the Government's benchmarking deal. The proposed new charges will add significantly to housing costs in rural areas, with the proposed charge for rural housing as high as €12,000.
The rent allowance supplement has become another victim of this cavalier attitude to the less well-off. Applicants must be renting for at least six months before they can apply for this allowance, creating another bureaucratic stranglehold on the needy. Mr. McCreevy could be compared to the artful dodger and his Government colleagues will long be remembered as—