asked the Minister for the Environment if he will give details of the cost/savings of the changes in the new house grants scheme announced on 30 September.
Ceisteanna—Questions. Oral Answers. - House Grants Scheme.
42.
It is expected that expenditure on this new scheme will over the next three to four years approximately correspond to the savings obtainable through the changes announced in my statement of 30 September.
Will the Minister accept that the scheme he announced with such a fanfare of trumpets as being an injecttion of extra badly needed capital into the house building sector of the construction industry will in the first 12 months take money out of housing construction? By abolishing the mortgage subsidy he will save approximately £3 million. The removal of the traditional sector where the single house was built will represent a saving of about £2 million and the cost of a new scheme will be roughly £3.5 million. The Minister will be saving approximately £1.5 million, taking approximately £1.5 million out of this hard pressed housing sector in this coming 12 months.
I do not accept that. Through a review of housing policy and identification of the need to stimulate activity in the legitimate new house building sector after detailed consultation with the Construction Industry Federation, we introduced this grant to encourage the purchase of new houses irrespective of size and of whether the purchaser had previously purchased a house. We have eliminated the grant-aiding of houses built by black economy builders. The Deputy's colleague, Deputy Fahey from Galway, congratulated me for taking that step not more than half an hour ago. As a result there are certain Exchequer savings, as there should be, because an intolerable situation was in operation over a number of years by successive Governments whereby houses being built by black economy labour were being grant-aided by money provided by the Irish taxpayer. The change we have now made prevents that and instead that money will be funnelled into the grant aiding of houses built by builders in the white economy. It is regrettable that it took so long to bring this about. It was done on foot of a decision announced in the budget this year and it has met with the approval of the Construction Industry Federation. Like so many of the things I have announced over recent months, it has met with the approval of virtually everybody who cared to comment on it with the exception of the spokesman for the Opposition.
The Minister has carefully avoided answering my question. Is the Minister actually saving money this year by taking money out of the housing sector which otherwise would have been there? Will he be spending less money on the housing sector in the next 12 months as a result of this package than he would otherwise do?
No. I am diverting money which was being spent in the black economy sector of the construction industry and introducing a new grant which is confined to houses built by registered contractors. As I pointed out in my initial reply, it is estimated that over the next three or four years the cost of the new scheme, which is much more directly related to genuine employment, will be approximately the same as the cost of operating the other schemes.