There has been a rush of motions on to the Dáil Order Paper since the Government's decision to abolish three of the four schemes of housing grants was announced in the budget. Various parties were, I would suggest, somewhat hastily falling over themselves in a public relations exercise to cynically exploit the Government's courageous and responsible decision to abolish these grant schemes. Many of the precipitate statements made could have been avoided if those making them had waited until details of the implementation of the decisions were made available by me as Minister responsible for the operation of the scheme.
In making this statement I want to indicate briefly the budgetary strategy which underlies the decision to abolish these grants. I want to put on the record of the House the appalling extent of the housing grants liabilities I inherited on becoming Minister for the Environment and, finally, I will elaborate for the information of Deputies on the detailed arrangements which will apply to the termination of these schemes.
Our budgetary strategy sets out to tackle the three evils of high taxation, high interest rates and the lack of confidence that continue to undermine our economy. Unsustainably high levels of public expenditure and its offspring, national debt, is at the root of these three evils. Therefore, any radical attempt to tackle our serious economic problems must start with public expenditure. It must be brought down to a level that can be sustained without choking the economy to death. If we are to do this we must be prepared to cut out some expenditure programmes while ensuring that the rest are both efficient and effective.
Housing, as the largest single constituent of the Public Capital Programme area, cannot be exempted from the overall need to cut back on public expenditure. While in receipt of large scale and expensive public expenditures, the housing sector is at the same time suffering from excessively high taxation, including the trebling of VAT since 1983. Furthermore, it is severely afflicted by very high inflation rates and widespread lack of confidence. Clearly the existing policies and the wide, if not contradictory, range of Government interventions have failed to arrest the decline in the industry. To suggest that we continue down this road is hardly credible: a redirection that will contribute to a resolution of the underlying problems is what is needed now.
I want to put on record the appalling situation in regard to the public expenditure commitments I found in the housing grants area on becoming Minister for the Environment. On house improvement grants alone I found that grants approved totalled almost £230 million with applications still coming in at a rate that would add £5 million a month to this staggering figure. Payments this year will cost at least the £100 million provided in the Estimates and even this may not be enough. Compare this with expenditure of £7 million on house improvement grants in 1985 and £27.5 million in 1986. The legacy of public debt bequeathed by this scheme results from a crude attempt to buy survival for a shaken Coalition Government who were having grave difficulties facing the resumption of the Dáil after the 1985 summer recess. This was a hastily conceived open ended scheme under which expenditure could neither be predicted nor controlled. It provided large handouts of taxpayers' money to individuals regardless of their means for doing often inessential or even cosmetic works. It was the better off people who were able to make most use of these grants. Moreover they have not had the impact on employment that was originally predicted for them.