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Deputy Joan Burton:   If the Minister is that concerned, he has a very easy remedy that would put all our minds at rest, namely, backdate the introduction of the measures to 8, 9 or 10 October. The budget was brought in on 11 October. If he wanted to, the Minister could even backdate the introduction of the measures to 1 October. It is a fundamental principle of fairness in taxation that those in the know should not have access to privileged information which would allow them, as in this case, to mitigate significantly the likely amount of stamp duty they would have to pay. In addition, subsequent to the budget, fairly respected commentators suggested that the target would not be reached, partially, I suspect, because of the leaking, and that people in the business of tax arrangements and tax avoidance were able, therefore, to anticipate what the Minister would do. That was foolish from the Department's point of view. There were suggestions that the actual yield from the tax will not be what the Minister indicated in his budget speech. Obviously, we will discover the actual position over the coming year.
Deputy Paschal Donohoe: I again reject the allegation the Deputy has made. If, in the context of this measure, the best she can do is infer that I or my Department engaged in behaviour for which she has no evidence whatsoever, it points to the poverty of ideas she and the Labour Party are offering regarding our economy and how all of us want to move it forward. This is the right policy measure to put in place. The Government made the correct decision in terms of broadening the tax base. Given the Deputy's background and what I understood to be the policy of the Labour Party, I would have thought that they would support this. If the best the Deputy can do is allege that I was involved in behaviour that would allow some to benefit from decisions I make, she has a very poor grasp of the standards I and my Department try to stand by when we are involved in the development and implementation of policy. The Deputy's comments are unfounded and a slur on the quality of the officials in my Department, who have helped me draft and implement policy options. The Deputy should know - I suspect she does but is not willing to make the point because she is seeking political gain - that at no point would I be involved in seeking to bestow a benefit on anyone as a result of a decision that could be made on budget day. It ill behoves the Deputy to suggest otherwise.
An Ceann Comhairle: I thank the Minister. Question No. 5-----
Deputy Joan Burton: May I respond to that briefly?
An Ceann Comhairle: No. I am sorry-----
Deputy Joan Burton: I just want to say one sentence-----
Deputy Bríd Smith: The Deputy always does this.
Deputy Joan Burton: -----to the Minister. There was a time when a previous leader of Fine Gael, Garret FitzGerald, had to seek the resignation of a Fine Gael Minister of State because there was an inadvertent leak of information-----
An Ceann Comhairle: We know about that.
Deputy Joan Burton: -----which may have resulted in advantage to some of the players involved. If Fine Gael standards have really-----
Deputy Paschal Donohoe: I think the Deputy is realising just how spurious is the ground on which she is raising this matter. She is now talking about inadvertent leaking in contrast to the serious allegations-----
Deputy Joan Burton: That was inadvertent in those days.
Deputy Paschal Donohoe: -----she levelled at me a moment ago.
Budget Measures
5. Deputy Michael McGrath asked the Minister for Finance his plans to establish Home Building Finance Ireland, HBFI; the expected timeframe for it to be operational; the number of homes he expects it to fund; the terms and conditions that will apply to the loans; and if he will make a statement on the matter. [44939/17]
Deputy Michael McGrath: I am raising a question about the budget day announcement concerning HBFI. I think everyone in the House accepts that finance is an essential ingredient in delivering the homes we want to build for our people throughout the country. Specifically, when does the Minister anticipate the fund to be up and running and providing finance for home construction? Will the terms and conditions be on a commercial basis and attractive enough that the loans will actually be drawn down and used?
Deputy Paschal Donohoe: As announced in my budget day speech on 10 October 2017, it is my intention to establish HBFI to provide funding on market terms to viable residential development projects whose owners are experiencing difficulty obtaining debt funding or credit. HBFI will be a stand-alone entity that will provide funding directly into the market. It will be designed to leverage off the extensive expertise already available to the State to deliver this initiative and, as such, existing NAMA staff skills and expertise will be utilised to deliver the funding involved. Any lending provided in due course will be made available by HBFI and will not impact on NAMA's existing objectives or its board's strategic wind-down plans.
In answer to the Deputy's final question, I hope to bring the establishing legislation to the Houses of the Oireachtas for approval either later this year or in early 2018, with a view to HBFI commencing operations by the second quarter of next year. It is not expected that it will have an indefinite lifespan but it is too early to speculate as to how long it might operate as this will depend on the availability of funding in the market to meet demand for homes in the coming years.
Deputy Michael McGrath: What consideration has been given to the terms and conditions that will be attached to the credit that this new agency will be able to provide? One of the reasons the Activate Capital fund has not been hugely successful is that the initial cost of funding was very high. I think it was as high as 14% but has come down significantly since then. The fund has had some success but not, I think, at a level others might have expected. Will the Minister clarify what will be the terms and conditions associated with the funding that this new body will provide? Will he confirm that the legislation is under preparation and that he will bring it before the House on schedule?
Deputy Paschal Donohoe: The legislation is under preparation and I am confident that I will be in a position to publish it towards the end of this year and bring it before the House in the early part of next year.
Regarding the terms and conditions relating to the credit and how it would be made available to companies, it must and will be made available on commercial and market-equivalent terms. In other words, the way in which this funding will be provided must be consistent with the commercial terms upon which funding is provided elsewhere in the market. I have studied the operation of the Activate Capital fund, the success of which to date has shown that there is a need for credit in a way that our banks are not able to facilitate at present. As I bring the legislation before the House, I am confident we will be able to create an entity that will be able to do this. At this point, I am not in a position to be able to comment on what the rate of interest will be because much of that will depend on the quality of the individual applications made to HBFI once it is set up.
Deputy Michael McGrath: Will the Minister clarify whether this new fund will only finance private home construction? What role, if any, will it have in the construction of social or affordable housing? For example, will approved housing bodies be able to avail of funding from this new organisation for the construction of voluntary housing association houses or social houses that they will be delivering as part of schemes? Will the Minister confirm that?
Deputy Paschal Donohoe: It is my intention at this point that HBFI would primarily be focused on the private sector. The rationale behind this thinking is that in dealing with approved housing bodies and local authorities, my experience is that the issue they face is not the rate of interest on the credit they need. In many cases the funding they need is provided directly by the Exchequer. For this reason, my current thinking is that HBFI will be primarily focused on the private sector. However, in the course of the Bill's passage through the House, if Members have suggestions as to how this might be amended or if it needs wider breadth to deal with the long-term objective of increasing housing supply, I will be open to dealing with Deputy Michael McGrath and others on that point. |
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