I call Deputy Rabbitte on another question.

I heard the Minister for the Environment and Local Government this morning pleading with builders who, he said, ought to have a sense of moral obligation to bail out the Government in the housing crisis?

Does the Deputy believe they should not make any contribution?

Is the Minister a leader of a party?

The same rule applies to Ministers as to all other Members in the House.

May I ask the Taoiseach and the narky little Minister—

The Deputy can do better than that.

—if it is considered that the €3,800 is irrelevant in policy terms and is being trousered by the builders? Why did the Taoiseach's party promise in 1997 to increase the amount to £5,000? Why did he not abolish it during the boom when the builders were already taking excessive profits in the building industry? Is it not the case that in reality the €3,800 is a leg-up for first-time buyers and that for some young people it is the difference between acquiring and not acquiring a home? Is the Taoiseach aware of the credit squeeze now being put on by the Central Bank which will make it more difficult for young people to acquire a home? Following this morning's parliamentary party meeting, does the Taoiseach anticipate that the backbenchers will try to save their faces by ringing the wagons on this issue only and that they are prepared to ignore the €24 million cut from the primary schools refurbishment programme, the €59 million from the capital programme for third level education, the €80 million from the capital roads programme, the €14 million from the non-national roads programme and the €44 million from the FÁS employment schemes?

Does the Taoiseach anticipate that all these matters are not of interest to his backbenchers? Are the backbenchers prepared to ignore the fact that not one new garda will be put on the streets, after all the promises from the Minister for Justice, Equality and Law Reform, Deputy McDowell, and the Taoiseach about the provision of 2,000 extra gardaí, in favour of taking a stand on the first-time buyer's grant? If they take a stand on the first-time buyer's grant, is the Taoiseach prepared to at least concede that to them?

As I have said many times in the past few days, the framing of this year's Estimates took place in a different context from that of recent years. Our economy has been growing at an average rate of between 8% and 12% over recent years. That has allowed the Government, with much criticism, to continue to increase expenditure by 20%. That has put huge increases into the base of all subheads and as a result people have seen better services, more resources, more staffing, enormous increases in pay across the public sector and more money put into the capital programme. Even now our capital programme spending is approximately double that of most other European countries.

The reality is that the economic position has changed totally. Growth this year will be about 2% or 2.5% of GDP. Instead of projected revenue of 8% or 8.5%, it will be 3% so this year we have to sustain what we have and try to reduce the substantive increases we put into all the areas in recent years as mentioned by Deputy Rabbitte, including the 40% in the past two years.

We have almost doubled the allocation to social and affordable housing in the past two years over the 2000 base but we are not able to continue to maintain the bases plus 20% this year. As one of my colleagues said, this year's base is a plateau; it is not a decline. It is a bridge into the future and if we sustain our policies and continue to put the money into areas such as health, which received over €650 million this year, education and infrastructure, for which we still have €5.3 billion, we can then maintain our economy and try to hold on to the extra 600,000 jobs – there are 1.8 million people working – and get through this difficult period.

The alternative is to bring in policies that will reverse all our tax reforms. Increased taxes will immediately result in fewer people in employment and affect our export base, and we are not prepared to allow that to happen. We have to manage carefully through a difficult time and as soon as circumstances permit, we will again implement higher value social policies, but we are sustaining very high increases into the base of 2003 and I am glad the Government has been able to do that.

I wish to focus on the first-time buyer's grant because the Taoiseach should not mislead the House. There is a 5% cut in the Book of Estimates for social housing for next year. That is the reality. There is not an increase, as the Taoiseach suggested. Is it the Government's view that there is a moral obligation on builders? Is the reality not that the moral obligation is on the Government? If the Taoiseach is serious about savings of €38 million on the first-time buyer's grant, why does he not claw back some of the tax breaks for investors, elaborated on at considerable length yesterday in The Irish Times by Frank McDonald? If the Taoiseach is interested in making savings of €38 million, why does he not claw back some of the capital gains tax breaks for speculators? Why does he not claw back some of the stamp duty lost after the imposition of the third Bacon report? Why does he not tackle any of these areas for revenue raising rather than intruding in the aspirations of young people to buy their own home?

Is it not the case that investors now pay the same in stamp duty as first-time buyers? First-time buyers are expected to compete in the market with investors—

That is not true, and the Deputy knows it.

Please allow Deputy Rabbitte to conclude as his minute is up.

It is correct. The Minister brought it back last year. Is it not the case that the rental income for investors is now higher than mortgage repayments? Is the moral obligation on the Government or on the builders, who are doing what builders do?

I will quickly address the points made by the Deputy. On the question of the social affordable housing, the Exchequer provision for housing next year is down 5% on the 2000 levels.

That is what I said.

Will Deputy Rabbitte please let me give him the details? The provision of €932 million from Exchequer capital expenditure in 2003 is more than double the spending in 2000, which is what I said, when Exchequer capital spending was €452 million. When the non-Exchequer capital is taken into account, which is the local authority borrowing from the National Finance Agency, the total capital funding for housing next year is €1.7 billion, an increase of 7% on the amount provided in 2002.

The Taoiseach cut the allocation.

The Minister is endeavouring to keep up the supply of affordable houses into the market for next year as he has done for this year. A few years ago there were 8,500 houses and I hope this year there will be 12,000 houses available. Unfortunately, some things have to give, in some policy decisions. Two years ago we substantially cut the stamp duty to the extent of almost €5,000 in order to help first-time buyers.

Why did the Government cut off people who had paid deposits?

It is not that long ago since I raised the mortgage relief. We have helped first- time buyers in every way and we will continue to do so.

The Government has helped them by driving up house prices.