I call Deputy Verona Murphy on behalf of the Regional Group.

I hope the Taoiseach had the opportunity to read David McWilliams's article in Saturday's edition of The Irish Times giving his opinion on the budget with regard to housing. If the Taoiseach did not get a chance to read it, let me put some of the main points to him. He starts off by highlighting the folly of awarding a tax break on mortgages, which sounds nice in theory but in practice only helps to ensure that house prices remain higher than they need to be, a move, he argues, that will not lead to a single extra house being built. Indeed, he says that if tax breaks are given every time interest rates rise, house prices will rise regardless of whether interest rates rise or fall.

Mr. McWilliams then moved on to highlight the problem of the rental tax credit. It is not a long-term solution to any problem and is more likely to put a floor on rents, which could possibly drive up rental costs. His next target for criticism was the tax break for landlords. Yes, we need people to be landlords and we need conditions to encourage people to rent out property rather than having it lying idle but the tax break is hardly a necessary way to spend money. High rents and high demand should be enough of an incentive for landlords to rent out property. Making it more straightforward in terms of regulation and red tape would have been a better option. Landlords would be better served by a functioning Residential Tenancies Board where issues were dealt with in a timely manner. He also wrote “Instead of doing something that could boost building like, say, cutting development levies or funding them through higher local property tax or cutting VAT on new builds, parties of the centre have adopted the nonsensical policy option advocated by Sinn Féin,” and that the Government “should be confidently highlighting the ideological difference between themselves and Sinn Féin rather than robbing Sinn Féin’s clothes".

Prior to the budget I met both Ministers, Deputies Michael McGrath and Donohoe as part of the Regional Group delegation. Part of that discussion was on interest rate rises. Rates have risen by 4.25% since July last year, leaving first-time buyers stretched to their limits to purchase the most basic housing units in regional Ireland. Before interest rates started to rise, first-time buyers' inability to obtain sufficient mortgage approvals was a significant component of the housing crisis. As a result of higher interest rates, banks have changed their underwriting criteria, resulting in first-time buyers being able to borrow considerably less than a year ago, that is, by approximately €50,000 per couple. I put two proposals to the Ministers. One was a mortgage interest relief scheme granting tax relief to first-time buyers that would give banks more flexibility to underwrite larger mortgages for first-time buyers such that those on marginal incomes could get a mortgage sufficient to buy a home. The second was for the Government to rebate the VAT on new homes directly to first-time buyers, immediately after taking possession of their homes. On a sum of, say, €325,000 this would amount to €38,656. Will the Taoiseach now consider some of these proposals? The measures would be temporary and reviewed when Euribor rates reduce below 2%. They most certainly would increase the prospects of house building becoming viable and ensuring that buyers were in the market in the future.

We will always consider good proposals from other people and the Opposition. I think we have shown that when it comes to housing policy. We have taken a number of steps in recent years and months that we might not have done previously. We will always consider these things but we must be careful around demand-side measures. I am not against demand-side measures but we must be careful because of the risk of putting up property prices.

I did read David McWilliams’s article. He is a very good commentator and a very interesting one but I disagree with his analysis on this occasion. I will tell the Deputy why. We have done five things in the budget and before the budget that I think do make a difference and they were not accounted for in the article. First, we approved a €5 billion budget for housing. That will allow us to break all records in the provision of new public housing next year, social, cost rental and affordable. We will break all records next year because of that budget. Second, we increased the rent credit to €750 for a single person and €1,500 for a couple, putting roughly a month’s rent back in people’s pockets. Third, we extended the help-to-buy scheme. It helps many first-time buyers to get their deposit. They would not even be able to bid for a house were it not for help-to-buy and I am glad we extended that for another year. We also put in place tax breaks for small landlords to encourage them to stay in the market. That had been advocated by the Regional Group only a few months ago. Mr. McWilliams suggested that we should cut development levies. We have done more than that; they are gone. We got rid of them a few months ago. If anybody says that this Government is only interested in demand-side measures, it is totally incorrect. We have supply-side measures too. The suspension of the development levies is an example of that. The grants to renovate and do up derelict properties have had 4,000 applications already. That is another example of a supply-side measure. The reforms we are making to the planning system are a further example of supply-side measures.

I cannot say I agree with the Taoiseach on many of those points. When the Taoiseach says demand-led measures, the demand he is aiming for is a target of 30,000. That is half of what the Housing Commission says we should be aiming for. For the past ten years, we have incurred a deficit of 250,000 homes. That is 25,000 a year less than we should have been building. If the Taoiseach continues with his attitude, we will end up with another 250,000 deficit on top of the deficit we already have. The Government’s targets are far too low. The Housing Commission says we need to be building between 45,000 and 65,000 homes annually. The Taoiseach is greatly underestimating the level of anger and frustration in families who are unable to get students into college accommodation or get their families to move out for the want of accommodation. Furthermore, many are taking back their sons and daughters with grandchildren. The Taoiseach should read the article again and please consider the proposals I have put to him because we need to build more houses and ensure they are viable into the future.

When I first became Taoiseach in 2017, we were only building around 14,000 new homes a year in the State. That has more than doubled. We are up to 30,000 and I would like to see it double again by the end of the decade. I believe that is possible.

The target we set of building 29,000 new homes this year is a target, not a ceiling. We intend to exceed it, just as we did last year. The Minister for Housing, Local Government and Heritage, Deputy Darragh O’Brien, is working on revised targets for the coming years. We have advice from the Housing Commission and we also have advice from the Economic and Social Research Institute, ESRI. We have to take both sets of advice into account. I expect that early in the new year we will increase our housing targets for the years ahead for the reasons the Deputy gave. We should also include in those targets student accommodation, which currently counts for nothing. That does not make sense to me. Those targets should also include bringing vacant and derelict homes back into use because they also count for nothing at present and they should count.