McCreevey’s grant-aid hypocrisy

As the reverberations from Finance Minister Charlie McCreevy’s doom-laden Estimates became even more intensified yesterday, much of it focused on the axing of the first time buyer’s house grant, it emerged that some Government Ministers with a second home and Irish speakers will continue to enjoy exclusive tax breaks.

In what can only be perceived as an act of breath-taking hypocrisy, the Minister summarily abolished the grant for first-time buyers, but left in place a cosy arrangement whereby colleagues are entitled to approximately three times as much as he took from unfortunate couples.

To add to the outrage already expressed because of his penny-pinching from cash-strapped home buyers, it also transpires that new house grants are being retained for Gaeltacht areas and the islands. In the former, this amounts to 5,000 and invariably the recipients will be building on sites donated by their parents.

In the islands, the grant is worth 15,000 because of the higher costs of construction, although ordinary new house owners can also argue that they have no control over building costs.

What will rankle most with people is the fact that Ministers and junior Ministers can still avail of preferential tax treatment under a scheme called the Dual Abode Allowance. If they live outside of Dublin and want to buy a second home in the capital, they will be cushioned with an allowance of almost 11,000.

Being a privileged politician, a Minister so entitled, can claim 100% tax relief on mortgages for their second homes in Dublin and also claim the standard tax relief on their constituency homes.

The scheme is, and has been, availed of but the names of those members of the Government who do so are shrouded in secrecy. Neither the Revenue Commissioners, nor the Government Information Service, would divulge who, and how many, enjoy second homes through the largesse of the State.

The first-time buyer grant was a comparatively small, but important, sum in relation to the cost of houses. Its removal will also have a devastating impact on the shared ownership scheme, as it was a crucial element in the concept which helped those on the lower end of the market take the first step in home ownership.

The Minister for the Environment, Martin Cullen, in a comment which was naive in the extreme, suggested that the removal of the grant could be offset by builders reflecting the new situation when formulating house prices.

It is unconscionable, and totally unacceptable, that the Minister for Finance should penalise people struggling to acquire their first home, and yet retain considerably higher allowances for members of the Government who are on salaries and other allowances which ordinary people can only dream about.

He should immediately announce that some other measure will be put in place in order to redress the balance in favour of first-time house purchasers, and one which will accrue to them rather than builders who already enjoy a more than comfortable level of profit.

A suggestion which emerged yesterday and which should be implemented by the Minister, is one whereby mortgage interest relief should be doubled for first time house buyers for the first five years.

This is an issue which Taoiseach Bertie Ahern has a moral obligation to intervene in because there are too many serious social repercussions attached to it.