Ahern believes property speculators should be “taxed out of existence”. Is this a clue to where younger brother Bertie got his socialist leanings? The taoiseach, don’t forget, “outed” himself as a champion of the poor and oppressed in 2004. Probably not.
Noel Ahern’s excitable statements on the property market are a crude attempt to deflect attention from Fianna Fail’s unhealthy relationship with builders and developers. They’re also designed to distract attention from the state’s financial dependence on the continued boom in property prices and the government’s failure to come within an ass’s roar of meeting its targets for affordable housing.
This willingness of the taoiseach’s brother to make idiotic statements at least guarantees his mini-ministerial post. “Every prime minister needs a Willie,” Margaret Thatcher once said. Likewise, every government needs a Noel — a minister prepared to sacrifice his credibility for the greater good. Ahern is proving a spectacular success in this role.
Last week’s attack on so-called speculators — investors who sell on properties bought off plan before a development is completed — followed his earlier assault on banks for making it too easy to get a mortgage. Ahern, who grew up in an era when you had to have a reference from the parish priest and a 10-year savings record before you could seek a meeting with a building society, clearly hankers after those simple days.
Does he really expect us to believe that Fianna Fail, the political wing of the building industry, wants to see house prices falling? And does the mini-minister believe this prospect would be welcomed by Brian Cowen, his senior colleague with the grown-up job of looking after the nation’s finances? I doubt it, particularly since Cowen’s entire budget strategy is predicated on the housing boom continuing.
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The government’s take from new-home sales is about 40% of the price charged to “hard-pressed” buyers who, having already been soaked financially, are now in danger of being drowned by Ahern’s crocodile tears.
Thanks to our willingness to get deeper into debt to acquire a des res, the amount of stamp duty pouring into the exchequer’s coffers on a monthly basis has reached embarrassing levels. Property is also driving Vat receipts, accounting for 25% of this tax last year.
Ahern’s arresting analysis of the housing market was designed to distract attention from his — and the government’s — failure to deliver affordable housing. Only a small percentage of the affordable houses promised by this government have been built, while four sites released for development three years ago have not produced a single unit. Maybe they’re waiting for the economy to improve.
Ahern is a 500-carat calamity whose continued presence in office is a source of wonder. On the plus side, he’s an inspiration to underachievers. I mean, if Ahern is the benchmark for junior ministerial material, there can hardly be a disappointed school leaver in the country who would not consider himself suitably qualified for one of these plum jobs and its €139,000 salary.
If the government wants to tax the speculators out of existence, then it has the power to do so. But the notion that it is merely an onlooker in the housing debate is an insult to our intelligence. In hock to the country’s developers, it has shown no appetite for dealing with the release of land banks and, when challenged, has been content to dilute its own initiatives. That’s why Part V, the rule that sets aside 20% of new housing development for social and affordable units, has been neutered so comprehensively.
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The government likes nothing more than playing politics with the property market. That’s why we end up with initiatives such as the rural renewal scheme (RRS), which encouraged builders to develop housing estates in the Celtic tiger-free zone represented by Cavan, Leitrim, Longford, Roscommon and Sligo. In the process, it destroyed some of the country’s most scenic locations.
This initiative, financed by taxpayers to the tune of €277m, was castigated in a government-sponsored report published last year. According to its authors, the RRS “had little direct impact on economic activity except in major urban areas; had a modest impact on housing output, resulted in higher quality housing output but largely to the benefit of existing residents; led in some case to the construction of excessively large dwellings; was poor value for money as the tax costs per housing unit were very high; and has now resulted in an excess supply of housing in the scheme area.”
Oddly enough, I can’t find any record of the minister for housing giving us his considered views on that debacle.