THE crisis in Irish financial institutions is an opportunity to end the malign influence of property development/speculation on how we are governed.
This long-running source of economic and political instability has now resulted in the citizens of this Republic being loaded with unknown liabilities that may last for years, just as we are still paying levies on insurance premia 25 years later arising from the collapse of PMPA.
The current weakness of Irish-owned financial institutions due to lending for property development is a factor driving the Government deposit/loan guarantee scheme.
At the same time, Government’s smug dependence on taxes arising from property transactions (VAT, stamp duty, PAYE/PRSI from a bloated house-building workforce and capital gains tax) has undermined public finances with a speed that has shocked the governing class. Low standards arising from ‘softness’ on property development (eg, the Mahon Tribunal, the Telecom affair, tax-breaks) pervades much else directly under the control of local and national government, eg, house-building standards, provision of clean water, planning primary schools.
It is now time to change the view that we can build a common prosperity by selling land and buildings to one another.
Fortunately, part of the solution has already been worked out for us.
In 1971, the then Fianna Fáil government appointed Judge John Kenny to consider, in the interests of the common good, possible measures for
(a) Controlling the price of land required for housing and other forms of development, and
(b) Ensuring that all or a substantial part of the increase in the value of land attributable to the decisions and the operations of public authorities… shall be secured for the benefit of the community.
Let us limit the scope for excess by government and financial institutions by controlling the price of building as Judge Kenny recommended. If it needs a referendum to copperfasten the constitutionality of any legislation for the measures needed, then this is just as important as another on the Lisbon Treaty.
This is the least the ruling class can do now that we, through the Government, have given huge guarantees to sectors that have over-reached their abilities. We do not deserve the hard landing that the self-satisfied networks of Government, financial institutions and property development have now made for us.
100 Griffith Ave