Construction industry urges public pay crackdown

Ireland’s construction industry today urged the Government to tighten the reins on public pay in an attempt to rescue the housing market.

The country’s largest public services trade union Impact immediately accused builders of issuing a “ransom note” to protect their wealthy interests.

But the Construction Industry Federation (CIF) insisted “bold” measures are needed to help out house-builders as confidence deserted the property market.

Although the industry said it has a good medium to long-term future – because non-residential work was growing as home-building declined – it wants Government intervention.

In its annual report, the CIF demanded public expenditure and public pay be kept under tight control and below the rate of growth of the country’s overall wealth, or GNP.

Niall Shanahan, Impact spokesman, said any freeze on pay would, ironically, prevent many ordinary workers already unable to buy themselves a house ever getting a foot on the property ladder.

“The construction industry has done phenomenally well over the last 15 years. For the industry to try and protect their own position by suggesting a reduction in standards or conditions for other sectors is disingenuous,” he said.

“I don’t think it’s the place of any one particular part of the private sector to dictate what sort of changes need to be put in place to protect their own interests.”

Mr Shanahan accused the construction industry of protectionism and ignoring partnership agreements so it could shore up its own wealthy interests.

“It sounds like they are calling for measures that will widen the gulf between those who work in the construction industry and those who don’t,” he said.

“It’s an industry that has been conspicuous in its success and it is trying to protect that.

“The perception must be, on the part of the industry, that the economy revolves around its success but there are commentators now saying there is an over-dependency (on construction).

“In that context it reads a little bit like a ransom note.”

The CIF also called for radical reform of stamp duty and mortgage interest relief to bring stability to the housing market, calling on the Government to borrow to its limits if necessary to fund the changes.

Hank Fogarty, CIF president, insisted the measures were essential – sooner rather than later – to restore confidence in the property market.

“Government action needed to restore the required level of confidence includes a reduction in the penal top rate of stamp duty from 9% to 5% together with an increase in mortgage interest relief for first time buyers over and above what is already committed to by Government,” he said.

“Mobility within the housing market is significantly reduced and this will have a negative impact on overall economic activity and employment and exchequer receipts.”

Mr Fogarty also demanded the full implementation of National Development Plan, tax incentives for private investors in public projects and a delay on regulations for green measures on new buildings, with more focus on greater energy efficiency in existing buildings.

The industry continues to enjoy growth as work increases in non-residential and public infrastructure projects.