Builders call for return of first-time buyers’ grant and halt to stamp duty

BUILDING chiefs want the first-time buyers’ grant reintroduced and stamp duty on homes temporarily suspended as incentives to restart house buying.

They also want private pension fund investments diverted into public infrastructure to make up the shortfall in state funds for major construction projects about to be shelved because of the financial crisis.

Over half a million jobs rely directly or indirectly on the building industry, they warn, and two-thirds of them will either vanish or be jeopardised if urgent action is not taken to keep construction crews at work.

An emergency meeting of the Construction Industry Federation (CIF) was held yesterday to agree a list of job-saving proposals to put to the Government, ahead of talks with Finance Minister Brian Lenihan today.

Most of the major building firms were represented at the meeting which was also attended by the representatives of the building supply trade, architects, engineers and quantity surveyors.

“Action is needed within the next month,” CIF director general Tom Parlon said afterwards. “The industry is in free-fall at the moment. The message from the different managing directors of firms we met today is that as soon as my current project is over, I have nothing in the pipeline and I am going to be forced to lay off hundreds, and in some cases, thousands, of people.”

Mr Parlon said that the Government’s strategy of putting public building projects, such as schools, health facilities and roads, on ice to save money was “entirely the wrong thing to do” as investment was what was needed to save jobs, maintain tax revenues and keep the public spending.

“The payback to the state will be immediate. Research shows that every e100 million spent on construction projects creates 1,000 jobs and generates nearly e50m for the exchequer through income, taxes and social welfare savings,” he said.

Key proposals to be presented at today’s meeting include bringing back the first-time buyers’ grant, which was abolished in 2002. It was worth about e3,800 to a buyer and cost about e40m a year.

Mr Parlon did not suggest how much the grant should be worth now but said over e1 billion in VAT was tied up in unsold properties and could be released to the Government if there was an incentive to get the property market moving again.

“It’s a question of what can you afford to spend to get the e1 billion back in,” he said. He is also calling for a “holiday” from residential stamp duty to help revive the secondhand property market.

Another proposal is that private pension fund managers be urged to switch their investments from the stock market to bricks and mortar, under agreements that would give them a 6%-7% annual return.

Tom Costello, managing director of Sisk construction firm, said: “Given that most pension funds are seeing a negative return on their investments at the moment, this is an attractive idea.”

The proposal is to be discussed in more detail later this week and Mr Costello said he hoped to present the idea to the Government in the next fortnight.