BUDGET 2018, THE budget that you have when you’re not having a budget.
The budget, the most important announcement that any government can make (other than a declaration of war), is announced at a time when the vast majority of the population are not able to listen to it because they are at work or have better things to do than listen to a finance minister ramble on about what good a job he is doing.
In Australia, they have a drink called Claytons. It smells like whiskey, looks like whiskey, but is alcohol free. This was a Claytons’ budget.
There were, however, two very important things about this budget that should be pointed out, because they were almost lost in the eloquent speech.
The minister, Paschal Donohoe, announced that €750 million from the Ireland Strategic Investment Fund would be made available to a new organisation called Home Building Finance Ireland.
That’s basically the old Nama, which bought billions of dodgy loans so that the banks would not totally collapse.
Do you remember how Nama bought the developers’ loans and then rehired the executives of these companies to advise them on how to handle their disposal?
Donohoe said: “The agency will increase the availability of debt funding on market terms to commercially viable residential development projects and land owners who want to build homes.”
So the minister is now proposing to again lend money to these scoundrels who created the mess in the first place.
Where has the minister been for the last 15 years? He is essentially encouraging and indeed inviting the foxes back into the henhouse.
He should have added a caveat that anyone who was a director in any company that was taken over by Nama would not be eligible for inclusion in the scheme and would not receive any loans.
Why is the government getting into the property market? That is not the role of the government, except perhaps in Cuba.
The massive influx of US and European money into to Irish economy when it collapsed to pick up bargain deals clearly demonstrates that there are trillions of dollars and euro out there looking for a home.
The developers should be able, if the demand is as massive as everyone is making out, to put together a compelling proposal to attract the so-called ‘vulture funds’ back.
It should not be up to the government to finance and ultimately, if history repeats itself, as it usually does, bail out the developers. By the way, there is no shortage of empty houses in Donegal!
A lot of property sales
Pascal was like Theresa May without the coughing! Lots of hot air and little substance. The few hundred euro per year that apparently most of us will get will largely be funded by stamp duty on non-residential property being tripled.
This is expected to yield €375 million in 2018, but for this income to be realised we need to have €9 billion in transactions, according to KPMG, or about 3% of our GDP.
There was virtually nothing else in the Budget, other than to increase the cost of cigarettes. The biggest issue facing the Irish economy is Brexit, and Donohoe is proposing a €300 million ‘loan’ scheme to assist companies affected.
Good Lord, has he forgotten that Britain is our largest trading partner!? This should have been top of the agenda as it is going to have a major impact on Ireland.
One final point totally omitted but critical to the success of the Irish economy: American multinationals. We have already seen the devastation to Limerick when Dell decided to move to Poland in 2009.
Donohoe should have reassured them that, whether it is a Fine Gael, Fianna Fáil or Sinn Fein goverment, the people of Ireland have their back and will not let the EU dictate our tax laws, and who can and cannot be our friends.
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