Building groups broadly satisfied

Construction Construction industry leaders welcomed most of the Budget's provisions, but criticised Mr McCreevy's refusal to revisit last year's hike in stamp duties.

A 50 per cent increase in commercial stamp duties, imposed in last year's budget, resulted in "a flow of money" out of Ireland into commercial property in Britain, said the Construction Industry Federation.

Its director general, Mr Liam Kelleher, acknowledged, however, that it was "too soon" to expect the Minister to reverse the measure.

The increase from 6 per cent to 9 per cent in last year's budget resulted in €2 billion being invested in Britain by Irish property interests, the CIF estimates.

Less than half that amount, €750 million, will have been invested this year in commercial property in Ireland, it says.

"High levels of stamp duty contradict the Minister's own fundamental approach to taxation," the federation said in a statement.

"Lower rates of taxes encourage output, increase general economic activity and in turn lead to higher Government revenues. Penal rates of stamp duty are undermining investment and construction output and this in turn is undermining tax revenues."

Other measures in the Budget, however, were warmly welcomed by the CIF and its constituent body, the Irish Home Builders' Association.

The extension to July 2006 of the Urban Renewal Scheme deadline would allow for a more orderly completion of projects and help sustain employment, it said.

The introduction of multi-annual budgeting for the public capital programme would reduce uncertainty and eliminate the "stop-go" approach to major investment projects, it added.

But the CIF said the Government was failing to meet its own spending target, of 5 per cent of GNP, in this area. This was despite the "very high levels of return" on investment under the National Development Plan, highlighted in the recent ESRI mid-term review of the NDP.

The federation also welcomed the decentralisation programme announced by Mr McCreevy, but Mr Kelleher expressed concern as to whether it tied in with the National Spatial Strategy.

The Green Party's finance spokesman, Mr Dan Boyle, claimed Mr McCreevy had kept "the men of property" happy with a "Bob the Builder's Budget".