Built-in amnesia in building lobby’s plans

Cantillon: no surprise to see Construction Industry Federation with begging bowl again

The Construction Industry Federation seven-point plan for the building sector includes all the old reliables. Photograph: Cyril Byrne

The Construction Industry Federation seven-point plan for the building sector includes all the old reliables. Photograph: Cyril Byrne

 

Any hope that six years of austerity and financial hardship would have instilled a measure of caution in relation to the State’s finances has been comprehensively disabused with the stream of “economic forecasts” preparing the ground for a Government U-turn on sensible budgetary planning.

In truth, these “forecasts” are grounded less in economics and more in the lobbying interests of different sectors.

It is scarcely any surprise then to see the builder’s lobby, the Construction Industry Federation, brandishing the begging bowl once again.

Homeowners and aspiring homeowners are still coping with the fallout from a property crash, fuelled by easy money, soft planning and tax reliefs, but the CIF’s pre-budget submission shows no sign of adopting a new approach.

Having spent the past few years calling on the Government to support its beleaguered sector, it is now looking to accelerate the growth that has re-emerged.

The federation’s seven-point plan includes all the old reliables:

lCheap finance – the lobby group wants both a special development finance fund and a help-to-buy scheme.

lTax relief – it is calling for a VAT rate reduction to 9 per cent and property tax rebates for homebuyers, with more generous ones for first-time purchasers.

Oh yes, and full interest relief for investment in the buy-to-let sector (remember where that sort of thing got us in the past).

lDucking development levies – the CIF would prefer everyone to share the cost with a 1 per cent levy on all home sales.

CIF boss and former boom-time minister Tom Parlon said implementing the measures “would have a transformative impact on housebuilding in this country”.

More likely is that, as in Britain, it would help perpetuate the boom/bust cycle in property prices.

The Government might be better off examining how to create the sort of stable property market that is the norm in many of our fellow EU states.

As part of that, the short-term focus would be better spent on getting banks back on their feet and lending once again – but prudently this time.

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