McCreevy comes home to reality

When is a U-turn not a U-turn? Give up? When it's a modification. At least that is if the Minister for Finance Mr McCreevy is to be believed in his announcement this week that a raft of measures brought in to deter investors and allow individuals buy their own homes are to be abandoned before they come into force.

Mr McCreevy has decided to scrap plans to impose a 2 per cent anti-speculation property tax on people buying a second property for the first three years of their ownership of that property. He has also dropped plans for a draconian 9 per cent rate of stamp duty on all newly built second properties, although the measure remains for second-hand property.

There were various reasons put forward by the Minister for his U-turn - sorry "modification" - but none passed muster. Labour rowed in to accuse the Minister of succumbing to pressure from property developers and estate agents.

It seems likely someone persuaded the Minister to have a rethink, but it might simply be the growing reality that the measures would merely move the problem from home buyers to the already stretched rental sector. Put simply, there is nowhere near enough property for rent available in the State. There is no point the Tanaiste looking to entice 200,000 immigrants into our labour force in the coming years if there is nowhere for them to stay. However the Government seeks to explain its move, the truth seems that the original measures were ill-thought through in the first place. As the saying goes, reaction makes poor policy.