An economic 'house of cards'

The recent Future Shock: Property Crash programme on RTÉ highlights the economic legacy being left by the present government. What is immediately apparent to this reader in travelling around the country are the results of the apparently cosy relationship between Fianna Fáil and Irish developers, a relationship which resulted in the reintroduction of tax breaks on developments in 2002.

There is an increasing number of second-hand houses on the market for months on end – under-bidding is now commonplace. Ghost towns of large empty office and retail buildings are emerging throughout the country. Tralee is one of many examples of unsustainable overdevelopment in mid-sized towns. The opportunities afforded to developers through tax breaks – no doubt negotiated at the Galway Races – have resulted in a culture of greed influencing the planning process at both national and local levels.

We have seen an economy develop since 2002 which has resulted in 25 per cent of working males now in construction. Where will these workers go as jobs dwindle? Not to manufacturing, which has seen a 5 per cent decrease in jobs in the lifetime of this government. They may find employment in the low-paid services industry but will that be sufficient to support their 100 per cent mortgages? I doubt it.

Inflation is running at 5.1 per cent, leading to increased wage demands from the public-sector unions, stamp duty income is starting to fall off, increasing job losses will also reduce income-tax revenue and VAT returns will be hit by decreased consumer spending. This government has built an economic house of cards in which the exchequer has become highly dependent on stamp duty, which is ultimately generated by the private credit of Irish citizens. They have been helped, of course, by an opposition which has done nothing to try and halt this indirect exploitation of Irish workers by opportunistic developers.

Barry Walsh, Blackrock, Cork