Sunday 4 December 2016

Labour's policies no cure for house crash

Fiach Kelly Political Correspondent

Published 20/05/2010 | 05:00

LABOUR and Fine Gael policies at the height of the boom would not have cooled the property market, despite their criticism of Fianna Fail's decisions at the time.

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Taoiseach Brian Cowen yesterday came under attack from Labour leader Eamon Gilmore for his handling of the property market when he was Minister for Finance.

But an analysis of opposition policies at the height of the boom shows Labour and Fine Gael were in favour of reforming stamp duty which would have decreased the amount of tax levied on house buyers.

But Labour reforms could have increased property prices because people would have had more money to spend on the actual house rather than giving it to the taxman.

Mr Cowen has denied he ignored warnings about a collapse of the property market and said Labour stamp duty policies during the boom would have made matters worse.

It was a repeat of last week when Mr Cowen also accused the Opposition of criticising him as Finance Minister while forgetting their own policies.

An analysis of those policies by Labour and Fine Gael over the past five years shows several occasions where they mooted policies which would have spurred the property market.

In December 2005, when Mr Cowen was introducing the annual Budget, Fine Gael's Finance spokesperson Richard Bruton complained that stamp duty had not been reformed to help some house buyers.

Abolish

And during the 2007 election, Labour and Fine Gael published a plan to abolish stamp duty for first-time buyers up to a limit of €450,000. They also proposed restructuring the system for other buyers and no stamp duty up to €100,000.

In contrast, Mr Cowen is widely believed to have only reluctantly agreed to abolish stamp duty for first-time buyers in the run-up to the election. His changes were estimated to cost €76m, compared with the estimated €460m for Fine Gael and Labour's more extensive proposals.

Then Labour leader Pat Rabbitte criticised former PD leader Michael McDowell for taking five years to realise stamp duty was an unfair tax. This came after Mr McDowell called for it to be immediately abolished entirely for first time buyers.

And Labour finance spokeswoman Joan Burton said stamp duty was "savagely" hitting first time buyers when figures showed it yielded €10.5bn for government coffers.

Last week Mr Cowen pointed out that the Opposition had criticised him for not spending enough on public services.

"The irony of politics today is that the Opposition parties criticised us during the good years for spending too little," he said.

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