If you thought Tom Parlon, the former Progressive Democrat TD and junior minister, was nursing his wounds after losing his Dail seat, you'd be very, very wrong. Had he survived, Parlon would have been part of a dying party whose only other non-ministerial TD, Noel Grealish, appears likely to defect to Fianna Fail. And he would have been lucky to retain his position in charge of the OPW. Or would he?

Running one of the dullest parts of the public sector hardly beats what Parlon will be doing very soon.

"Every day my eyes are opened as to just how important the construction sector is to Ireland; it accounts for €36bn in activity each year and employs 280,000 people," he said. In January, Parlon becomes director general of the Construction Industry Federation, a body that has represented arguably the most dynamic and fastest growing part of the Irish economy.

But, according to Parlon, it won't remain so unless the Government takes action and it isn't long into the interview before the issue of stamp duty rears its head. Compared to just 2 per cent for the US and 4 per cent in the UK, the top rate of stamp duty in Ireland is 9 per cent -- by far the highest in the OECD.

Job losses are now occurring in the industry as a lethal cocktail of higher interest rates and house prices combined with a failure to index stamp duty thresholds makes buying or investment in property impossible for a growing number of people.

"Stamp duty here is more than twice the rate that it is in the UK. We now have no inward investment to commercial property in Ireland," he says. Parlon cites an example from his own county of Offaly of a young farmer trying to buy a 240-acre farm costing €3m having to pay €270,000 in stamp duty, just to start a business.

"It's a horrendous penalty," he says, adding that the negative implications of the stamp duty regime is now spreading to the government. "If nothing is done and we have a really bad year next year, it's going to eat into government revenue."

Parlon's warning is already coming true. October revenue statistics from Parlon's former department, Finance, already show revenues from stamp duty well below target in the year to October and falling by 30 per cent annually in that month alone.

Only a few months after the property market started to turn down, the fallout is beginning. And it will go far beyond stamp duty.

"Aside from the sale of property, the construction sector contributed some €10bn to the Exchequer last year," he says. The staggering figure -- one fifth of all tax receipts -- shows how across a range of categories, from VAT to corporation tax, the construction sector has contributed to the provision of public services.

"Every 10,000 houses built contribute €1bn into the Exchequer," Parlon adds. House-building is expected to fall by between 20,000 and 30,000 next year, numbers that should give Brian Cowen some food for thought as he approaches the budget.

Despite forecasted falls -- and the fact that Ireland's construction employment as a share of the labour force is almost twice the EU average

-- Parlon believes that the sector is far from oversized.

"The forthcoming National Development Plan is very badly needed. And even on the housing side, we still have way below the EU average housing stock," he says.

Only some months ago, Parlon was in the Progressive Democrat part of a government that presided over the rise in stamp duty, without any apparent impact on the sector. Two questions arise: If stamp duty didn't stop the sector from burgeoning, why is reforming it so important now? And just where are the PDs, who promised to reform the tax if elected, headed now?

In answer to the first question, Parlon says stamp duty reform isn't enough to get the market back on its feet -- but it is a vital first step. "The goose that has laid the golden stamp duty egg has now stopped doing so," he states.

Parlon is less willing to comment on the PDs, but doesn't disagree that the party has lost its fire.

"Realistically, I think it's going to be extremely difficult for them. That's as benign as I can be," he says.

That's in the past. In the future -- the next seven years -- the National Development Plan will see around €80bn spent on infrastructure, giving the sector no shortage of opportunities. Parlon is emphatic that value for money is now an intrinsic part of how the industry operates.

"Where once you had four or five tenders for, say, a school-building project you now have 10 or 11. There is extremely good value to be had from infrastructure spending now," he claims.

On top of the the NDP, Parlon points to the £12bn that will be spent preparing London for the 2012 Olympics "We speak the same language and London is less than an hour's plane journey away. It's a glorious opportunity for us to get involved in new business," Parlon says.

His members weren't slow on the uptake. When Enterprise Ireland organised a recent seminar on the event, 260 of them showed up. Casting its net even further afield, the CIF is busy promoting places such as South Africa and Dubai as target markets for Irish construction firms.

"Another big opportunity is environmental awakening. That is the major growth area," he says. The Federation is hiring an environmental director to provide its members with expertise in new types of environmentally friendly construction.

Parlon will have far more influence over the future of policy than he would have had were he still in politics: Like all his career moves, this latest is very well timed.

As president of the IFA, he presided over arguably the last Indian summer of the agricultural sector, a sector now in decline. His next job involved successful involvement in a small but highly influential party in government. Whatever the immediate challenges facing the sector he heads now, Parlon is convinced that the only way is up for Ireland's construction industry.

"I'm totally motivated by the job. I do appreciate how important it is," he says.

Marc Coleman is Economics Editor of Newstalk 106 and 108. His new book, 'The Best is Yet to Come', will be available from the end of this month from all good bookstores.