Friday 24 November 2017

People deserve help from the State -- not moralising

Giving taxpayers back their stamp duty would be a start in renewing the economy, says Marc Coleman

Marc Coleman

Marc Coleman

'You are all practising and practical politicians and you will be fairly aware of the clientele in every constituency, and you will have a queue down in the clinic looking for write-offs on Monday morning if there is any announcement of universal write-offs."

With a single sentence, Michael Noonan knocked the idea of blanket debt forgiveness on the head last Friday. But it's amazing how you can mean to say one thing only to end up saying something totally different. Noonan is right, a stampede of 'me-too Me Feiners' would be the most likely results of a blanket debt forgiveness policy. Sadly, Noonan's warning has come far too late. And when Patrick Honohan chimed in that he opposed "banks giving gifts to borrowers", one wonders how carefully he thought about it beforehand. As regards Mr Noonan's comment, the "queue down in the clinic" syndrome has already taken its toll. How else did builders and developers get tax breaks and planning permission for reckless speculative development? How else did banks get the last government to turn a blind eye to the regulator's crazy lending practices? How else did trade unions get their piece of the action from the huge property tax bonanza -- which was paid for by those very mortgage borrowers who now need help -- to feed their ridiculous pay rises, rises so generous that leading trade unionist Brendan Ogle admitted his members were "spoilt" and enjoying "gravy" and "great jobs". As regards Mr Honohan's point, were all these not "gifts" from borrower-taxpayers to bankers, developers and the public sector and, if he agrees, is he opposed to this as well?

Mr Honohan also warned that a blanket forgiveness could bring us all back to square one by depleting bank capital. On that last point, he is right. Having said that bank recapitalisation involved tens of billions injected as a result of reckless commercial lending. Injecting a fraction of this into borrowers who were fleeced by the mistakes of banks and the regulator and by the greed of developers (via high prices) and Government (via stamp duty) is hardly a threat to the banking system.

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