Monday 19 August 2019

Rent impasse illustrates stagnation of New Politics

Housing Minister Simon Coveney’s approach to calming the rental market is not without its merit. However, the lack of New Politics contained means it will be watered down. Photo: Gareth Chaney
Housing Minister Simon Coveney’s approach to calming the rental market is not without its merit. However, the lack of New Politics contained means it will be watered down. Photo: Gareth Chaney

'New Politics?' Supposedly a new era has dawned where government policies are teased out in intricate detail and a consensus view is achieved with cross-party support. That's the theory - not the practice.

Housing Minister Simon Coveney's approach to calming the rental market is not without its merit. However, the lack of 'New Politics' in play means it is on the brink of collapse.

Coveney is well intentioned. He says he has done his research, got his expert advice, afforded interested parties their say and their views were considered. He wants to bring in a 4pc rent-hike cap in Dublin and Cork.

His detractors say he failed to consult and has come up with proposals which will merely inflate the rental market even further.

What's more, Coveney has indicated a lack of willingness for compromise. Is this principle or naiveté?

Unfortunately for the minister, his party does not enjoy an overall majority, so he has to take the views of Fianna Fáil on board. That party wants the rent cap extended to the commuter belts and other cities and the maximum rent rise reduced to 2pc a year.

If the opposition party is not satisfied, then the legislation underpinning the move won't fly.

Coveney and Fianna Fáil environment spokesman Barry Cowen met last night to discuss the impasse with no solution arrived at and both sides digging in.

There is a desire for resolution, but this is a classic example of the stagnation of New Politics.

In the meantime, landlords will be coming up with inventive ways to get around the caps and tenants are left with the uncertainty of not knowing where the rental market will be at after Christmas.

ESRI forecast is upbeat but we must be cautious

There are no hard facts in the future, only best guesses and possibilities which, with a bit of luck, can be polished into projections.

Nonetheless, when a seminal body such as the ESRI sets out its stall on what's on the financial horizon, it is not relying on planetary alignments.

Even so, like all forecasts, its outlook depends on there being no great shocks or disturbances to knock things off their axis.

And there is the rub - plotting a safe course through a minefield such as Brexit, as well as the uncertainties associated with an inward-looking and aggressive America-first policy under president-elect Trump, is problematic.

Providing nothing too terrible happens and the UK does not have a messy divorce from the EU, then we are set for growth rates of 3pc up to 2025. If this looks a bit too good to be true, it may well be.

For there are other worries. In the area which measures personal consumption growth, there may be a dip from last year's 6pc to 2pc. The EU also has a cold eye on our corporate tax rates, and with all the signs that Mr Trump intends to come down hard on US firms investing overseas, we have good reason to be wary.

Government borrowing must be tight as the probability of upwards pressure on interest rates cannot be over-looked. The ESRI assessment is broadly upbeat but there are good grounds for caution.

Irish Independent

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