Dublin Opinion

There is a common misconception that the PDs are somehow an ideologically-driven party – a shamrock-shaped soufflé of Margaret O’Thatchers and Friedrich MacHayeks, ‘promoting fairness by pro-competition, pro-consumer policies.’

The reality, however, is that the PDs treat ideology the way a school kid answers questions in Irish composition - search for the key words in the text, copy the sentences wholesale, and hope for the best. In truth, the PDs are just another bunch of Killinaskully councillors who are driven, with mundane predictability, by clientism.

Here’s why.

Michael McDowell has made much of his party’s desire to see stamp duty reformed so as to benefit the house-buyer, but by far the greatest single impediment to a house-buyer is not the cost of the actual house, but the cost of the land on which the house is built. And one of the strongest opponents to land speculation reform is the PDs very own Minister of State at the Department of Finance, Tom Parlon.

Despite the fact that around 80,000 new houses are built each year, the cost of a house continues to rise. The explanation touted by some commentators is that the demand for housing has not yet outstripped supply – despite the numbers - and until it does there is nothing the government can do. The market decides, so that’s the way it is.

Except, that’s not the way it is.

Simple supply and demand is nowhere near enough to explain the almost 1,000% increase in house prices since 1995.
According to finfacts.com, in 2003 site costs accounted for 42.5% of the final house-price – and that was a national average. It quotes the economist Jerome Casey, editor of the Building Industry Bulletin:

“…typically in the mid 1990s, Durkan Brothers sold apartments off O’Connell Street for £35,000 to £40,000 (€44,440 to €50,790) for which the site cost was £5,000. Currently, both the Irish Council for Social Housing and private house builders are reporting city house site costs at up to 50% of the house price. Outside the cities, site costs can represent up to 40% of the house price. For the country as a whole, site costs may now constitute 42.5% of the house price, an increase of almost 30 percentage points on the pre-boom position. In Dublin that increases to 50%. Overall the Irish figures are grossly out of line with the rest of the developed world.”

If demand drives prices, how come the actual land price is the figure on the steep march upwards? The answer lies in land speculation – the drip-feed of snapped-up agricultural land in order to create artificial demand.

The problem is not new, nor is the solution.

In 1973 the Report of the Committee on the Price of Building Land (Kenny report) advised that a policy of price-capping of development land should be introduced. Under its recommendations, Local authorities would be able to acquire land for housing at the agricultural price of the land plus 25%. The report has never been implemented. In February, Dick Roche announced that the government is about to introduce a ‘use or lose’ bill, whereby the government will compulsory purchase “land from owners who have failed to exploit its potential.”

That bill, however, will not be put before the house until after the election. Even with that, the bill is likely to be shelved, given Tom Parlon’s vocal opposition to any reform of land speculation as “gift-wrapped in an ideology somewhere to the left of Stalin” – a stance which, presumably, leaves Parlon somewhere to the right of Stalin.

The gift-wrapped quote comes from a speech Parlon made in 2003 at the annual Parnell summer School. “I have a great kinship with Charles Stewart Parnell and an interest in his life” said Parlon. “Everyday at my desk in the Office of Public Works he keeps a watchful eye over me.” Moving on to property, Parlon asked of the audience:

“What if your home, your business or your farm is zoned for development? Should you be allow reap the benefits of this? In a democracy of course you should… I believe that any attempt to freeze the value of land would cause more problems than it would solve and is a battering ram solution and legally lazy way to solve a very complex problem.
The common and unchallenged misconception is that land and property owners are all money grabbing capitalists who have only selfish motives at heart. Ireland is full of honest hard-working people who own property and penalizing their initiatives though putting some extra charge on private property is wrong. Are we really seriously considering transferring the property portfolio of private citizens to the Sates coffers, because these people have committed the sin of trying to make profit, and are as a result not deserving of constitutional protection? I hope not.”

Parlon’s objective is quite clear: he intends to protect the interests of the one small group within society for which he has always kept an eye out for: landowning farmers. On 22 November 2006 the Irish Independent reported that land owners were to get €4.6 billion in compensation for roads that pass either alongside or through their property – about 25% of the total road building costs – and a figure arrived at regardless of Roche’s ‘use or lose’ phantom bill.

Parlon’s ruthless pursuit of his clients’ interests, to the profound detriment of Ireland’s taxpayers and first-time house buyers, is not a principled stand to protect democracy - just one more stroke in a long line of stokes that go back to the foundation of the state. There is nothing remotely “pro-competition, pro-consumer” in Parlon’s actions. And his unchallenged position within the party makes a mockery of McDowell’s stamp duty storm to protect house buyers.

Parlon’s assertion that ‘in a democracy of course you should’ be able to indulge in profiteering to the detriment of the rest of society is a telling belief. What Parlon believes in is not democracy, but a clientocracy, for it is in a clientocracy where the select friends of influential parliamentarians get to reap the benefits.

Parlon had made the argument, as have others, that any reform of land acquisition is unconstitutional, citing with great energy article 43.1.2 of the Irish constitution.

This states:

43.1.2 The State accordingly guarantees to pass no law attempting to abolish the right of private ownership or the general right to transfer, bequeath, and inherit property.
However, those rights are qualified by the following two articles, which state:
43.2.1 The State recognises, however, that the exercise of the rights mentioned in the foregoing provisions of this article ought, in civil society, to be regulated by the principles of social justice.
43.2.2 The State, accordingly, may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.

“Social justice”, “the exigencies of the common good”, principles of a democracy, but not, I’m afraid, of the PDs and their clientocracy.

For all their talk of breaking the mould of Irish politics, the PDs are just one more group of stroke politicians in a long line of stroke politicians, and quite orthodox ones as well.

Remember, Parlon is not setting out to protect farmers’ livelihoods, but rather their unconstitutional right to fleece “civil society” - house buyers and other taxpayers - through land speculation. He is not setting out to protect jobs or communities, build schools or provide hospital beds, but rather he is using his considerable influence to ensure that obscene amounts of government money - billions of euros - goes towards a small select band within Irish society who are not producing anything, and who are not adding in any way to the wealth or richness of Irish society.

The Progressive Democrats –Thatcher’s dress, Haughey’s underwear.