General Irish Government discussion thread [See Post 1805]

James Brown

FreudianSlippers wrote: »

So you admit it's costing the taxpayer nothing extra. Great.

The state using tax payer money is financing private developers in the gain of private profit while supporting the tax payer in a crisis is avoided.
It is cheaper for the state to build social and affordable housing. Currently we are spending more as the crisis grows. These are facts.

It's obvious you're only interested in one-upmanship.
I'm here to discuss politics and government policy.
You're ignoring and dodging and fudging for sport. Good day.

blanch152

Matt Barrett wrote: »

The state using tax payer money is financing private developers in the gain of private profit while supporting the tax payer in a crisis is avoided.
It is cheaper for the state to build social and affordable housing. Currently we are spending more as the crisis grows. These are facts.

You keep putting this position forward, yet I haven't seen a single fact to back up what is just your opinion.

It is certainly true that you believe that it is cheaper for the state to build social and affordable housing, but I haven't seen a single piece of credible evidence that this is anything more than an opinion of yours.

Red_Wake

Matt Barrett wrote: »

FreudianSlippers wrote: »

So you admit it's costing the taxpayer nothing extra. Great.

The state using tax payer money is financing private developers in the gain of private profit while supporting the tax payer in a crisis is avoided.
It is cheaper for the state to build social and affordable housing. Currently we are spending more as the crisis grows. These are facts.

It's obvious you're only interested in one-upmanship.
I'm here to discuss politics and government policy.
You're ignoring and dodging and fudging for sport. Good day.

The state is giving low interest loans. Presumably all this money is expected to be paid back. 

You could argue there's an opportunity cost for the period of the loan due to the initial sum not being available, but as the state will be reaping a profit on the loan[presumably a small profit tbf], but as this costs nothing in the long term, it could be agued that it's the cheapest option, albeit with an element of risk[developers could go bust] and an opportunity cost[money not spent elsewhere].

James Brown

Red_Wake wrote: »

The state is giving low interest loans. Presumably all this money is expected to be paid back. 

You could argue there's an opportunity cost for the period of the loan due to the initial sum not being available, but as the state will be reaping a profit on the loan[presumably a small profit tbf], but as this costs nothing in the long term, it could be agued that it's the cheapest option, albeit with an element of risk[developers could go bust] and an opportunity cost[money not spent elsewhere].

Yes. I said the state is loaning tax payer money through NAMA to private developers who will make private profit. We are lending at a rate of interest far lower than financial institutions are. This is to encourage new builds, but they are private builds which will be sold at market rate.
So as I said, NAMA is financing private builds with loans using tax payer monies for the profit of private developers. It's a win for them and the tax payer has more options on homes many can't afford. Then as is often the case, the tax payer provides grants to buyers or subsidises rents on these private builds. Or even worse, maybe the state buys them at market rate after giving a cheap loan so the private builder could gouge the tax payer and/or state come sale time. This is bad policy IMO.

How is any of this a better deal for the tax payer than state built affordable or social housing? We are spending money to make matters worse, where the more better deal for the tax payer is also one that will help lessen the effect of the crisis and in turn lessen the reliance on emergency accommodation and private entities.

You've not answered my earlier questions.
Do you think current policies such as the above are a better deal for the tax payer? We know they make the crisis worse. Leo's 'no quick fix' is an insult considering his slow fix makes matters worse. I'd like to know when he's thinking of starting a fix at any pace.
His and Eoghan's new gimmick is more of the same. Only 40% of the publicly owned land will be ear marked for social or affordable housing. Is this the work of the dastardly LA's? No. While they carry blame they are not stopping Leo and Eoghan from any new direction.

McMurphy

blanch152 wrote: »

You keep putting this position forward, yet I haven't seen a single fact to back up what is just your opinion.

It is certainly true that you believe that it is cheaper for the state to build social and affordable housing, but I haven't seen a single piece of credible evidence that this is anything more than an opinion of yours.

Do people really need proof that it would be more economically sensible to build something, that they then own as an asset than perpetually paying for someone else's asset, ie a private landlords mortgage or the use of a hoteliers facilities?

Short term, of course the two may overlap, but long term?

C'mon this isn't rocket science here.

James Brown

Johnny Dogs wrote: »

Do people really need proof that it would be more economically sensible to build something, that they then own as an asset than perpetually paying for someone else's asset, ie a private landlords mortgage or the use of a hoteliers facilities?

Short term, of course the two may overlap, but long term?

C'mon this isn't rocket science here.

Or lending money so they can build homes we later buy off them at market rates.
How folk can't see this as a bad deal than financing our own builds is beyond believable.

I think the denial car clocked over. They've exhausted the 'where will the money come from' pitch and reverted back to a blank slate of needing it all explained again.

blanch152

Johnny Dogs wrote: »

Do people really need proof that it would be more economically sensible to build something, that they then own as an asset than perpetually paying for someone else's asset, ie a private landlords mortgage or the use of a hoteliers facilities?

Short term, of course the two may overlap, but long term?

C'mon this isn't rocket science here.

Firstly, when you take into account that the local authorities can't be bothered/are unable to collect rent, then yes. Any analysis would have to take into account that additional element of incompetence that the LAs have.

Secondly, lending money to developers at low interest to build private housing, of which an element must be affordable housing can deliver a multiple of private housing as the only cost to the exchequer is the element of subsidisation in the interest, which means the cost could be as low as 1% of the cost of building social housing, assuming that the LAs could manage to keep the cost of building social housing at the same level as the private sector. It 10% of each private development is earmarked for affordable housing, then you probably get at least 10 times as many houses built for the same money as letting the LAs do it. You see, two different models can have two different outcomes.

McMurphy

blanch152 wrote: »

Firstly, when you take into account that the local authorities can't be bothered/are unable to collect rent, then yes. Any analysis would have to take into account that additional element of incompetence that the LAs have.

Unable to collect rent wouldn't matter in the long run, there's still an asset that they own. Not so in a private landlord/ hotel arrangement.

James Brown

Johnny Dogs wrote: »

Unable to collect rent wouldn't matter in the long run, there's still an asset that they own. Not so in a private landlord/ hotel arrangement.

Its a derailment that's been put to bed. As I say we've gone full circle. Even Leo rolled out 'no quick fix' near 8 years in.
It avoids the uncomfortable reality that the vast majority suffering the housing crisis are working tax payers.

I asked directly which was the better deal;
Building and renting our own, even taking into account arrears.
Or Buying off the market and using as social housing anyway? On the fourth time I gave up asking.

We can either build and rent our own to people or buy off the market and rent to the very same people or pay gouging private landlords to house the very same people.
It's a nonsense to continue as is, that anyone believes this is the way to go, considering the crisis.

We can build and rent out or we can buy at market rates and rent out.
Currently government is wasting our tax money while exacerbating the crisis due to stupidity or intent.

Wheeliebin30

I’m doing some general maths here.

Government builds house for 300,000.

Rents it for let’s say 400 a month.

Would take approx 60 years just to break even by the the house would be nearly done to be knocked.

This whole asset talk doesn’t make any sense.

Building 100,000 social houses would bankrupt the country.

Sam Russell

Wheeliebin30 wrote: »

I’m doing some general maths here.

Government builds house for 300,000.

Rents it for let’s say 400 a month.

Would take approx 60 years just to break even by the the house would be nearly done to be knocked.

This whole asset talk doesn’t make any sense.

Building 100,000 social houses would bankrupt the country.

Well, when you do the maths, remember the contributions.

1. Site cost - already owned by Gov.

2 Labour cost - 30% goes to Gov in taxation.

3. Private developer gets margin of 16% - avoided if Gov ageny does the developing.

4, Social housing goes to homeless so saving cost of emergency accommodation.

5. Affordable housing is not sold at a loss - as site cost is recovered.

6. Rest of development subsidises the other two categories.

The ratio of each category should be a third each. The construction should be carried out by registered competent builders.

Geuze

blanch152 wrote: »

It is certainly true that you believe that it is cheaper for the state to build social and affordable housing, but I haven't seen a single piece of credible evidence that this is anything more than an opinion of yours.

This is true.

Obviously, as the developers margin is not involved, there's a 50k cost cut straight away.

The DPER has recommended more building and less pending on HAP, as paying inflated rents is more expensive than building houses:

https://www.rte.ie/news/2018/0721/980007-social-housing-george-lee/

Geuze

https://static.rasset.ie/documents/news/2018/07/19.-current-and-capital-expenditure-on-social-housing-delivery.pdf


Key Findings

 Based on the limited available data, indicative cost analysis across six Local Authorities indicates that over the
long term, the relative cost effectiveness of each of the delivery mechanisms differs across areas.

 It is estimated that, based on the Local Authority areas analysed, the net present cost (NPC) of delivering units
through mechanisms such as HAP, RAS and leasing is higher than construction and/or acquisition in Fingal and
Meath where prices within the general housing market are higher, while the NPC of those mechanisms is
generally either at or below the estimate for construction in other areas where prices in the wider market are
not as high (e.g. Mayo and Tipperary).

Geuze

Wheeliebin30 wrote: »

I’m doing some general maths here.

Government builds house for 300,000.

https://static.rasset.ie/documents/news/2018/07/19.-current-and-capital-expenditure-on-social-housing-delivery.pdf

 Estimates of the cost for 2 and 3 bed units through LA direct construction have been provided by DHPLG based on the construction cost for units delivered between 2016 and 2017, cost guidelines for units in Q4 2017 and the
average tendered costs for units being delivered in 2018.

The estimated unit all-in costs (i.e. including land costs
and excluding abnormals) within the analysis range from €175,000 to €195,000 for a 2 bed and €190,000 to €210,000 for a 3 bed.

Geuze

Wheeliebin30 wrote: »

I’m doing some general maths here.

Government builds house for 300,000.

https://www.linesight.com/knowledge/2018/ireland/linesight-average-irish-construction-costs-2018

https://www.irishtimes.com/business/construction/cost-of-building-a-new-family-home-rose-7-5-in-past-year-1.3624692

This is the hard construction cost, not the total cost.

Linesight estimates building 100sq m dwelling costs between €126,000 and €161,000

blanch152

Geuze wrote: »

https://static.rasset.ie/documents/news/2018/07/19.-current-and-capital-expenditure-on-social-housing-delivery.pdf

 Estimates of the cost for 2 and 3 bed units through LA direct construction have been provided by DHPLG based on the construction cost for units delivered between 2016 and 2017, cost guidelines for units in Q4 2017 and the
average tendered costs for units being delivered in 2018.

The estimated unit all-in costs (i.e. including land costs
and excluding abnormals) within the analysis range from €175,000 to €195,000 for a 2 bed and €190,000 to €210,000 for a 3 bed.

It also states the following:

"There are also a number of wider policy considerations that are relevant including;
o effectiveness and targeting of support;
o sustainability and equity of tenant contributions across Local Authority areas; and
o appropriate and cost effective social housing stock management/renewal and the overall capacity of, and
impact on, the wider housing market"

When you take into account the complete incompetence of the LAs, especially those in the Dublin area, and adjust for the above factors, you may get a different result.

blanch152

Wheeliebin30 wrote: »

I’m doing some general maths here.

Government builds house for 300,000.

Rents it for let’s say 400 a month.

Would take approx 60 years just to break even by the the house would be nearly done to be knocked.

This whole asset talk doesn’t make any sense.

Building 100,000 social houses would bankrupt the country.

You will need to revise your figures.

The document provided by Gueze includes the following statement:

"Census indicates that the average weekly rent paid by those renting from a LA has increased from €59 per week in 2011 to €69 in 2016"

That translates to €280 per month, less than your €400.

Edward M

The support for govt is holding firm despite the crisis.
Fianna Fail is in freefall, they will soon have to ask themselves why?
The end of this govt could be brought about more by FFs unpopularity than by anything the govt is or isn't doing!
https://www.rte.ie/news/2018/0915/993987-opinion-poll-politics/

Wanderer78

Edward M wrote:

The support for govt is holding firm despite the crisis. Fianna Fail is in freefall, they will soon have to ask themselves why? The end of this govt could be brought about more by FFs unpopularity than by anything the govt is or isn't doing!

What crisis would that be?

Edward M

Wanderer78 wrote: »

What crisis would that be?

Take you pick, read the thread.
Housing, health, are but two.
Unless of course you can't see any crises?

Idbatterim

Unless ff back usc abolition or universal public housing, ie something significant, that fg won’t do. They are going nowhere... a fifty thousand grant for the housing crisis was their proposal last week, they never learn, morons, I’m delighted they won’t be crawling out of the hole they dug themselves a decade ago ...

Idbatterim

Wanderer78 wrote: »

What crisis would that be?

The housing catastrophe for a start ...

Edgware

The best thing that could happen is that FG would actually believe these polls. Underneath there is a very steady discontent with matters that someone with real leadership could solve. It is of course a matter of priorities. FG want to look after the lawyers and top medical professions rather than kids waiting for life changing scoleosis treatment.

Edward M

Edgware wrote: »

The best thing that could happen is that FG would actually believe these polls. Underneath there is a very steady discontent with matters that someone with real leadership could solve. It is of course a matter of priorities. FG want to look after the lawyers and top medical professions rather than kids waiting for life changing scoleosis treatment.

They will all look at this poll and worry, FF especially I think, and MM in particular, he isn't moving them forward in a popular way, is he?
Your end statement is a bit of a big point, how did you come to your conclusion on that?

blanch152

Edgware wrote: »

The best thing that could happen is that FG would actually believe these polls. Underneath there is a very steady discontent with matters that someone with real leadership could solve. It is of course a matter of priorities. FG want to look after the lawyers and top medical professions rather than kids waiting for life changing scoleosis treatment.

The only leadership available is in FG.

Micheal Martin remains tainted by the FF government that ruined the country. Sinn Fein are justifiably not trusted by 80% of the country because of their recent past. Paul Murphy and the left can only lead a mob.

That leaves just FG. There is no other credible Taoiseach unfortunately.

Doesn't mean I will vote for them, but the above is what people will see.

PeadarCo

Edgware wrote:

The best thing that could happen is that FG would actually believe these polls. Underneath there is a very steady discontent with matters that someone with real leadership could solve. It is of course a matter of priorities. FG want to look after the lawyers and top medical professions rather than kids waiting for life changing scoleosis treatment.

Why are you surprised the economy is going very well. The housing crisis while an issue will take a few years to solve regardless of who's in charge. It also only impacts those who are renting and or looking to buy. If you own a home it has a positive impact as it increases your wealth on paper.

And who else do you vote for at the moment all political parties are trying to imitate FF in 02/03 spend spend and to hell about the future. Its crazy that there's any talk of tax cuts on a broad scale. The time to cut taxes is in a recession not a boom. Now is the time to increase taxes if anything.

PeadarCo

PeadarCo wrote: »

Why are you surprised the economy is going very well.

Probably a bit of a tangent here, but i'm surprised the economy is doing well.

Ireland is an outlier, maybe even a basket case, when it comes to sharp cuts in fiscal spending being associated with major periods of economic growth.

when discussing the fiscal consolidation of the late 1980's, early 1990s, the subsequent economic boom used to be regarded in the economic literature as if it were some freak anomaly, it went completely against the received wisdom. Now we've just repeated it.

No other economy that I'm aware of has experienced a massive consolidation/ economic boom sequence on this scale, certainly not twice!

I'm not saying this to be self-congratulatory towards Irish people or the Government, it's bizarre, and in fact rather than being congratulatory, it should make us question the scale of the recovery, or at least how that recovery is measured.

PeadarCo

A Tyrant Named Miltiades! wrote:

Probably a bit of a tangent here, but i'm surprised the economy is doing well.

Why? we are a small open economy that's export focused. The US, EU and the UK have all been doing very well economically over the last few years. You would expect Ireland to be doing well as a result. The Irish electorate does not reward parties that implement counter cyclical policies. And to a degree it gets away with it because a lot of Irelands economic performance is determined in Washington, London, Paris, Berlin etc. Its why Brexit represents such a big challenge. Its also why leaving the EU would be catastrophic as we are heavily dependent on foreign companies.

PeadarCo

PeadarCo wrote: »

Why? we are a small open economy that's export focused.

That's far too vague an explanation to address what I'm talking about.

If we look back to the fiscal cuts of 1987-91, we see that the cuts were mainly on fiscal transfers (welfare) and on public investment. Similar cuts were undertaken from 2009, especially relating to public investment. On both occasions, there were large reductions in public-sector employment, largely due to early retirements and hiring freezes.

None of this (with the exception of a fall in unit labour costs), made the country more competitive to export markets; one would have expected the dramatic fall in public investment to have actually damaged competitiveness. but in fact private investment exploded on both occasions, and domestic demand rapidly recovered.

You can say this can be explained by the fact that Ireland is a small open economy, with a small fiscal multiplier (although the size of the multiplier is disputed in some ESRI research), but this is assertion not supported when we look at the recent examples of Portugal and Greece; of Denmark in the early 1980s, which initially seemed to recover, and then rapidly turned into a recession.

The Irish experience of 'expansionary fiscal contraction' is certainly an outlier, despite there being many examples of small open economies with which we might compare ourselves.

It is a uniquely Irish experience, and when something is described as 'uniquely Irish' in economics, I don't know about you, but for me, alarm bells start to go off.

PeadarCo

A Tyrant Named Miltiades! wrote:

That's far too vague an explanation to address what I'm talking about.

My point is you are placing far far to much emphasis and importance of Irish fiscal policy in determining the performance of the Irish economy . There are certain key elements the corporation tax and a more general strategy of welcoming FDI into the country. But beyond that I would question the overall impact of fiscal policy to the countries overall performance provided its some what compenent at least some of the time and you don't go down the route of Venezuela etc. A small open economy like Ireland is heavily impacted by decisions made in other countries. All our major trading partners have preformed well over the last few years so you would expect the country to benefit to a large degree and obviously the opposite is also the case. Its also why Brexit represents a huge challenge and the result of the negotiations will probably have a larger impact on the performance of the Irish economy in the short to medium term than any decision made in the budget.