The Irish Construction Industry Federation (CIF) has says it has given the Irish Government a get out of jail free card with a 10 point plan to revive the ailing Irish economy and recreate the construction jobs being lost in the current downturn. And all of this will come at no cost to the Irish exchequer. CIF Director General Tome Parlon says: “the 10-point economic plan would cost the Exchequer nothing and in reality would generate significant revenue flows”.
CIF’s 10-Point Plan
1. Stamp Duty holiday for homebuyers until end of 2009 In order to increase the volume of property transactions in 2009, thereby supporting the flow of VAT and other property-related taxes, and re-igniting private consumer-led economic activity, stamp duty on transactions of residential property should be halted until 2010.
2. Tax credit scheme for first- time buyers Mechanisms to release the volume of VAT tied up in built but unsold houses would provide a significant boost to Exchequer receipts and support the national economic recovery.
3. Deliver on planned direct Exchequer capital spending, with particular focus on labour intensive projects within the National Development Plan
Falling construction activity has resulted in lower tender prices across the construction sector, providing the State with a narrow window of opportunity. Because of the enormous labour-intensity of construction work, investment in public building has an immediate payback in terms of employment taxes and wider induced economic and employment activity.
4. Use off-balance sheet funding mechanisms to bring forward additional projects 80% of all Irish pension funds are invested overseas, and mechanisms must be explored to prevent this further flight of capital out of Ireland into overseas property.
5. Stamp duty holiday for commercial developments until end of 2009 In order to attract investment into Irish commercial property, Stamp Duty should be abolished for all property transactions in 2009. Because there are no transactions taking place in any case, this abolition will be cost-neutral, but will promote competitiveness of Irish commercial property compared to our competitor economies.
6. Expedite processing of planning applications at local authority and An Bord Pleanala level Hundreds of planning applications for small-scale residential improvement works and other larger labour intensive developments are currently delayed within the planning system. These applications should be prioritised and dealt with within the statutory time period.
7. Employers holiday on PRSI and PAYE payments to help reduce unemployment Unemployment is going to be the most vicious consequence of this recession. As workers in all sectors of the economy move from being contributors of taxation through their employment to recipients of social welfare benefits, the Exchequer faces a double blow. The most immediate way of countering this is to reduce the costs of PRSI and PAYE contributions during the next year.
8. Prevent banks from stopping overdrafts without six months' notice Construction is an investment activity and as such the banking sector has an important role in ensuring that investment in construction projects can be commenced and continue though the construction cycle. Irish businesses, across all sectors, are facing significant difficulties when dealing with their banks, whose willingness to deliver on their promises no longer exists. Just as with the planning system, a number of employment-protecting construction jobs are ready to commence if only the banking sector would re-open the normal lending procedures.
9. Remove cap on tax deductibility for charitable donations Charitable donations are a vital source of income for all charities in Ireland. But current regulation does not allow charities or corporations to maximise the impact of these charitable donations. Government should instigate reforms to remove the cap on tax deductibility for Irish companies who donate to registered Irish charities.
10. Slash top VAT rate to below UK's until end of 2009 Competition between leading European economies is growing as the volume of world economic activity falls. Ireland’s prohibitively high VAT regime undermines Irish competitiveness compared to the United Kingdom. To prevent further flights of investment from Ireland to Northern Ireland or Great Britain, the top rate of VAT in Ireland should be reduced to below that of the United Kingdom for the remainder of the year.
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Wednesday, April 1, 2009
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