Category: Archive

Business Briefs Home crisis: wrestling with the Celtic Tiger

February 16, 2011

By Staff Reporter

By Harry Keaney

The Irish government recently announced measures to curb skyrocketing house prices.

First-time buyers of houses worth less than £150,000 will now be exempt from stamp duty. A flat rate of 9 percent will apply in the case of investors purchasing new or second-hand homes.

However, the president of the Irish Auctioneers and Valuers Institute, Eddie Barret, said that the measures would not ease the situation for first-time buyers.

The measures include the introduction of three-year anti-speculative tax of 2 percent per annum on investors purchasing residential properties for non-owner occupation. Exemptions will apply in certain cases and for certain landlords. The anti-speculative tax applies to properties on which contracts are signed on or after June 15, 2000.

The implementation of "strategic development zones" will ensure the fast-track development of large-scale residential schemes. The owners of land in those zones will be penalized with a landholding tax of £3,000 per house-site if they do not develop those sites within a specified period of time.

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Other measures include an extra 1,000 local authority housing units per annum from this year to 2006.

Taoiseach Bertie Ahern said there had been a rapid expansion in house prices and that this social transformation had occurred at a faster and greater pace than predicted. He stressed that housing is not a short-term issue and that the government must implement sustainable solutions that deal with problems that Ireland is now experiencing.

The Irish Academy of Engineering welcomed the measures to deal with the housing crisis but said housing, transport, and social infrastructure have reached crisis point in Dublin, and will get worse, unless a strategy is adopted to plan for future growth.

Forgotten nest eggs

Memo to Irish people in the U.S.: Might you have an unclaimed insurance policy in Ireland or perhaps even some cash in a forgotten bank account? A Dáil committee was told last week that an estimated £116.5 million has been lying untouched in dormant accounts for the last 15 years. The money is in banks and other financial institutions and includes up to £7.5 million in unclaimed insurance policies. Some of it is in post office savings accounts.

Aer Lingus flotation

The minister for public enterprise, Mary O’Rourke, has published the Aer Lingus Bill, which paves the way for the privatization and flotation of the state airline.

O’Rourke is sticking to the original target timeframe of floating the company later this year, or early next year.

Negotiations with the unions representing staff are due to begin in the next few weeks.

O’Rourke has invited the unions representing the 6,000 employees to discuss what percentage of the company staff might be able to own going into a flotation. The union IMPACT, which represents nearly 1,000 of the airline’s employees, is seeking a 15 percent stake in the company, on top of the 5 percent already held by individual staff members. Another union, SIPTU, which represents most of the employees, has yet to state its position.

Euro on the way

The Republic of Ireland’s Central Bank has begun producing euro bank notes, more than 18 months before they are due to go into circulation. Irish euro coins will have an image of the harp.

Euro notes and coins will be introduced into circulation in Ireland on Jan. 1, 2002. National notes and coins will be withdrawn by early February. Accounts in financial institutions will be converted to euros, withdrawals from accounts will be in euros, ATMs will begin dispensing euro notes and wages, salaries, pensions and welfare payments will be in euros. Retails will charge in euros. Although they will continuing accepting Irish notes and coins initially, change will be given in euros only.

And from midnight on Saturday, Feb. 9, 2002, Irish notes and coins will no longer be legal tender.

CRH acquisitions

CRH has paid $160 million, including debt, for two companies in the U.S.

CRH’s American arm, Oldcastle Materials, is to buy Dolomite Group in New York State and Northern Ohio Paving Company.

Dolomite and NOPC produce aggregates and asphalt. Dolomite also produces ready-mixed concrete while NOPC is also a paving contractor.

Earlier this year, Oldcastle paid $350 million for the Shelly Company in Ohio. Last July, the company bought Thompson McCully, in Michigan, for $422 million.

Shortage of nurses

There was a time when Irish nurses in their thousands worked in England, the U.S. and Australia. Now, there is a shortage of nurses in Ireland, so much so that a group of 31 Filipinos arrived in Dublin last week to take up positions in the Mater Hospital in Dublin. And reports say the number could reach 500 within two years.

It is estimated that Dublin is short between 1,000 and 1,500 nurses.

Sellafield risk

Plans to dismantle the nuclear reactor at Sellafield have been delayed because of safety concerns. According to a report in New Scientist magazine, work to decommission the reactor was put on hold because engineers feared that 15 tons of uranium fuel at the site could ignite.

The decommissioning project is being carried out by a consortium which includes British Nuclear Fuels Limited.

Elderly at risk

Ireland’s minister for social community and family affairs, Dermot Ahern, has expressed concern at the closure of branches of banks in towns and villages around the country. Ahern said that the closures had implications for the safety of elderly people who may be forced to keep their money at home.

Speaking on the RTE radio program "Morning Ireland," he said that the banks should rethink the closure of branches in rural areas.

However, it is expected that banks throughout Europe are in for a wave of consolidation with smaller institutions being gobbled up by bigger European, and perhaps even U.S., competitors. In this scenario, it’s likely that more bank branches in many rural towns and villages in Ireland will be phased out as the megabanks move away from traditional time-consuming retail business.

Former union leader dies

The trade unionist Matt Merrigan died recently, aged 78.

He was president of the Congress of Trade Unions in the mid-1980s.

Suffer the children

Ireland now has twice as many golf courses as playgrounds for children. According to Sugraidh, a children’s advocacy group, there is one playground per 19,000 head of population, compared to one golf course per 9,000.

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