For years the big business lobby in Ireland had a free pass into Government buildings. This didn't mean they got everything they wanted. But they did get a lot. Warnings about potential job losses – or gains – held a lot of sway.
The lure of multinational investment meant tax rules were tweaked and tweaked again.
And for many years any whisper that something might “upset the property market” was enough to put a quick stop to many a ministerial plan.
Policy generally operated on the basis that what was good for business was good for the country. Things are starting to change.
Just this week, the move to limit rent increases to 4 per cent a year in certain areas came despite intensive lobbying by the property sector, and warnings that it would restrict the building of new houses and apartment developments.
It may well do so, even though the scope of the scheme is limited to three years and a 4 per cent cap is not bad in a low inflation environment for investors.
Nor was this an isolated incident. It quickly followed the measures in the Finance Bill to change the taxes on investment funds located here which hold Irish assets.
Controversy erupted when it emerged that so-called vulture funds which had gained control of distressed Irish loans – and the properties attached – were legally structuring their operations to avoid tax on the resulting income.
Warnings that vulture funds had put money in here on the basis of one set of rules, only to see them changed, and that this could hit prices and future investment were ignored.
The change went ahead, albeit with some protections for long-term fund investors.
Business trinity
Before the crisis, this would not have happened. For years the Irish big business trinity of the multinational, property and banking sectors ruled. Such changes would have been killed off by lobbying.
Remember the property tax breaks which played a role in inflating the market through the late 1990s and into the 2000s? These were extended – and extended again.
This was all done in the name of “ protecting the property market”. And even when they were closed down in 2006 existing investors continued to benefit under “ transitional arrangements”.
We are, unfortunately, reaping the harvest of this today. We have a broken market, a scarcity of new supply and rising prices and rents. There is simply no quick way to fix this, though the obvious point is that boosting supply will do so in the long run.
The Hobson’s choice facing the Government is how to balance the incentive to build new houses with ensuring that those renting are not gouged yet further.
The problem is that achieving both these goals simultaneously is hugely difficult and the mix of the rent freeze introduced in 2015 and the new 4 per cent caps make the whole market look a bit messy and uncertain.
Meanwhile, measures to boost supply – particularly via promoting “build to rent” schemes – remain woolly.
Politics, particularly in the populist era, demands that something is “done” to address the immediate problem, but the real test here will be the long-term measures to boost the building of new properties.
That the Government decided to impose the future rent restrictions – and Fianna Fáil eventually signed up after 48 hours of the ritual political dance – is interesting. Business still gets its way on a lot of things.
The Ireland Inc lobby remains strong. But it is no longer shooting into an open goal.
This, of course, is in line with a growing international scepticism of big business, a key part of the new populism sweeping the political world. Big business hasn’t helped itself either.
The gradual unpeeling of the tax arrangements used by many of the top US multinationals has had a huge public impact.
The European Commission judgment that Apple must pay Ireland €13 billion may or may not hold up in the European courts, but either way it has shone an extraordinary spotlight on what happened.
Whether the courts judge that this was all legal or not is, to an extent, beside the point.
No trickle-down
The problem for business is that the promise that supporting it would in turn create gains for all is now a broken model.
The gains all seem to be going to the chief executive, the board and the big shareholders.
Yes, jobs are created and this has been a real strength of our economy. But the trickle down is not trickling – or at least not as much as it should.
There is now a feeling that business has “got away with it” for too long.
Just look at the public suport for the occupying of the Nama building in Dublin for the homeless – people feel instinctively that even if this kind of thing upsets “business” a bit, the protesters are making a valid point.
We can still expect the business lobby to remain a powerful voice here. US multinationals, for example, remain key employers and big payers of corporation tax. The financial services lobby remains well organised and powerful.
Ministers will always be wary of doing anything which affects investment and jobs.
But Ireland is not immune to the international mood. Politicians are fighting for their own survival and whether you call the resulting policies “populist” or just restoring some balance is beside the point.
Businesses will now have to fight much harder to be heard – and even when they are listened to, they can’t always expect a positive answer.