I am at some disadvantage in writing about the All-Party Oireachtas Committee Report on Private Property as I was out of the country at the time it was published and missed the comments that no doubt appeared in the media following its publication. However, my own impression is that this is a valuable document, which strikingly demonstrates the capacity of our politicians to work constructively and effectively when they are temporarily removed from the field of inter-party warfare, to which for most of their working lives they are condemned by the requirements of adversarial democratic politics, writes Garret FitzGerald
The key recommendation of this report - that an updated and somewhat extended version of the Kenny Report of the early 1970s be now given legislative effect - raises the question as to why that report was not adopted and implemented by the National Coalition Government of 1973-1977, of which I was a member.
I have only a general recollection of the discussion that took place in Cabinet on this issue, but recall being disappointed that the report was not adopted because of doubts about whether, in the light of the composition and tenor of the decisions of the Supreme Court of that period, its implementation would have withstood judicial scrutiny.
Why we allowed such doubts to inhibit a decision to have the issue tested in the courts is less clear to me now, for that government was in many respects a radical administration which, for instance, was clearly not intimidated by opposition to its introduction of a tax on assets in replacement of death duties. The abolition, by subsequent governments vulnerable to property interests, of that assets tax and of domestic rates, as well as of the later residential property tax, is one of the factors that in due course contributed to the massive rise in Irish house prices which has placed today's younger generation at a serious disadvantage in home formation.
It was, I believe, unfortunate that in 1985 the Joint Oireachtas Committee on Building Land, established by my second government, also backed off the Kenny Report, preferring a system of development levies, because the implementation of this recommendation by means of a special higher rate of capital gains tax on development land later proved vulnerable to the accusation of reducing the amount of such land being brought to the market. As a result the capital gains tax on development land was later reduced to the standard rate, and, when nothing was then done to fill the resultant gap in the system, huge windfall gains inevitably accrued to landowners and developers.
This has been one of the principal sources of the almost unique level of inequality in Irish society.
I am glad to see that, in the light of some more community-oriented decisions by the courts on property issues in recent decades, the present Constitution Committee has felt able to accept the Kenny recommendation, and indeed to go beyond it in one important respect.
It proposes that the planning authorities be authorised not merely, as Kenny had suggested, to acquire at agricultural value plus 25 per cent any land in respect of which the State has provided, or is about to provide, physical infrastructure, but also to acquire in this way other land whose value has been increased due to zoning decisions of planning authorities.
This report notes that the planning system as presently operated does not ensure the timely release of development land on to the market. It suggests that this could be secured by increasing development charges during the currency of a development plan - at first setting the base rate at a level that would reflect the urgency of developing any particular piece of land, and then increasing it gradually to a point where after six years the charges will have wiped out any windfall gain over and above the agricultural value of the land.
Because of the complexity of the issues involved, and the scale of the consultations undertaken - over 50 submissions totalling over 250,000 words - the 14-member Constitution Committee, (the secretariat of which was provided by the Institute of Public Administration), has taken over four years to report since the Taoiseach first asked them to examine the issue. The test of the present Government's commitment to the public good in relation to this matter will be the speed with which it now proceeds with the implementation of this key recommendation.
It should, perhaps, be added that, whatever criticism may be made of the private sector, its achievement in increasing the rate of house-building to 16,500 dwellings per million population - almost six times higher than the housing rate per million population in Britain - has been little short of phenomenal. That record contrasts sharply with the fact that the public sector has not only failed to provide adequate social housing, but also totally failed to make provision during the Celtic Tiger years for the huge increased demand for housing infrastructure, healthcare, public transport, or even electricity that was the inevitable outcome of this very rapid economic growth The truth is that despite early warnings of imminent rapid economic growth by the Economic and Social Research Institute, our public authorities were deplorably slow to recognise the onset or subsequent development of the Celtic Tiger, failing to adjust public policies to the needs of this new situation until it had virtually run its course.
This failure created the conditions in which elements of the much more alert private sector were enabled to exploit the consequent shortages in such a way as to transfer massive amounts of resources into the hands of a tiny minority of the population.
That failure on the part of successive governments in the 1990s was later compounded by the decision on the part of the Fianna Fáil/PD coalition at the end of the decade to boost overall demand for electoral reasons - just as what had by then become a full employment economy began to overheat.
The inevitable result of these grave policy errors has been both a dramatic surge in inequality, putting us at the wrong end of the European equality stakes, and also a quite unnecessary bout of domestic inflation which has led to a sharp deterioration in our international competitiveness that it will now be next to impossible to retrieve.
Historians will not be kind to the politicians who managed to make such a mess of the opportunities created by the series of wise decisions by earlier governments of both complexions from 1956 onwards, (that of 1977 to 1981 excepted), which together made possible the Celtic Tiger.
gfitzgerald@irish-times.ie