Yesterday's Sunday Business Post
‘‘Consideration will be given to the selective application of new tax incentive measures in areas of evident market failure, particularly with National Spatial Strategy gateways and hubs.”
The regional towns designated as gateways in the strategy were Dundalk, Sligo, Letterkenny and a linked gateway comprising the midland towns of Athlone, Tullamore and Mullingar.
A spokesman for the Department of Finance confirmed that proposals were expected before the budget from the Department of the Environment.
- Do ye think this is market failure?????
- Do ye think this is market failure?????
The government has no business trying to correct some perceived failure of the market.
If I grew apples and sold an apple juice product for €15 a litre, which few people showed any inclination to buy - there would be no talk of "market failure". People would recognise the problem for what is - my product was priced higher than the market was willing to pay. Either I increase the quality or decrease the price, or both.
Of course, as we know, house building is not subject to the usual laws of supply and demand.
A bit of an overstatement surely. Surely one of the main reasons for having a state sector at all is the belief that an unrestricted free market would fail to deliver important elements of infrastructure, education, healthcare, employee protection, protection of the environment etc. While many disagree on what constitutes an appropriate amount of government interference in the market, there is no country in which the government does not address perceived market failure to some extent; this is in fact exactly what government is supposed to do.
The government has no business trying to correct some perceived failure of the market.
If I grew apples and sold an apple juice product for €15 a litre, which few people showed any inclination to buy - there would be no talk of "market failure". People would recognise the problem for what is - my product was priced higher than the market was willing to pay. Either I increase the quality or decrease the price, or both.
Of course, as we know, house building is not subject to the usual laws of supply and demand.
I don't agree. As a student in Galway in the mid-1980s I found myself walking home about 1am one night through Shop Street and Quay Street. Quay Street was absolutely deserted and was in a state of semi-dereliction, so much so that I genuinely feared for my safety. At the time, there were similarly "dodgy" areas in every large town in Ireland. The transformation of these areas was triggered by tax breaks that incentivised the redevelopment and repopulation of these areas. I don't think anyone could argue that this was not a good thing.
Whether tax incentives have been over-used or abused in the meantime is a separate issue. The point is that government intervention in the market is sometimes worthwhile and indeed absolutely necessary.
There was no evidence of any take-up of Section 23 (or property development of any sort) when I lived in Galway up to 1988.Section 23 relief was introduced in 1981
Not necessarily.so that's a fairly loose definition of "triggered".
The property tax breaks outlived their usefulness in most (but not all) areas. Most of them should have been scrapped around 1997. There was never much of a case for the Rural Renewal Relief or the Seaside Resorts Scheme, among others.How would you define "over-used or abused" - do you mean as in fraudulently applied for, or do you simply mean too many people availed of the incentive?
Really? My own neck of the woods is bursting at the seams with new property developments, and new service-sector businesses, none of which have benefitted from tax breaks.These days it seems almost every venture needs a tax break before it can get going (because otherwise it is starting at an immediate disadvantage to industries with tax breaks).
The army of civil servants trying to monitor and implement tax breaks continues to grow and hordes of tax consultants spend countless hours figuring out how trying to abuse them.
There was no evidence of any take-up of Section 23 (or property development of any sort) when I lived in Galway up to 1988.
Markets allow for the most efficient allocation of resources because people respond to the price signal. If something is in short supply, the price will increase and production will be increased to meet demand. If a good is in oversupply, the price will fall and production will be decreased. That's why there has never been a famine in a free-market economy.
What a crass statement. I suggest you check out your history books (hint: Ireland, 1840s).
An occupied colony ...
Ireland was an integral part of the United Kingdom in the 1800s. It was not a colony in any sense of the term.
"I don't consider government intervention in the market place ever to be effective or necessary. Any business is either worthwhile - in which case it will go ahead regardless of tax breaks - or not worthwhile, in which case the government has no business encouraging it."
This is just not true, and it does not promote useful debate when such a polarised view is adopted. As a business proposition, it is never going to be worthwhile to open public libraries in deprived areas - they just can't pay their way. It is never going to be worthwhile to carry out environmental improvements to farmland (as subsidised by REPS schemes and such like) because these improvements add nothing to farm profits. It is never going to be worthwhile to go into business in a market where there is a dominant player with deep pockets who can undercut you by selling below cost for long enough to put you out of business (a practice which government - by its interference in the market - makes illegal).
The free market does not deliver effective policing. The free market does not deliver effective fire brigade services (though of course fire brigades were originally a private sector endeavour). The free market does not deliver universal education (though in fairness I have seen some well-reasoned arguments that it could). The free market does not deliver effective competition in many areas where it is clear that the greater good would be served by ensuring such competition.
In short, is quite obvious that there are some markets where government intervention is both necessary and desirable. It is also quite obvious that there are markets where government intervention is neither necessary nor desirable. The 'government interference in the market' type issues which deserve reasoned debate may therefore be loosely categorised as being:
1. Markets where government do not interfere enough, and where it is argued that they should do more.
2. Markets where the government interfere too much and where it is argued that they should do less.
Without getting into an endless discussion of the history of the Irish famine I think it's fair to say that the political system in place was decisively undemocratic and the trading markets were anything but free. It might have been clearer if I said that there was never been a famine in a country with free markets and representative democracy, something I consider a pre-requisite for a liberal economy.
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