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Home Building Finance Ireland

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So €750 million is to be used to grant "soft" loans to builders who can't or won't get such loans from banks ("Details on HBFI agency are as sparse as houses", Cantillon, October 12th).

Whilst this is being done to help accelerate the building of about 6,000 homes, about 5,400 (90 per cent)  of them will be sold at  full market prices and won't be either social or affordable.

Why is taxpayers' money being used for this purpose when the real logjam in the housing crisis is at the social/affordable end which the State is best positioned to prioritise and address directly?

Furthermore, given that the source of funds is the Ireland Strategic Investment Fund why are the funds being advanced as straight bank loans and exclude either equity or participating preference shares to take account of risk and reward?

Letter published in the Irish Times on 14th October 2017.

Government's "Rainy Day" Fund

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In addition to allocating €750 million from the Ireland Strategic Investment Fund to help fund builders, the Minister for Finance has signalled that at least €1.5 billion will be transferred to a 'rainy day' fund next year.

Does he not realise that the 'rainy day' has already arrived in the form of major housing, health and transport investment crises?

Letter published in the Irish Times on 12th October 2017.

Who are the "squeezed middle"?

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In view of current interest in the "squeezed middle" ahead of  the 2018 budget, it has been enlightening to identify this group using taxable income statistics generated by Revenue and published by the CSO.

Based on 2015 data, there were 2.3 million tax cases including jointly assessed married couples and civil partners. They had an average taxable income of €36,800  per annum before deducting normal tax credits.

Because some very high incomes shewed this average, a much lower income of €25,700 corresponded to the true middle where half of all tax cases earned less than this value and half earned more.

Going deeper, if tax cases are divided into three equal ranges, corresponding to lower, middle and higher incomes, the middle range in 2015 was €15,600 to €36,000 per annum. Alternatively, if the cases are divided into five equal ranges each comprising 20 percent of cases, the middle range narrowed to between €20,000 and €31,200 per annum.

This analysis suggests that, even allowing for wage inflation since end 2015, most  middle-income tax cases are well below the current €33,800 threshold for the higher 40 percent tax rate.

On this basis a budget increase in this threshold wouldn't benefit most middle-income cases unless the definition of "squeezed middle" is interpreted to also include upper-middle cases with annual incomes ranging from €31,200 up to €52,500.

Letter published in the Irish Times on 7th October 2017.

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