As the minister faces the budget on Wednesday, Stamp Duty receipts are down €730m on original estimates and the housing sector is in a full blown crash, but Mr Cowen is not expected to introduce any stamp duty reform.
Robert Ganly, president of the Irish Auctioneers and Valuers’ Institute (IAVI) has blasted the lack of movement by Mr Cowen in relation to stamp duty as the market collapsed this year, which has resulted in millions lost in revenue and hundreds of job losses.
He said: “Last year they took in almost €4bn in stamp duties. This year they will take a billion less, and it’s their own fault. We have a real problem now. We need to inject some life into the market, and the Tanaiste has an opportunity to do that on Wednesday.”
Describing stamp duty as a “tax on hope”, Mr Ganly called on Mr Cowen to initiate an immediate review on stamp duty and other major areas of concern relating to the property sector, get the report quickly, and then act on those recommendations as soon as he can. He said Mr Cowen has dug himself into a “rhetorical” hole that he refuses to come out of, and that it is hurting the economy.
Furniture shops, electrical retail stores, menswear and DIY outlets will bear the full brunt of the economic slowdown next year with the growth in retail sales set to halve in 2008.
Economists expect retail sales growth to slow to between 3 and 4 per cent next year, compared to 7 per cent for the first nine months of this year.
“People are getting more cautious so spending won’t be as great as previous years,” said Alan McQuaid, chief economist at Bloxham Stockbrokers.
“Retailers may get through the Christmas season and January sales relatively unscathed. But after that, you’d be worried.”
Austin Hughes, chief economist with IIB Bank said the oversupply of retail outlets will put more pressure on retailers to slash their prices.
“It will be a buyer’s market,” said Hughes. “Retailers reliant on a buoyant housing market will suffer. So too will electronic products and big ticket items like cars.”