Scrapping measures aimed at slowing down the housing market which were introduced after the third Bacon report would damage the western economy rather than help it, according to a leading economist with the ESRI.
Prof John Fitzgerald was responding to a campaign by a group calling itself the Association to Protect Housing in the Border, Midlands and Western Region, which is led by auctioneers, solicitors and developers.
TDs and councillors throughout the region have been lobbied in the run-up to the Budget to have the increased taxes on second homes abolished. Large adverts have been placed in national newspapers and a number of public meetings have been held.
At a meeting of Sligo County Council this week a motion calling on the Minister for Finance to abolish the stamp-duty measures was passed with the support of Fianna Fail and Fine Gael, with only Cllr Declan Bree of Labour and his party colleague arguing against it.
Prof Fitzgerald does not accept the group's argument that the Bacon Three measures penalise the west unnecessarily when they were designed to tackle the eastern region's problem of escalating house prices.
"It is precisely because I am in favour of western development that I believe this measure is good, and in fact I would say that it doesn't go far enough," Prof Fitzgerald said.
He said 20 per cent of dwellings in the State were second homes or were for rental to people for whom they would not be their main residence. At a time when the building industry was stretched to capacity, using resources to build second homes did not make sense.
"When we are being put to the pin of our collar to house our children, giving people encouragement to build second homes doesn't seem to be very wise," he said.
Prof Fitzgerald said house prices in rural areas of Ireland were very high when compared with similar regions in England or France. He said to encourage more development in the regions it would help if the differential in house prices between these areas and Dublin was greater, as more people would then be willing to relocate.
He said the increase in stamp duty to 9 per cent and the 2 per cent anti-speculation tax were having only a very moderate impact. For the western economy the most important thing was that local people were able to access affordable housing.
"This may not be in the interests of people who wish to own two or more properties, but it is in the interests of local people," he said.
It was a question of whether the western region was seen as a place where people should live and work and have a reasonable lifestyle or as a "playground" where people from other areas came to enjoy themselves.
Holiday homes, lying idle for most of the year, were only an extra burden on the local economy. People with homes in the country were not charged the full price of services such as water, electricity, phone lines and sewerage, and this was right for full-time residents, but holiday-home owners shouldn't be subsidised, he said.
Cllr Declan Bree said measures to dampen the housing market were badly needed. Between Sligo Corporation and County Council there are about 1,000 households on waiting lists for housing.
"Many of these are people who until three years ago would have been able to afford their own homes, such as health board workers and members of the Defence Forces. And there is no light at the end of the tunnel for them, because unlike before you can't tell them they will get a house within a year or two," Cllr Bree said.
There was no evidence that prices were falling in Sligo and builders were working flat out, so warnings that people would be laid off were scare tactics.
The Association to Protect Housing in the BMW region argues that there are "plenty of affordable homes in our market for the first-time buyer". However, the average three-bed semi-detached house in Sligo town costs more than £100,000. Houses in sought-after areas in the town generally cost more than £150,000. In Ballymote, in the south of the county, new semi-detached houses recently went on the market for £90,000.
While these prices may seem low compared to Dublin, average wage rates are much lower in less-developed western regions, and the occupation mix is very different with many fewer high-earning professionals.