Do we have a major tax evasion scandal waiting to fall out of the closet? Where did the £5,000 million come from that went to buy houses and apartments last year without the need for a mortgage? To identify the phalanx of speculative investors as "cash-rich individuals" and to leave it there is to wilfully ignore a potentially massive tax fraud.
Perhaps the Government feels it doesn't need the income - or the political repercussions that would follow a harsh crackdown on the sector. After all, Charlie McCreevy already has more money flooding into the Exchequer than he can handle. And an investigation by the Revenue Commissioners could cause a slump in property prices if anxious investors scrambled to find safer havens for their hot money.
Anecdotal evidence of massive tax fraud and a thriving black economy has been available ever since the Celtic Tiger began to roar. Practically every new housing estate on the fringes of Dublin contains clutches of homes that were bought by electricians, carpenters, plumbers and other highly paid tradesmen. And it doesn't take a genius to figure out that a fair bit of that money didn't come from after-tax income.
It would come as no surprise to learn that some of the billions of pounds sent offshore to escape DIRT in the 1980s and 1990s has been re-employed. Of course many of the investments could be perfectly legitimate and the individuals concerned may be fully compliant taxpayers. But when £5,000 million of the £11,000 million spent annually on housing comes from ready cash, questions have to be asked.
As in the 1980s, however, there seems to be no appetite to investigate or to antagonise non-PAYE investors. Politicians, civil servants and State agencies are again sleepwalking past a potential scandal. Remember how shocked everyone in authority pretended to be when hard evidence of organised DIRT evasion, through offshore accounts, was finally produced by John Purcell, the Comptroller and Auditor General?
Those with money rushed to put their wealth offshore, with the connivance of financial institutions, as the finances of this State went down the tubes. When caught, the banks didn't even come out with their hands up. Instead, they pleaded business pressures and a sweetheart deal with the Revenue Commissioners. Various ministers for finance and their officials knew nothing. The Revenue denied collusion. And the Central Bank was - as usual - outside the loop.
The owners of wealth are the most powerful lobby in society, even if the pressures they apply take divergent forms at different times. It is a power that governments challenge at their peril. The political equation is simple: money talks.
In spite of that - driven by the growing anger of young, wannabe homeowners - the Coalition Government has nibbled at the issue of hot money in housing. Last Thursday, on foot of the Bacon report, Charlie McCreevy and Noel Dempsey spoke about shaking the speculative investor out of the lower end of the market. This is to be done through the imposition of a 9 per cent stamp duty on the purchase of a second home or apartment, along with a 2 per cent property tax for at least three years.
The formal involvement of the Revenue Commissioners in the process, through the collection of the 9 per cent stamp duty, will be enough to frighten off some speculators. And the exemption offered to long-term landlords from the 2 per cent property tax will be balanced by a requirement that they no longer operate within the black economy.
It is a clever initiative. But its extremely limited nature has already drawn criticism. Rather than pursue all multiple-home owners and the huge investments that would involve, the Government has decided to start this week and give due notice to those likely to be affected. There is to be no retrospective action.
The Revenue Commissioners, already strapped for resources and personnel, are probably relieved. Having effectively ignored the property sector as a possible tax-free haven for the last number of years, it will take the organisation time to gear up.
As things stand, according to disgruntled tax officials, a total of six inspectors have responsibility for ensuring tax is paid on the entire residential rental income of Dublin. Some years ago, the Revenue Commissioners discontinued the practice of asking property buyers where they got the money for the purchase.
Throwing shapes is something this Government seems to enjoy. This is the third occasion it has called in Peter Bacon to advise on housing matters. You'd feel sorry for him. His initial terms of reference practically guaranteed failure: they were akin to telling a fireman that a blaze should not be put out, only controlled. His advice was not to cause a fall in property values. And it didn't. Builders and developers continued to make enormous profits.
Last Thursday, on foot of his latest recommendations, Mr Bacon estimated that house prices will double again by 2005, rising by 23 per cent this year and 21 per cent next year. Given that Bertie Ahern, the Irish Congress of Trade Unions and IBEC have all identified rising house prices as a serious threat to the economy and the future of the Programme for Prosperity and Fairness, it's not the kind of progress that is required.
As inflation hit 5.2 per cent during the week, Ministers behaved like ducks in thunder. Charlie McCreevy and a few of his colleagues railed against the drinks trade for their profiteering activities. They threatened publicans with maximum prices orders or the issuing of new pub licences if they didn't behave. And Mr McCreevy deflected responsibility in the matter towards the Progressive Democrats when he said the route to increased competition lay through Mary Harney's department.
John O'Donoghue must have been pleased. The Minister for Justice has had an Intoxicating Liquor Bill, designed to reform the licensed trade, before the Dail for the last six months. But it concentrates on opening hours instead of increasing competition. There is no provision in it for granting extra pub licences. So much for the competition route.
The Government was treating publicans with the same kid gloves it uses when handling taxi-drivers. Ireland might have the highest effective drink prices in Europe and Dubliners might endure the worst taxi service of any capital city in the developed world, but powerful lobbies had to be heeded.
In that context, it came as no surprise when the Government again dithered on the housing issue. Cutting stamp duties for first-time home-buyers might be popular with young couples. But experience has shown that Government grants and tax breaks quickly find their way into builders' pockets as prices rise. A more substantial proposal, for the creation of special development zones where planning would be fast-tracked, was accepted by the Government. But, given its failure to designate major industrial growth centres at the outset of our seven-year National Development Plan, major delays can be expected.
While we are waiting, the Government could occupy itself profitably by asking the Revenue Commissioners to examine the level of tax compliance that exists within the multiple-home ownership sector of our society. It might, as a by-product, free up a lot of accommodation.