TLDR: The government is transferring all state land and property to a private entity called the Land Development Agency. We cannot allow this to happen. The Post Offices are semi-state owned but they are actually being starved of cash.
Land Development Agency (LDA)
“As stewards of public assets, public money and an important housing and development mandate, the LDA places the upmost importance on transparency. The LDA is subject to the full provisions of Freedom of Information requirements.” – About page
Anne Kavanagh Announcement: (key points)
- LDA are a private company, their activities are not subject to Dáil scrutiny.
- The only opposition that exists is the “people before profit” group who are trying to alert people to what’s happening.
- Normally people go through a post master to receive welfare or pension.
- People are now receiving it directly into their bank account.
- The Post Offices are being starved of that government revenue.
- The government entered into a private arrangement with Bank of Ireland this week.
- Going forward post offices will be selling bank products.
- So what you see at the moment are banks closing down all of their branches.
- The post masters have been kept out of the loop.
- It is estimated the private deal between the government and the banks will amount to €1000+ revenue per post master per annum.
[3:00] Finbar Markey: Before going into the finer details of what this bill entails, I want to try and characterise this. It is the giveaway of the material existence of the state that is the Republic of Ireland. In the entire history of the state, nothing so shocking has ever been presented before Dáil Éireann. This Bill in itself is actually quite a small bit of legislation. It lists everything that comprises the material existence of the state to be given away for the profit of private developers.
This has been done under two guises. The 1st is the homeless and housing crisis. All of ideas around this repeat themselves over “building more housing” and integrating social classes. The ultimate goal is to privatise the entire state. So the state of Ireland as a material entity will not exist anymore.
Secondly it is being done under the guise of Covid and regulations. But bills like this are barely known by the public.
Richard Boyd Barret has flagged this and spoken out about this in the Dáil.
“Just wow is all I can say… of course the minister has already left the building. The boys are back in town. Fianna Fáil and the developers. This is a hyper-speed version of “The Mistakes of the Past”. This legislation is a heist, is a legal method to pillage the land bank, the entire public land bank. It’s absolutely extraordinary. It’s not just local authorities, it’s every single public sector and their land. Not just housing land, “any relevant land” you can look at the definition in the legislation. They can take any bit of land from any public body and they can do what they like with it. “
Land And Local Authority
[7:37] Finbar Markey: When we think of land, we are thinking of local authority council land, but it goes much further than that. The first part of the bill defines what public lands and public bodies are.
And the agency that is being created, which is a commercial agency, a private company composed of shareholders. This private agency has defined that any lands, buildings or property belonging to any of these listed Public Bodies are open to just be “taken” essentially. I use the word “taken” and not “sold”.
- Central Bank
- Bord Na Mona
- Central Statistics Office
- An Garda Síochána
- Cork City Council
- Cork County Council
- Cork Education and Training Board
- Cork Institute of Technology
- Departments of Agriculture, Food and the Marine, Arts, Heritage and the Gaeltacht, Children and Youth Affairs, Communications, Energy and Natural Resources, Defence, Education and Skills, Finance, Foreign Affairs and Trade, Health, Jobs, Enterprise and Innovation, Justice and Equality, Public Expenditure & Reform, Social Protection, Environment, Community and Local Government, Taoiseach, Transport, Tourism and Sport
- Digital Hub Development Agency
- Dublin City Council
- Dublin City University
- Dublin Dental Hospital Board
- Dublin Docklands Development Authority
- Dublin Institute for Advanced Studies
- Dublin Institute of Technology
- Health and Safety Authority
- Health and Social Care Professionals Council
- Health Information and Quality Authority
- Health Research Board
- Health Service Executive
- Health Service Executive Primary Care
- Higher Education Authority
- Houses of the Oireachtas
- Housing and Sustainable Communities Agency
- Housing Finance Agency
- Human Rights Commission
To name just a few of the 300+ public bodies that will be taken by private entities.
Anne Kavanagh: “Bord Na Mona owns one of the largest land banks of the country. Are you telling me this land becomes under the remit of this new agency?“
Finbar Markey: While although I’m saying Bord Na Mona land can now be considered designated to be used for another purpose. The Land Development Agency has such a broad and loose remit that it can undo anything. The agency itself has been in existence for two years, but the power that has been bestowed onto this agency through this bill is what’s really shocking.
In terms of what this agency is, it’s a Designated Activity Company (DAC) which consists of share holders. It’s a private company that can enter into commercial activities with third parties. One of the concerns of this is that it makes them less accountable to the state because it would be able to designate certain aspects of commercial business as not open to Freedom of Information Acts.
What we will find is that the DAC registration that the ministers conducted is aimed to shut down any forms of investigation into what this agency is actually doing.
Right To Purchase Land
[14:00] Finbar Markey: The agency discusses in the Bill the right to purchase land, but in this context it is only talking about private land. But when it is talking about public land it uses the word “acquire” . One example of the wording is “The agency shall be entitled to receive” but it doesn’t mention any other local authority, just the agency.
This is sneaky language because all of the money for these lands will go to the developers at a profit. So in terms of how sneaky the Bill is, there is a big distinction between when it is talking about buying private land (which this agency will have a right to do as well) but it will “acquire” public lands.
The list goes on. Anything considered to be a public body. All is being handed over to private entities. All authority and control goes over to this new agency.
The bill seems to again redefine our understanding of what constitutes affordable housing. In 2011 Fine Gael redefined the meaning of social housing to mean private housing being leased by local authorities. It used to be that local authorities owned public housing and they built public housing. And the people who were working class and middle class aspired to access public housing. It wasn’t a shameful thing that our government makes it out to be.
This introduction in 2011 allowed local authorities to save all these 2nd and 3rd home landlords by helping maintain these high rents that the landlords were demanding.
But now this bill goes one step further. It once more redefines social housing to mean any housing that is below the local market level value. Now this means it’s unaffordable to nearly everybody because everyone maintains the market value or probably in fact increases the market value. So only a small proportion of the houses that are going to be developed by the LDA will actually be for affordable housing. 40% are labelled as social housing, but only 10% will be genuine social housing. And another point to note is that the percentage of available affordable housing is determined by the minister at any given time.
And in terms of affordability…this bill will only further drive housing costs.
Simple Or Convaluted
Finbar Markey: Instead of having a simple system where we gathered all our local authorities together. we could have been out of this housing crisis 10 years ago. But we are instead going to end up in this convoluted mess of hundreds of third party developers, insurers etc.
You must remember that 2 years ago this bill was introduced by Fine Gael and it fell on its face. But now Fianna Fáil who criticised it then, have now given it a new name and are running with the thing unchanged. That just goes to highlight how tackless and insincere the government are about trying to tackle this housing crisis.
The Affordable Housing Bill is introducing what is called Shared Equity Loans. This was done in the UK over the last 10-15 years, it was an absolute mess, it drove up the cost of housing, it created ghettos. So our government rather than learn from the UK housing crisis it is instead doing the exact same thing through this Affordable Housing Bill.
Margaret Thatcher would have been ashamed to introduce this bill as it is so extreme. Fianna Fáil are proving themselves to be the most extremist far right wing economists that one can possibly be. I don’t think any other state would get this through their houses of government as it is so extreme.
Plantation 21st Century Style
Finbar Markey: Quite often it is exaggerated when we hear references to the end of the common age or the end of plantations but I would say in this context it is safe to say it is a fair comparison in terms of understanding the significance of what this bill does.
Because it is undoable. When you go into a court case when land has been sold onto a third party, you may have your disputes but the person that bought the land from the other person who is disputing the land, generally in legal terms that new land owner doesn’t have to suffer there would be a compensation that would be paid out.
************** 2nd Guest *********************************************************
Tom O’Callaghan – Chair Independent Post Masters Group
So basically in 2012 a document was formed by gran thronton. It came to the conclusion that if government contracts were reduced from 60 million euro, that our existing post office network would be in serious trouble.
So to give you some context, it is now 9 years later, that contract has come down to 51 million. So the government has effectively allowed the government contract business to reduce.
So what happened next was that the viability of the network comes into question. So another report was completed and from that a contract was produced. The idea of the contract in 2018 was that the post masters who signed the new contract were going to ensure the security of their businesses going forward.
Now Let’s be clear, there are about 900 post masters in Ireland. 603 Post masters signed the contract. Now how a post office gets paid is very simple. They only get paid per transaction, so the more transaction you do, the more you get paid.
S52 Old Contract
The Post Office is older than the state. The old contract that the post office used to be under was called the S52. It was a very similar transaction based system but the difference was that the smaller rural post offices got paid more per transaction than the larger retail office. That system helped maintain the network when it was over 1000 post masters.
What did the new contract do? It eliminated that old contract. It was sold on the pretence that it would secure their future going forward.
So what has happened? Government contracts have failed now again because we are now going into what is commonly known as the “cashless society”.
So my question is very clear. If it’s a case that we require a minimum 60 million in government contracts, and overall we would need a 70 million total to support the network sustainably. I would have thought the first thing you would try to do would be to ring-fence the monies required to ensure a sustainable Post Office network.
When we did our own research we found that banking in conjunction with government was the way going forward. This was achieved in New Zealand. At that time in New Zealand there was a political impasse and their post office was under threat. So what they decided to do was to create their own banking structure. They intended for the profits generated from this banking structure to be returned to their communities.
So what happened during this time? Interest rates were more competitive for the general public. They gained 400,000 new customers in the first 3-4 years of business. Now keep in mind they have a similar population to Ireland.
Last year their customer base was above 986,000. They turned over a net profit of over 100 million. So the difference is very clear, the profits going back to the communities and not to stakeholders.
The problem that I see is that we as post masters received notification out of the blue (no different to the public) that this new deal was being made with Bank of Ireland.
What makes us uncomfortable as post masters is that we cannot tell you right now how much a post master is going to get paid for doing that work. Is it going to generate enough revenue to sustain the network going forward? The problem is that no one has that answer for us.
What we the post masters received as notification was in a memo that was sent to us on the day the deal was done. It was a strict Non-Disclosure Agreement between both the Bank of Ireland and An Post, this was stipulated by the bank.
So in other words the pillar bank is controlling our network of post office. The Post Master who is self employed and is dependent on new businesses to be sustainable has no say, no input and no idea.
The Problem Is This
This is something I want to highlight and make clear to all. In 2018 when Post Masters signed up to new contracts under the belief that they would have a new sustainable model. It is now turning into a situation where in June of 2021, the subsidies that the Post Masters were getting to maintain their business, which was part of the contract for 3 years is now up.
Post Masters are now looking at a drop in income of anywhere between 30-50%. So we now have a network that is falling apart.
[29:00] Anne Kavanagh: Okay you’ve just given us a lot of information there. So if I can just summarise it and please correct me if I’m wrong.
So my first question, is the post office network state owned?
Tom O’ Callaghan: No it’s a semi-state owned network.
Anne Kavanagh: Okay, so each of the post offices is run by a post master who is self employed. The revenue generated by each of those post offices under that post master is dependent on the number of transactions. In order to keep up that revenue stream you had been largely dependent on state contracts in order to keep up that revenue. So everyone from the old pensioner collecting on a Friday to the mother collecting Children’s Allowance, all of this generated a stream for the post masters, but now with the cashless society people are paid directly into their bank account. So that has more or less eliminated that revenue stream for the post masters. Am I right so far?
Tom O’ Callaghan: That is correct Anna yes.
Anne Kavanagh: Okay so now we have the situation where banks are closing their branches left right and centre all across the country. The Post Masters have been kept out of the loop from the deal that the government has entered into a secretly. The Post Masters don’t know what that deal is, whereby they will be come front of house agents for the banks.
So we’ll take for example the Bank of Ireland branch in Longford. So what will actually happen now is that the services provided by Bank of Ireland will now be available through the post office. But the Post Master in that area won’t know exactly how much he is going to be getting for carrying out that agency’s work for the bank.
[31:29] Tom O’ Callaghan: That is correct Anna. So what has been said and leaked in the media is that we are now looking at the contract being worth maybe about 2.5 million to 890 post offices. So if you were to equate that to monetary value you could possibly be saying that it is between 1000-2000 euro per annum. For doing all that work per post office.
To me that doesn’t seem like a good viable plan for a Post Master’s business going forward and that to me is a huge concern.
[32:05] Anne Kavanagh: So really in simple terms what we have is the transfer of the post office system over to the banks to be used as their servants to generate profits for the banks. And this also puts those working at the post office into a form of bonded servitude. The spotlight is on the hidden giveaway of state assets. This really is the classic example of our post offices being handed over to be used and abused by the banking sector.
Ignoring The Proven Model
Tom O’ Callaghan: What is disappointing Anna is that there is a proven model that community banking does work. What it also does is enable the network to do other financial business where needed, whether that be online or at counter service.
We all have to ask this question, why aren’t all the post offices like all the largest Argos retail stores in the country? Why don’t we do local transactions and deals with local distributors. For example electrical goods, and have it delivered with to or from your post office. It’s because of this fleece.
But the problem I want to come back to is that the government is aware of this. In 2016 I was personally the author of a motion that was brought to the Dáil and unanimously passed by the TD’s including our ministers Eamon Ryan, Michael McGrath and Pascal O’Donoghue.
So this begs the question, here is this thing coming, the problem is here, where we are looking at potentially 600 offices being not viable. The solution being proposed is a PSO, a public service obligation.
With the answer being, if we could create a model that the communities would benefit from. And also bear in mind that even if we were to achieve a 20% market share in conjunction with credit unions for example, that would be huge. Yet it would create a viable network. This model would still allow the banks to have their 80% share but it would at least give the public the option of where to do their business.
I think it’s important to highlight that the technology within the network is quite advanced. You do a transaction in the GPO, you can do that very same transaction down Kerry. This is technology that I believe very strongly about.
A typical example would be remote working, where we can all meet but yet in different locations if want to have that ability in Ireland to have an equal quality of life, we need an infrastructure. Part of that is this, the post office allows you have to have that local supermarket, coffee shop or local butcher. And we’ve had that up until now.
Now this is not a fault of the Post Masters, perhaps management at An Post should’ve been asking how to we sustain the existing infrastructure of the post offices that survived the financial crisis in 2008. At that time people came to the Post Master and asked “would my money be safe within the post office?” and the savings went from over 14 billion at the time to over 18 billion. That figure currently is over 23 billion. A recent report concluded that if a people’s bank were to be setup, it would cost around 200 million. If we include the billions from the credit union and asked the public, would you like to contribute to something that would be of benefit to you and your community? I don’t think we would have had any trouble in getting this setup.