Participating in this weekend’s First Thought Talks, as part of the Galway International Arts Festival, the new Land Development Agency chief, John Moran, will share a platform with UCD's Orla Hegarty, to discuss ‘Obstacles to Decent Housing’ - one of the most important issues for Ireland today.
Moran is perhaps best known for his role as secretary general at the Department of Finance during the bailout and re-establishing the road to a post-crisis recovery. He is a trained lawyer and banker, studied financial mathematics and French, as a banking supervisor at the Central Bank, and at 21 became one of the youngest persons to be called to the Bar of the State of New York.
Previously, he has held various roles such as board member of the European Investment Bank, commission member of the Central Bank, aviation lawyer at GPA Group plc, and CEO of Zurich Capital Markets. Ahead of his Galway visit, Moran spoke with me about working in both the public and private sectors and his vision for the Land Development Agency.
I began by asking Moran about his decision to move into the public sector with the Department of Finance at the time of the crash. He admits civic-mindedness was a factor.
“I have often described the public sector as an Irish version of national service,” he notes with some amusement. “At the time the country was in a very difficult place and I was lucky enough to have a range of skills relating to finance, banking, and legal and I felt I should help the country that had given me a great education. There were plenty of others who also put their shoulder to the wheel. It concerns me that we can think in terms of a ‘them and us’ and ‘public sector v private sector’.
'One of the reasons we have a lot of debt is that during the recession we continued to pay out a lot in social welfare, not reduce salaries as dramatically as we could have done'
"You see lots of people in Ireland volunteering to do stuff that you could say belongs to Government, whether that be helping a local sports team or an elderly centre. I think it is a great thing for everybody to spend some time working in the public sector. In the Department of Finance you realise the scale of the decisions that you make in terms of the impact that they have on so many people. It is way more than in the private sector, so it is a lot more rewarding place to work. On the flip side you do have more public scrutiny and, sometimes, criticism but if you are doing a good job, and believe in what you are doing, you should be prepared to stand up and defend what you have done.”
Moran expands on the varying attitudes that he found in the public and private sectors. “They are more similar than you might think. People think they are different worlds yet they are not. On reflection, we can be hyper critical of things that happen in the public sector and the result of that encourages more risk aversion than you would get in the private sector. If you are in the private sector, and want to move a company forward, you’ll try things and some will work and some won’t, but as long as the mistakes are not massive it’s OK, and if you are not trying stuff and failing a little you won’t succeed.
"When we were kids learning to ride a bicycle, we would never have learned without falling off a couple of times. The private sector is conducive to that; there is a mindset that you can try things out but the media and the public tend to pounce on people working in the public sector for a single mistake, and that can instil the fear of making a mistake rather than letting people admit a mistake and learn from it. That is one of the important things in Ireland moving forward, how do we find the solution to that, we can’t just copy ideas from elsewhere, we have to do our own innovations and find things that work for Ireland.”
'Galway as a regional city is struggling with the growth it has had in recent years'
While the country is on the road to recovery following the crash, we still have an eye-watering €200 billion of national debt hanging over our heads. Moran offers his view on this fiscal sword of Damocles.
“Ireland is an exposed economy and when the world gets a cold we get influenza. When the world is doing well we tend to do disproportionately well because we are heavily leveraged on the success or failure of the outside world," he says. "If you are in that framework you can’t allow yourself to have too many weak points. The problem with the Irish debt is that a large portion of the ability to pay it back rests on the continuing presence of multinationals and the international economy in Ireland, and they might disappear if the rest of the world had a recessionary shock.
"We have to continue to drive down that 200 billion of debt. At the moment our interest rates are close to one per cent so we pay two billion every year of our income; if interest rates were to rise to five per cent we’d be paying eight billion of our income which is a massive amount so that is a risk. Most of our debt was lent to us by non Irish lenders and therefore we have to be very conscious that they believe Ireland is well run and the rates are kept as low as possible.
"One of the reasons we have a lot of debt is that during the recession we continued to pay out a lot in social welfare, not reduce salaries as dramatically as we could have done, in order to match them to collapsed tax revenues. So the only a small amount of our debt is from the bank bailout, most of it is from us continuing to run a deficit to ease the shock to the system to Ireland.”
Clearly not a man to shirk a challenge, Moran has now taken up the reins at the Land Development Agency which will have a big role to play in addressing our housing crisis; “The LDA is designed to deal with a number of different issues,” he explains. “The first is that historically in Ireland, we have tended not to manage all the land owned by the State in a holistic way; hospitals tend to own the land they have, CIE own the land they use etc.
"The LDA’s job is to pull the land together to use it more efficiently. It will also, in time, build up new land banks because, as we use the ones we already have, the State should be moving ahead of development in the country as regards acquiring land. The LDA is not a short term delivery mechanism for housing , it is a medium to long term project for planning and land use is that we should see better and more compact development in our cities and towns.”
'We can’t see into the future but it is helpful to imagine how it might look like as you plan'
Moran expands on the time frame envisaged for the LDA’s work. “We have got to come up with some short term deliverable results and we will be doing that with some of the sites. To take Galway as an example of a regional city, it is already struggling with the growth it has had in recent years. So decisions need to be made to allow Galway to continue to grow without congestion or commuting times getting worse. One of the short term things we will be pushing with the local council, and also bringing in experts in urban planning and regional planning, is to help the development plan for Galway to move forward in the next 10 years, 20 years and beyond.
"One of the things that all too often happens in Ireland is we get development plans for five years and electoral cycles of five to seven years, and nobody is thinking about how things will look in 50 years time or a 100 years. We can’t see into the future but it is helpful to imagine how it might look like as you plan. A lot of what we will be doing now is helping to create a vision of what our future looks like beyond 2040 or up to 2070 and then work toward that.”
‘Obstacles to Decent Housing in Ireland’ takes place this Saturday [July 27] at 2pm in NUI Galway’s Aula Maxima. Professor Niamh Hourigan will moderate. Tickets are €10 from www.giaf.ie