Kieran O'Donnell (Limerick City, Fine Gael) | Oireachtas source

The Senator can make the introductions.

I am worried about the bubble in house prices. How does one combine house price inflation of 10% with an unemployment rate of 11%? We should think in terms of rules, as we have mentioned to the Governor during his appearances, whereby no loan should be in excess of 80% of the house price and a limit of two and a half times income should be applied. As long as house price appreciation remains a tax free form of income with huge leverage, particularly when deposits are low, people will keep buying and selling. There should be a health warning in property supplements in newspapers, which are increasing to between 30 and 40 pages, as we seem to be set to do the same all over again.

Dr. Ronan Lyons pointed out our construction costs are still in excess of those in Germany. The industry, therefore, has not adjusted to eight years of recession. We still have excessive construction costs. Is the industry full of restrictive practices? I recall the rumpus when GAMA built roads in Ireland cheaper than domestic construction firms. It was demanded that the company build them just as expensively as the domestic construction industry. If we are going to use construction as the main instrument to change economics in Ireland, we should get a better industry than we have. Anything the council can find for us in the context of international competitiveness before another booms starts would be appreciated.

Have we wasted a good recession? We still do not use cost benefit analysis. When Professor Barrett was editor of the quarterly economic commentary, we used to always say, "Don't just throw out the cash. Would you please check back and see has it had any impact at all?".

I refer to the restructuring issues mentioned by Deputy Boyd Barrett. If people are rewarded as heavily as we do for entering sheltered sector occupations, there will be a shortage of people interested in investment and, therefore, there will be a reliance on foreign multinationals to develop the economy. We pretend to be interested in tourism but during the boom people from eastern Europe ran the industry. We were not interested. We pretend to be interested in fishing but if a boat goes down, the bulk of the crew tends not to be from Ireland. Are we going to be serious about entrepreneurship or rent seeking, subsidy seeking, sheltered sector employment? We have rich doctors and lawyers.

Deputy Doherty and I attended a banking inquiry committee meeting earlier. Some of the numbers we heard regarding legal advice would absorb all the funding. We are, therefore, not changing the structure of the economy to respond the world Professor McHale is describing. The view that we got back our sovereignty and the troika is gone is bizarre. We are still borrowing. Have we learned enough lessons from how we got into trouble, particularly in the context of property and other sheltered sector activities?

If the health sector continues to be immune from budget constraints, what impact will that have? The Leader of the Seanad was given figures that he put in the Library regarding the high cost of health insurance. We have treatments for which patients are kept in hospital for 11.6 days when the international average is 3.7 days. That adds €10,000 in bed and breakfast cost by keeping every patient in hospital longer because that is what doctors and hospitals are paid for. That has not been reformed, which means we do not want a competitive health insurance market. I am worried after three years in the Seanad that apart from the blaming the fiscal council for the €2 billion adjustment, the Government has done nothing to make the economy respond to the world. The State cannot keep borrowing, although at reduced rates, with the voracious appetite it had previously because we will end up with massively indebted households because of a property bubble and a massively indebted State. To redress that, I have always felt the fiscal council should have a wider mandate than to be a caste of economic advisors. If the people doing the economic forecasts are so good, let us give them a few quid to go to Leopardstown and see how they fare picking winners.