Dara Calleary (Mayo, Fianna Fail) | Oireachtas source

I thank both witnesses. Dr. McDonnell said something in the early stage of his presentation about one of the bigger issues facing the economy, namely, the notion of interest rate increases. In his engagement with Deputy Lahart, Dr. McDonnell spoke about families being under pressure and on the verge of poverty. Deputy Lahart set out the experience we have all had. How significant would a 1% increase in interest rates next year be on the figures Dr. McDonnell quoted for families at risk of poverty and on our general consumption trends and patterns?

I agree absolutely on child care. A child can be four and a half or five when he or she moves to primary school but the education system and the way we value education is entirely different. We need to do a great deal more. If we implement a system of full payment and justify payment for child care workers in recognition of their degrees, will Mr. Berney's ICTU not then lob in a relativity claim for national school teachers to keep them separate? We will then end up in this spiral we always do where we are watching over our shoulders. I do not mean that in a smart aleck way, but when one looks at costings, one must look at all the knock-on effects.

On a similar note, Mr. Berney spoke about the public service pay agreement. We have major difficulties at the moment in our health service in nursing, physiotherapy and speech and language therapy because we cannot fill vacancies. The nature of our agreements are that everyone gets the same increase and we do not have the flexibility required at local management level to redesign contracts. It is not even the pay element of contracts, it is also career breaks and so on. There are entire nursing classes going to the UK after getting a degree here because our system does not allow career breaks or recognition of past work.

Is there not a point to be made in this regard? Yes, there is the old-style agreement. However, we need greater flexibility to respond to challenges. Health care is the obvious one at present. There is so much pressure.

On the VAT issue, Deputy Pearse Doherty is correct. We have been forced to spend weekends in Dublin recently and the gouging of Dublin hotel prices that is going on is a disgrace. There has been a drop of 140,000 in the number of UK visitors. The west coast tourism market in particular depends on UK visitors. The fall in numbers cannot just be dismissed as a matter of having to watch sterling or other currencies. It is a very real figure. Many areas depend on that market. Even if it is not profit-taking, it is the market that keeps businesses and employment going. That is the argument on the VAT issue. Perhaps we need to separate it out between accommodation and food, as Deputy Pearse Doherty suggested. There may be time to have a discussion about regionalising tax rates on consumption. Dr. McDonnell pointed out that consumption taxes here are actually incredibly high. Perhaps we should stop looking at the entire island and start looking at regions that need a particular boost. This ties in with the discussion we were having yesterday about the sustainability of regional economies.

ICTU wants a housing emergency declared. We all know what we are dealing with on a daily basis. If we declare a housing emergency in the morning, what will that actually mean? The difficulty is that we need to build houses. What are we going to do in the 18 or so months it will take to build any number of houses to get people off our streets?