Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I recognise as a significant problem that we have to get families out of bed-and-breakfast accommodation and we have to get to a point where we are delivering affordable homes for people and building more homes. At the same time, as the Deputy said, we are already experiencing the so-called capacity constraints in some parts of our economy. That is code for not being able to get people to do the work in sufficient numbers or not being able to reach agreement on the price at which a project should go ahead. It is a concern regarding how we manage this in future.

We need more homes in particular and we have to find a balance for delivering more homes without, at the same time, kicking off an inflationary trend within the economy because of two things. The first would be if houses were at a price that kicks off the spiral to which the Deputy referred. The second would arise if, in our efforts to build more homes, we find out that we do not have the people available to do it. That, in turn, creates another inflationary spiral within the economy.

How are we going to manage it? There are two ways. I am outlining the difficulties Deputy Boyd Barrett has touched on. This is why the rules of the Central Bank on macro-prudential lending overall are really important. What is different for our economy now is that we do not have the same levels of credit within the economy as we did the last time. That is one important point of difference. Even if we were to see a change in the property market in future, since we do not have that quantity of credit the situation does not offer the kind of doom loop we had in the past. We need to stand by those rules. The second point is that we have to look at measures to try to move capital and workers better around the economy. Deputy Boyd Barrett recognised this at the time. The taxation measures we put in place in commercial property were not only about trying to get a yield; they were also an attempt to make an effort to shift economic activity into houses. We need more houses. The third point relates to how we increase capital expenditure. We are increasing capital expenditure by a quarter next year with an additional €1.5 billion into the economy. It is not clear to me at the moment that were we to go significantly beyond that next year with an Exchequer contribution, that we would be able to translate it into more construction and economic activity at a price that we could all afford. It is not clear to me that we could do that. This is why it is important that we pace increases in capital expenditure in a way that we are confident will not create further risk or lead to problems in the supply of more homes or investment in higher education.