Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

There is a lot of talk about overheating. We know the multiple causes of overheating which led to the last crisis, at the core of which was commercial rather than residential property. NAMA, which is a commercial property vehicle, is a manifestation of that. Commercial property is overheating and I am concerned that a bubble may be emerging in it. I wrote to the former Governor of the Central Bank more than a year ago on this issue. In fairness to Professor Lane, this week the Central Bank published important work which addresses some of the issues I raised. We gave examples of the leveraging of some funds and the sharp exit from the market, the impact it could have on commercial property and the possible knock-on effect on banks and the wider economy. What are the witnesses' assessments of commercial property? Given the pressures in terms of housing and construction workers, would the appropriate tool be to again increase stamp duty on commercial property to try to divert construction workers from commercial property into building social, affordable, cost rental and rental housing for the domestic market?

Mr. McCarthy pointed out that certain things cannot be done twice, such as unemployment rates and so on. One must focus on less low-hanging fruit and look at labour force participation rates. The summer economic statement indicates that the rates are dropping marginally, particularly in the case of women. Do we need to look at other levers, such as the cost of childcare, and invest in them to support and increase labour force participation at a time when we will repeat some of the cycle previously experienced? Investment will be required in that regard.

On the health overspend, the Parliamentary Budget Office has indicated that there will again be a significant overrun in health this year. The Christmas bonus not being factored in is another obvious matter that should be considered. These figures are not credible. In addition, the spending that transpires over the year is completely different from the voted expenditure. How should we deal with that? If one budgets in an unreliable way and does not provide enough resources in the first place, it will be deemed an overrun and can also be deemed as under-provision in the first instance. We need to get that right.

Unfortunately, I do not have time to go into the detail of the important issue of how we look at the fiscal stabilisers and set ourselves up as a committee. I ask Dr. Kinsella to send us the names of individuals with whom he considers the committee ought to engage. It is an important point.

One of the ways in which our budgetary position has improved, apart from the fact that we are relying on corporation tax receipts that are at windfall level, is that the cost of debt has significantly decreased. This year, we will benefit in the amount of nearly €500 million from the fact that the cost of debt has decreased. It is not a factor of the domestic economy. Something could happen in Italy, for example, and very quickly cause things to spiral in regard to debt costs. What are the witnesses' views in that regard? The ECB has indicated that debt costs are likely to remain static and that we are in a golden position in terms of costs. How vulnerable are we in terms of a spike in costs as opposed to the magnitude of our debt? Obviously, Brexit is an issue that has been talked to death and we need to plan properly in that regard, but there is a serious vulnerability that may be outside our control in terms of an increase in the cost of debt. It will not remain at the current level in the medium to long term.