Dr. Robert Sweeney:

As we were just discussing, in 2012 there is a dip in total expenditure when we include current and capital expenditure. Obviously, that was in the depths of the financial crisis when the Irish State was coming under a great deal of pressure in international financial markets. There was a general reduction in public expenditure during the years of austerity.

I imagine one of the reasons there was a large dip in the capital expenditure in particular was that we had extensive overbuilding of housing in the 2000s. In 2020, for example, we built about 20,000 houses and in 2019 the figure was approximately 21,000 houses. However, in 2006 we built 90,000 houses. Those are the total numbers of houses built, by the way, including public and private construction. During the housing bubble years, therefore, we had massive overbuilding of housing. That meant there was an overhang, or excess supply, of housing.

I would imagine that was a contributory factor to why capital expenditure was scaled back during the crisis years, in addition to the general pressures on public finances.

In hindsight, we definitely scaled back our public expenditure too much, not least because if you wait for the economy to recover, it will be more expensive to build houses in a booming economy than when house prices are cheap and costs have fallen. There was an oversupply of housing and there were general constraints on public finances and, notwithstanding those things, we did reduce our capital expenditure too much, as we have subsequently found out.