Oireachtas Joint and Select Committees

Wednesday, 10 November 2021

Committee on Budgetary Oversight

Inflation: Discussion

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

I apologise to our guests. I did not hear their earlier contributions because I was at another committee next door. It was a bit frustrating. I apologise in advance if I repeat questions. What do the witnesses think of what I would favour to deal with energy price rises, rent and house price increases and other forms of inflation which will adversely impact on our economy and society? I favour controls. Controls, in and of themselves, do not solve all the problems. If there is a genuine lack of supply in an area, the controls do not solve the problem because of either genuine shortages or as I expect it is much of the time, bad planning, whether it is a failure to plan or allowing market cycles to determine the supply of certain things.

Having said all that, and if we take housing inflation as an example, while I do not think rent controls solve all the problems, as a stopgap until we get planning right on housing and we can deliver the supply that would at least deal with the shortage, it is a legitimate thing to do. The other aspect is if we need to subsidise certain things because they are just too important to allow them get out of the reach of ordinary people then we must subsidise them. We accept that logic in some areas but we often reject it in others. I would argue we must subsidise certain things because we just have to have them. Thus if public transport costs are getting too expensive, one cannot keep letting them get more expensive, especially if one wants to get people out of their cars. One must say we are going to subsidise to make it cheap and affordable and that we are going to do the same with housing. Of course, energy becomes more controversial because there is a climate imperative but also an imperative to ensure ordinary people can heat their homes. I would be interested in the economists' views but I certainly think controlling energy prices at this point is a legitimate thing to do, however it is done. That might be holding off on carbon taxes or just controlling the prices. I would like to hear the economists' thoughts on using price controls, essentially, to deal with these problems. They would not be a silver bullet but a mechanism, until we get the planning side right, to deliver things that can ensure shortages are not generating inflation or bottlenecks, for that matter, in particular areas.

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