Seán Canney (Galway East, Independent) | Oireachtas source

Both witnesses are very welcome to the committee. It is interesting to listen to the way the conversations have been going. The first area I want to touch on is inflation and inflationary effects. We have an unprecedented set of circumstances, worldwide, as well as an unprecedented domestic situation. We have been saying that the common view on this is that it is a blip in that the current inflation is abnormal and will settle down again, it is hoped, in time.

After what amount of time would Mr. Makhlouf get worried that this is more of a sustained increase in the inflation rate? Would it be six months or a year? I refer in particular to the cost of living and how people's spending power is being eroded by inflation.

I am also concerned that inflation is eroding the results we will get from the capital projects we hope to deliver over the next ten years under the national development plan. Shorter lengths of road or rail line will be built for the amount of money we will have. If things keep going the way they are going for another six months, a year or two years, at what point would the Central Bank decide it needed to have another look at the matter? At the moment, the Central Bank is observing. Patience is one thing but this will have to be reviewed.

Deputy Michael Healy-Rae was talking about mortgages and young people. As a result of inflation and the cost of building homes, they are out of the reach of most people. I refer to young people and first-time buyers. Homes are partly out of their reach because of the limit on what they can borrow, which is based on their salaries or wages. I believe the limit is three and a half times their salary. In many cases, they will fall short of being able to buy a normal house. I will ask for the witness's opinion on a matter. The credit union movement holds a massive amount of people's savings but cannot spend it. The banks are charging credit unions because they need to keep a certain amount in reserve in the banks. The banks are holding their money and charging them for that. Would we be better off trying to make the credit union movement a third force in banking for mortgages for first-time buyers? Should we try to get something going there? I know the overall principle is that you can borrow as much as you can afford to pay back but we have created some anomalies and some people are trapped. They are saving money and doing everything right but when they think they have a mortgage sorted out, the price jumps again because of the lack of supply and moves out of reach again.

I would like the Central Bank's comments on all of that. I hope I have been coherent. This is all in my head and I am trying to get it out.