Professor Michael McMahon:

I am going to answer this question in two parts. Would it be good if the constraints were alleviated or pushed much further out? The answer is "Yes". Is it clear that there are easy measures on the table right now that could be used address the level of constraint in a way that is not going to interact with higher inflation and, at least in the medium term, add to these problems? It is much more difficult to give a one-word answer to this question. For example, the Deputy is right that the labour aspect is a big part of the supply constraints. If we focus on construction and we wish to address the housing shortfall, it will be necessary to do so through this sector and cost pressures have hit there. World cement, timber and steel prices all rose sharply. They have come back somewhat since, but it remains a tight and expensive market into which the Government is already trying to ramp up investment. The nervousness I would have, therefore, is that we are not at a point in the cycle now where we can simply say that if we were to put an extra amount in here, it would alleviate these supply constraints. On the first part of the Deputy's question, economists would love these supply constraints to go away. This would make it much easier to grow without inflationary, rent and wage pressures, but it is a very difficult thing to do.