Mr. Seamus Coffey:

Absolutely not. An issue with the foreign direct investment model is that it has, thankfully, tended to be stable. The employment numbers have remained stable over recent years. While there are potential risks, they are not materialising. There is a view that the impact of foreign direct investment on the Irish economy is going to fall. It is quite large but the hope is that it will continue to grow. With 300,000 working in construction, one can clearly see that there is an issue because we did not need, and do not need, 90,000 housing units per year. Now, however, we have gone in the opposite direction.

The Deputy is correct to categorise housing and construction as the second distortion and it is sending us in the other direction. The view, with which we agree, is that housing output is too low, but our concern is that once it picks up, which we expect and hope for, it could go above a level that is sustainable. If we believe that 30,000 to 35,000 housing units are needed per year, we are clearly well below that at the moment. There has been a build-up of pent-up, unmet demand for a period of three, four or five years. The longer housing supply remains low, the more the pent-up demand becomes. Then housing output does not just go to 30,000 but to 40,000 or 50,000. Then we say that is not sustainable. The issue is what we do at that point. Do we consider the revenue that 50,000 houses per year might bring in as being permanent, build that into our fiscal arithmetic and then suddenly finding that housing output falls? Again, given the nature of the Irish economy, it might not just fall to 30,000 but lower again.