Professor Michael McMahon:

-----not just about where we get them. We are not in a position where we can easily bring them in from Germany because we do not have anywhere to put them.

I wish to add a bit of nuance, at least, to the logic. You could target bringing in certain workers to address these deficits - that may increase some current spending because you may have to pay extra to get them in - but if you target it, you can prevent it from becoming a widespread increase in wages. What would not work well is simply saying we have a shortage of housing, which means everyone is struggling with housing and this is the known infrastructure deficit on the housing side, so if we just give everybody more money that will work fine. That would just pump up the value of housing and rent even more. The solution to a supply constraint is easing the supply which would require a potentially targeted amount of spend in certain sectors to overcome those deficits. That is the nuance I would put on the logic. It is not a widespread matter of giving everybody more money; it is targeted.

Even if the Government, or any government, were to choose to try to do that, one of the challenges would be that there is right now a very strong economy with a booming private sector that is trying to invest in these same things. Therefore, one is competing at the toughest time for the workers and raw materials whose prices remain at levels that became elevated after Covid. As we point out, it is a conundrum and difficult position. It requires careful policy, strategy and planning and may involve additional current spending that could easily be accommodated within any of the rules by not cutting taxes elsewhere or not reducing the tax paid by certain segments of society. That is the nuance.