Professor Michael McMahon:

I will start this one off. I thank Deputy Canney for the comments. We have had conversations in the past six years that I have been here with the Deputy about the same issue. The challenge we highlighted in the most recent fiscal assessment report was that when we talk about some sectors operating above capacity, construction is the one that comes to most economists' minds. That is where we really have problems. We have discussed in the past how an overheating construction sector that hit a bust contributed to some of the problems of more recent years because we lost a lot of capacity in that sector. We had builders, plumbers, electricians, etc., who were departing for other shores when there was no work in Ireland. The argument that we would put forward for responsible public engagement is, as the Central Bank outlined in its statement, there are things that are non-fiscal that can be done at this time that can really help. Many of us referred to the fact that projects which do not require a massive drain on the domestic construction sector would also be well supported and may involve fiscal costs. Alongside that, what we pointed out in the most recent report was the need to invest in the sector - to invest in apprenticeships - to encourage these sorts of things. These are all things that can be done and not all of them involve a fiscal cost.

When we look back at the lessons of failures from the past, one of the things worth pointing out is that one reason we had conversations - I was not here having this conversation with the Deputy at the time but that was a discussion point - about destroying houses was because we believed we built the wrong houses in the wrong places. That is one reason that argues in favour of having some checks and balances, but the Deputy is correct that we do not want to have so many that they end up holding us back in our ability to meet the growing needs of the economy. As our colleagues from NERI pointed out, we have had an expansion in population and our infrastructure on housing, energy supply, transportation and in so many areas has not increased.

I will give the Deputy the worst economist answer and the committee members can all hate me for it. The points the Deputy makes are important and correct, but the answer that we would give from this side is that throwing money at the problem right now with a constrained construction sector is not necessarily the right thing. That does not mean we cannot do the non-fiscal things, or that we cannot expand and target it in ways that will not draw on the domestic resources, but we have to do it in a gradual way. We cannot fix infrastructure deficits overnight and that is the challenge.