Dr. Tom McDonnell:

The Deputy directed one question specifically at me. I will follow on from Dr. Kelly’s point. I refer to the issue of scale and the ability to improve productivity by increasing scale, whether it be through new methods, prioritising modern methods of constructions or building factories within Ireland, effectively making it a manufacturing good as opposed to just construction. Ultimately, with regard to that issue failure, we have had market failure in construction for a full quarter of century now if the few years up to 2008 are included.

The Deputy asked me specifically about a State affordable housing company. That would be a solution over a longer term because the labour capacity issues cannot be dealt with in the short term. There is no silver bullet there. However, there are a number of advantages, such as, for example, creating an improved perception of construction as a sector to get into so it is not considered as volatile. There are still the scars of 2007-08, which is disincentivising and discouraging people from going into the sector. We need to reorient our education system more towards apprenticeships as well. We have a fragmented private sector. There are only two big players. We do not have a properly competitive market that can produce the high levels of productivity we want. There are planning issues as well. In addition, a housing company of that ilk ideally would focus on lower cost housing, that is, affordable housing, with the private sector focusing on the higher cost, higher yield builds, as it were. We have done some work on this. A housing company would not be the panacea in the short term. There is no easy way out of this in the short term. It will take a number of years to ramp up the scale no matter how it is done, unfortunately.

Regarding the labour supply, it simply is not there. If we want to deal with it, we cannot do so through apprenticeships in the short term because that will take too long. However, we can incentivise people to come into Ireland with work permits, for example, and dramatically scale that up. That could help some of those constraints in the short term.

On the health of the public finances, financing from the State perspective need not be a problem in the short term. However, all of the issues around service delivery, planning and regulation will all remain as institutional impediments and constraints in the short term. It is worth investigating why Ireland is so poor at these things and which countries in Europe and beyond are able to do these things quicker and cheaper. What are they doing differently from what we are doing? We need to have that analysis to understand the impediments. What is unusual about Ireland that makes it so bad at these things? Where are the successful examples, not just in housing but in infrastructure, full stop?

We can talk about State housing companies, cost-rental models, affordability and all of these things. It is definitely there as a mechanism for the longer term, over 20 or 30 years, to deal with the persistent and consistent market failures in housing we have seen for so long now. However, unfortunately, it would not be a panacea over the next two to three years.