Mr. Seamus Coffey:

There are two points there. The first is about the appropriate fiscal position for Ireland to be in now. It is clearly to be running surpluses and there are two reasons for that. The first reason is that in terms of our finances and revenues, we are collecting significant amounts of corporation tax but it is a revenue source that we do not have full control over. It is possibly as likely to continue to rise as it is to potentially fall but because of the risks associated with it, we would not like to see permanent spending measures being dependent on that revenue coming in. The second reason is the position of the economy. We are at very low levels of unemployment, with a rate that is close to 4%. Employment rates are at record highs and there is simply no case for fiscal stimulus when it comes to the current position of the Irish economy. If we look at the corporation tax that it is coming in, it is being paid by a small number of mainly US multinationals. While they have activities in Ireland, the transactions, trade and sales are all to foreign markets. They are not here to service the domestic market so the payment of corporation tax is on exports. That is like an injection into the overall Irish economy. The Government is collecting it and if the Government spends it that is, in turn, an injection into the economy. If the economy is operating at as high a level as it is, then the Government is perhaps stimulating demand beyond the capacity to supply so it could just end up driving up prices.

There are legitimate concerns about housing supply and the ability to meet the housing needs of the population and there certainly is financing there to increase spending and have a greater provision of public capital spending for housing but the issue is whether we actually get more houses. If we have a 4% unemployment rate, we do not have tens of thousands of skilled labourers on the live register available to step in and come onto sites and build the thousands of new houses that everyone agrees we need. Do we have the capacity in the economy to actually deliver them? One could say that rather than saving money and setting some money aside in various savings funds, which the council has welcomed, perhaps we should be spending more of that money now in the area of housing. However, the key concern would be whether we actually get real changes and real increases. If the capacity simply is not there, we just end up putting more money into the economy and having more money chasing a pretty fixed supply of resources. Maybe we could attract more workers into the construction sector but the sectors that lose those workers will try to attract them back and then we could end up in a cycle of significant wage inflation that, over the medium to long term, could have a big impact on our competitiveness. If we were to say that housing is our priority, and I am sure lots of members would agree that it is a priority, perhaps we have to make space in the economy to deliver it. Maybe certain other things should be scaled back or reduced and maybe some of those choices might not be palatable. Perhaps we need to continue the roll-out of retrofitting of existing housing but maybe we should focus on building new housing if that is the priority. If we want to do both, we must ask if we have sufficient workers. We could look at the commercial area, at public infrastructure, at transport and at workers being used to build data centres and so on who could perhaps be redirected to other areas. These choices are not easy but given that we are at 4% unemployment, just putting more money into something like housing is not necessarily going to provide more housing.