Micheál Martin (Cork South Central, Fianna Fail)

Inflation is a concern and we must work to reduce the level at which it stands. However, people must face reality regarding the origins of inflation. It is important to distinguish between external factors, which are beyond domestic policy control, and internal factors. Externally, the main cause is higher mortgage interest payments due to ECB interest rate increases. Excluding mortgage interest repayments, the rate of increase in the CPI inflation rate would have been 2.6% in 2006. Mortgage interest is adding approximately 2% to inflation at present. Foodstuffs and oil have also seen price increases and these too contribute, both directly and indirectly, to inflation. The Opposition likes to claim that we are to blame for everything that ever goes wrong. However, to blame us for world commodity prices is stretching it beyond even its own elastic standards.

Inflation is also higher here because of higher growth in the economy. If the Opposition wants to argue for lower growth, that is fine, but it should tell us which jobs should not have been created and which investments should not have been made.

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