Eamon Ryan (Dublin Bay South, Green Party) | Oireachtas source

We will raise that at the Sub-committee on Dáil Reform, which is to meet later this afternoon. It is an important point.

Can I address the substance? It is welcome that we at least have the chance. I am glad that, even at the last minute prior to this document being sent off to Brussels, we have this chance.

However, we should return to this issue. Rather than having the Minister provide a further five-minute statement at the end of this debate, the Dáil, in ordering its business either this week or next, should provide some form of mechanism to allow responses to be made to Deputies' contributions. In the absence of a committee, the Dáil should be able to order its business in a way that allows interaction and real debate. We must heed the point made in the Nyberg, Regling-Watson and Honohan reports that groupthink and a lack of questioning, dialogue and interaction are among the main reasons we got ourselves into economic difficulties.

One of the changes I would like to make relates to long and medium-term risks. Is it possible to adjust the risk analysis featured in table 16 on page 26 of the stability programme update? Political instability should be included with domestic risks. The way in which the Dáil and a new minority Government work poses one of the greatest risks to our economic circumstances. This factor should be reflected in the report. While it would be difficult for the Departments of Finance and Public Expenditure and Reform to make this change, it is required if we are to be accurate and honest about the economic risks we face.

The other two risks are loss of competitiveness, which is set out in the update, and the underinvestment in capital expenditure over the past five years to which a number of Deputies alluded. Having criticised the absence of certain Ministers, I will respond to a point made by Deputy Richard Boyd Barrett. During the difficult period in which the Green Party was in government, it was our shared assessment that, in responding to the crisis, we had to avoid imposing an excessive reduction in the capital budget. As Minister, I was engaged in an investment plan for clean energy involving expenditure of approximately €30 billion. Unfortunately, this proposed investment was subsequently cut. The Green Party also insisted that any troika agreement make provision for financing and building the Dublin metro, including European Investment Bank funding for the project. I regret that this project was also cut.

Deputy Boyd Barrett also referred to Irish Water. I am proud that expenditure on water and wastewater services under the then Minister for the Environment, Heritage and Local Government, Mr. John Gormley, was twice as high as it has been in the past five years. We spent €500 million per annum on this area because we recognised it as a priority.

There is common agreement that the low level of capital expenditure presents one of the greatest risks to the economy. Some of our infrastructure bottlenecks present the greatest risk to the economy and its growth rates of between 4% and 5%. Competitiveness risks are related to infrastructure investment because the cost of providing housing, especially in Dublin, is increasing pressure for wage rises. This issue affects our competitiveness.

I welcome the change in the medium-term objective to allow us to increase expenditure. I would target any such increase on housing in the forthcoming budget. I understand this could be done within European rules because a smoothing exercise applies to each four-year period during which capital expenditure is measured. As a result, an increase in expenditure next year could be multiplied without breaking the medium-term objective or the other stability criteria. Capital expenditure and current expenditure are accounted for differently. The scale of expenditure on housing could and should be ramped up radically because housing, as several speakers noted, is the biggest crisis we face.

Public investment should drive housing construction. If, as the Construction Industry Federation argues, Central Bank limits are keeping housing prices below the cost of housing, making housing construction unfeasible, the State should build homes. Removing the 15% profit margin achieved by the private sector would allow us to close the gap. Further, the development of the cost-rental model set out by the National Economic and Social Council would allow us to raise funding for a public housing programme elsewhere. I understand Austria and other countries which operate such a programme are able to do this off balance sheet. This would provide greater leeway to tackle the current underinvestment in housing.

I would like to change the risk assessments to reflect a second crisis, namely, the crisis in the transport systems of our major cities, specifically Dublin, Cork, Galway and Limerick. The economy is growing at a rate of 5%, yet there are no major large rail-based public transport projects ready to go. As the Acting Chairman, Deputy Lahart, will know from his locality, the traffic system is grinding to a halt as the M50 enters gridlock. These risks to the economy need to be reflected in the stability programme update. There is a commensurate need to radically increase expenditure on bus networks and walking and cycling infrastructure as the first immediate response to these risks.

In addition to the immediate challenges I have outlined, we also face challenges in health and education. The provision of funding for third level education, for example, must be tackled immediately.

I hope the Dáil or a committee will be able to debate these issues further and some of the political issues we face will be overcome. We could use the proposed medium-term review set out in the capital programme to do some serious thinking about the long-term investment we will make in capital spending to get the national spatial strategy right. We must ensure we do not build houses by numbers and instead build the right types of housing in the right places.

We must also address the climate change challenge by radically ramping up investment in new, clean energy and efficient systems that will make the country more productive. If a Government can be formed, it should spend time working to achieve consensus on strategic investments in order that capital expenditure, when ramped up from 2018-19 onwards, is allocated to areas that make sense.

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