Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I will deal first Deputy Heydon's question on the very risk of overheating of our economy. This is a very real risk but one which we should not over-exaggerate..

The enormous political challenge over the next couple of months, or perhaps the next year, is to break the cycle of boom and bust that we have had in Ireland for generations, the procyclical economic policies that slash taxes and increase welfare and spending when things are going well only to take it all away again when things are going badly. We should do the reverse. We should balance the books, start running a small surplus into the future and start paying down our debt so that when the economy slows down, as it inevitably will, or when there is another recession - that might be far away but it might happen - we will be in a position to increase spending and cut taxes, which is what should be done during a recession. That was not possible in the past because of irresponsible economic policies and I am determined that it should not happen again.

There were two features to the overheating that occurred previously. There was a credit bubble, with excessive lending by the banks to the construction industry, in particular, and to people buying homes. That does not appear to be the case currently. I do not see evidence of a credit bubble. Second, extra day-to-day spending was funded with windfall taxation from stamp duty. It was a huge mistake by previous Governments to commit to extra current, ongoing spending across the board that was funded by a temporary windfall in taxation from stamp duty. We must bear in mind the vulnerability of corporation tax receipts and not allow ourselves to repeat that mistake. We are nowhere near that yet, but corporation tax revenues are buoyant and we should not make the mistake of using them, as they might not always be available, to fund long-term commitments.

We should use the buoyant receipts from corporation tax for items such as investment in infrastructure, as Deputy Heydon mentioned. He is spot-on in that regard. We must increase infrastructure spending in transport, housing, schools, universities, healthcare facilities and climate change. That makes both economic and social sense. Our spending on public infrastructure is up 18% so far this year, and it will increase by another 25% next year. We are tackling some deep social problems, for example, the social housing shortage and the general housing shortage. We are also removing bottlenecks to future growth by investing in transport. That makes good economic sense. Continuing to increase our spend on public infrastructure, road projects and school projects will not cause overheating. Other errors may cause that.

In terms of the facts about housing that were mentioned by Deputy Cullinane, I will not go over the debate we had earlier. We all acknowledge the housing shortage and the crisis that exists with homelessness. I acknowledge that there are more people in emergency accommodation today than there were a year ago. I am not in denial about the challenge we face in that regard. However, one fact the Minister, Deputy Eoghan Murphy, did not mention in the debate earlier is the figures that have just been released on rents. They show that rents increased by just 1% in the last quarter and by 1.1% in the previous quarter. That is two quarters in which rent has increased by approximately 1% as compared with a year-on-year increase of approximately 7%-----

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