Dáil debates

Tuesday, 20 October 2015

Ceisteanna - Questions (Resumed)

Economic Management Council Meetings

4:50 pm

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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5. To ask the Taoiseach the number of times the Economic Management Council met in April 2015. [18119/15]

Photo of Gerry AdamsGerry Adams (Louth, Sinn Fein)
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6. To ask the Taoiseach the number of times the Economic Management Council has met since the new year; and if he will make a statement on the matter. [22957/15]

Photo of Gerry AdamsGerry Adams (Louth, Sinn Fein)
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7. To ask the Taoiseach if he will confirm that the Governor of the Central Bank of Ireland briefed the Economic Management Council on the possible implications of a Greek exit from the European Union and the euro; and if he will make a statement on the matter. [31705/15]

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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8. To ask the Taoiseach if the Economic Management Council met before the budget; and if he will make a statement on the matter. [31769/15]

Photo of Joe HigginsJoe Higgins (Dublin West, Socialist Party)
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9. To ask the Taoiseach when the last meeting of the Economic Management Council Cabinet Committee took place. [31775/15]

Photo of Ruth CoppingerRuth Coppinger (Dublin West, Socialist Party)
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10. To ask the Taoiseach when the last meeting of the Economic Management Council took place; and when the next one is scheduled for. [31782/15]

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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11. To ask the Taoiseach if he will report on the Economic Management Council; and if he will make a statement on the matter. [32870/15]

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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I propose to take Questions Nos. 5 to 11, inclusive, together.

The council has met on 15 occasions during 2015. The last meeting took place on 16 September. The council met on six occasions in April this year.

The Governor of the Central Bank has attended a number of council meetings since the Government came into office. As a Cabinet committee, confidentiality of discussions at the Economic Management Council are protected by the Constitution and, in line with long-standing practice, it is not appropriate to answer questions about proceedings at the council and the agendas of past or future meetings.

The council provides a forum to discuss strategic issues before they are presented to Government for consideration and decision. This may include issues of a budgetary nature.

Like other Cabinet committees, it does not replace the role of Government where all Ministers have an opportunity to contribute to decision-making. The budget was discussed and agreed by the entire Cabinet.

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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I have tabled two of these questions. The Taoiseach has frequently praised the work of the Economic Management Council because it supposedly keeps a very close eye on all economic and fiscal issues. Does he not agree that given the lack of progress on homelessness and housing it seems the Economic Management Council, despite having 15 meetings in more recent times, is not in as much control of the situation as the Taoiseach might have thought previously? Despite economic growth, more than 1,500 children, an 80% increase, live in emergency accommodation and up to 5,000 people are homeless. There is policy chaos around housing and homelessness.

The Economic Management Council must keep a close eye on the fiscal situation, but on the Friday before the budget approximately €700 million was allocated to health on top of last year's €600 million supplementary budget. There seems to be either gross mismanagement or deliberate fraudulent estimates in health at the outset of the year, where clearly the budgets allocated are not realistic, adequate or robust enough, despite what the Minister says at the beginning of every year. Last year, the Minister, Deputy Varadkar, stated he had received enough. Clearly he did not and neither did he get enough the previous year. Does the Taoiseach believe the model of the Economic Management Council is adequate, because the health services are in chaos? There is no stability in our health services at present. They are in chaos. Morale is very low. Staffing and supports have been under-resourced. We pointed out to the Taoiseach four key areas where savings revenue could be raised to support health services, including the recouping of fees from private medical insurers, agency staff, drug procurement and a tax on sugar sweetened drinks. We backed this up with research from the Comptroller and Auditor General, the Fiscal Advisory Council, the Department of Finance's report and the Revenue Commissioners with regard to a tax on sugar sweetened drinks.

The Economic Management Council's grip and impact on policy seems to be less and less influential. We have no idea about the extension of free GP care to 12 year olds because the money allocated does not go anywhere near a full extension. One wonders if it is like the promises made five years ago, in that they are not real in the sense of any commitment to implement them over the coming 12 months. The Minister, Deputy Reilly, has already clarified that not every child will be covered by the child care commitment in the budget and that it will be September at the earliest before the programme is introduced. Is the Economic Management Council overseeing all of this? The money needed to fulfil commitments made by Ministers is not provided, with the result that we have budgetary figures which are best open to question and, in some instances such as health, are in my view clearly very dishonest.

I do not know how the Economic Management Council of the Cabinet can stand over what has happened in health budgets over the past three years, particularly their inaccuracy, dishonesty and falsity. False figures are being given to the Dáil every year for health services.

5:00 pm

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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You are making serious allegations and you know that is not parliamentary behaviour. You are saying that false information is deliberately being given to the Parliament.

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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The figures we got for health-----

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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You are here as long as I am. You know you cannot say such things.

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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Can one not say a Government is being dishonest?

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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You should not say that false figures are being given.

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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I said it at the time, two years ago.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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You should not have said so. I am sorry but if I was in the Chair, I should have stopped you.

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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I was proven correct. It is €600 million this year and it was €600 million the year before.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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You should not accuse people of deliberate falsehoods.

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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It is my political view that the books-----

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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You may have a political view but making a statement of fact is another thing.

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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There is plenty of precedent. When Fine Gael was on this side of the House, it accused plenty of Governments in the past of producing fraudulent figures.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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I was not in the Chair.

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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The bottom line is that discretionary medical cards were taken from very sick children because the figures were falsified at the time. We were given a phrase along the lines of "probity controls" and nobody knew what it meant. To be fair to the Minister at the time, Deputy Reilly, he said he could not stand over the figures the day after the budget was announced. The Economic Management Council and the Minister for Public Expenditure and Reform stood over them. What happened? When we went forward seven or eight months, it transpired that those figures were never going to be anywhere near meeting the need. That caused chaos and distress for many families, and the same has happened over the past 12 months. There has been much distress caused to front-line workers in the health area because they were told to operate within a budget.

Late one night, a white paper or a Supplementary Estimate was produced, releasing an extra €1.5 billion, and the Irish Fiscal Advisory Council was not even told about it. There was much hype on a day when €1.5 billion was given out, involving presentations and media handlers, but in the previous four or five days, another €1.5 billion was given out and there was not a word about it in that we cannot get information about it. We had to go searching for that information about what it is for and what Departments would be affected. Over the past three years, the Government's handling of the fiscal position in health has been disgraceful. I am very clear that it has been dishonest, in my view, as the Government wanted to get its figures right on the tax front. It was a certain political operation for the budgets for the past three years and health was getting in the way. These were never real figures for the health sector.

That has been going on and there is a need for a very honest debate about our health services, particularly about what they need. The HSE has not got the required level of funding to perform the level of services that the Government wanted it to perform over the past three years. Nobody can dispute that reality, as there has been a chronic mismatch between the level of services that people want and which the Government has ordained should happen against the resources put to that end. Despite meeting 15 times, the Economic Management Council has allowed chaos to reign in health, as well as in housing and homeless policy.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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I thank the Deputy. When the Government was elected to office, the economic position was very precarious. We were blocked from international markets, interest rates were 15% and we were haemorrhaging jobs by the hundred thousand. Unemployment was at 15.2%, with national debt rising and the deficit at €22.5 billion. Given the changes, decisions and sacrifices accepted by the people, we are now in a very different position and we hope to have the deficit eliminated by the end of 2017 or early 2018. That will bring about a very different scenario for the country, whoever the people decide to elect in the mean time.

I have always considered that the operation of the Government in this case involves two parties, the Fine Gael Party and the Labour Party. With respect, one of the important issues at a time of crisis was that the leaders of the parties - with a Minister for Finance and Minister for Public Expenditure and Reform working in the financial area - had regular contact, updates and dialogue, meaning that everybody knew, as the issue evolved from day to day or week to week, what decisions needed to be looked at and made. I have said it before publicly that the Governor of the Central Bank said to me that it was quite likely that in a particular week it could have been necessary to put the Army around automated teller machines and tell people that capital controls would have to be introduced, which would have been absolutely disastrous for people in Ireland. That was avoided. The purpose of the Economic Management Council was to have continuous engagement where it was necessary and appropriate. In its own way, it had an impact on keeping the discipline and character of the Government very much focused on the job we had to do.

The Deputy has raised a couple of serious issues, including homelessness. It is not acceptable that 1,500 children should not have a home to go to. It is unacceptable. The problem is that the total collapse of the construction sector meant we were coming from a very low base. As Deputies know, we were building 90,000 houses per year and that dropped to approximately 8,500 per year. It needs to be approximately 20,000 or 25,000 for a number of years in order to deal with the issue, so it will not be sorted out in the short term. Through Cabinet sub-committees and the Ministers responsible for the environment, finance and others, there have been a series of decisions about what needs to be done. Decisions were made at the Cabinet sub-committee and referenced through the Economic Management Council to the Cabinet last year in respect of homelessness and rough sleepers on the streets. These dealt with the purchase of the night café, extra resources given to homelessness housing agencies and so on. That made a big difference but the matter is now very challenging and it must be dealt with through the social housing scheme, which is nationwide, with money on the table. With regard to private rented accommodation, the Department of Social Protection is in a position to assist in each individual case where there is pressure on a tenancy. There is also the restoration of what are called "voids", or places that were not habitable; they are being done up and made comfortable for people. The Minister is proceeding to use his authority under the Acts to expedite modular housing in two tranches of 150 and 350. I hope he will have a modest number in position by the end of the year.

This is not an acceptable position. The construction sector can give a response that must be practical and incentivised, and there should be a return in that case. We have spoken about development levies and the building regulations, as distinct from planning regulations, which are completely independent. There are questions, for example, as to whether one needs two or three car spaces per bedroom in units and other issues also must be addressed, such as requirements for fire safety conditions and so on. Getting this moving is a multi-edged challenge. It is not a question of money but managing the resource to make it happen. We can consider the thousands of planning applications that contractors will not commence because there is no return because of development levies and the extent of building regulations etc. These issues must be examined. The Minister for the Environment, Community and Local Government, Deputy Kelly; his Minister of State, Deputy Coffey; the Minister for Public Expenditure and Reform, Deputy Howlin; and the Minister for Finance, Deputy Noonan, are working very hard in that area-----

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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It is chaotic.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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-----but I would like to see results as quickly as we can.

The Deputy mentioned the health area. He knows from bitter experience-----

Photo of Micheál MartinMicheál Martin (Cork South Central, Fianna Fail)
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Not bitter, no.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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-----the position since the Health Service Executive was set up. Each year the Minister would approve a budget and he or she would refer it to the HSE, which would then prepare a health service plan. That would come back to the Minister for approval and be sent back to the HSE for implementation. In many cases, as the Deputy is aware, the plan was never followed, either because something else happened or money was not ring-fenced for particular areas, such as mental health. That was pointed out on many occasions.

This resulted in a very unsatisfactory position. Of course, it is always difficult with demand-led services where a population is growing at the more senior level and where there is a greater demand for health services. Next year, as Deputy Martin is aware, we are out of the preventive arm of the Stability and Growth Pact. There will no longer be an opportunity to have Supplementary Estimates. If money falls short in any Department, it will have to be made up either from savings in another Department or within the Department itself. That is a very changed situation. In respect of the allocations made in the Supplementary Estimates going into each Department, obviously the growth in the economy has been very strong. Many of these were commitments in any event, and for 2016, Ministers were able to stay within the terms set out in the spring statement. Having said that, there are still clearly pressures and demands in many Departments and it has not been possible for Government to meet all the demands. So-----

5:10 pm

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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There are two other Deputies who have questions in this group.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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Gabh mo leithscéal.

Photo of Gerry AdamsGerry Adams (Louth, Sinn Fein)
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The Taoiseach is aware that there is a concern about the expanding power and role of the Economic Management Council, EMC. It was originally established, as the Taoiseach has outlined, with the status of a Cabinet committee to manage the Government's programme on economic planning, budgetary matters and banking policy coming out of the crash. I can understand, to a certain degree, the logic of that and the need to have a focus on those matters. However, it appears that its power and influence have grown, in so far as it is possible to tell from the opaque answers we sometimes get to questions to establish this. It appears that the EMC acts almost as a Government within the Government and then brings forward its decisions to the Cabinet, and also that some of the senior people - civil servants and political advisers - who attend these meetings may well have more influence on the decisions taken than do members of the Cabinet itself. There is a question about whether the role, the decisions and the actions of the economic council are replacing the constitutional responsibility of the Cabinet.

There are also big issues that need to be dealt with. There are hundreds of citizens on hospital trolleys. Has the economic council discussed that? There is the issue of rent certainty or the lack thereof. Has the economic council discussed that? There is an ongoing issue around the lack of Government plans to tackle the housing and homelessness crisis. The Taoiseach says that homelessness is not acceptable. With absolute respect, let me say that homelessness is a direct consequence of his Government's policy and it is acceptable to the Government. It would not be happening if the Taoiseach decided to stop it happening and if he got houses built for those people who need them. I raised the plight of the Traveller community earlier. Its accommodation funding was cut by 93%. Imagine - a 93% cut. Did the Economic Management Council take that decision?

I asked question No. 7. I do not recall the Taoiseach answering it, although he may have and I may have missed it, and if so, I apologise. I asked him to confirm whether the Governor of the Central Bank briefed the EMC on the possible implications of a Greek exit from the European Union and the euro. If he has not answered that, I would be obliged if he would tell us whether that happened. Could he tell us what meetings, if any, the EMC has had with the banks in the last year?

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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Could Deputy Adams repeat the last question?

Photo of Gerry AdamsGerry Adams (Louth, Sinn Fein)
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How many meetings, if any, has the EMC had with the banks in the last year?

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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Would Deputy Boyd Barrett like to put his question? I would be more comfortable if we were not rushing.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Who is advising the Economic Management Council on the economics of housing? Whoever they are should be sacked. We are facing the worst housing and homelessness crisis in the modern history of the State. No matter how much the Government talks about it and makes announcements, it gets worse on a daily basis. Under the Taoiseach's stewardship, the housing lists have gone from 96,000 to 130,000. That is a disastrous failure by any definition. The number of children and families living in homelessness increased exponentially. Waiting lists have gone from approximately eight or nine years, which was bad, to 18 years. The wait is 18 years in Dún Laoghaire if one joins the housing list now.

This is an index of disastrous failure, which is now not just affecting people who would traditionally have had difficulty affording a home, but is reaching up into every sector of society. Nobody who is not very rich can afford to put a roof over his or her head. That is where we are at. Anybody who finds themselves, for whatever reason, without a roof over their head and looking for one, is, by definition, in trouble, unless they are earning €70,000 or €80,000 a year, which most people are not. We now have the phenomenon of the working homeless, people who are going out to work and are sleeping in different hostels on different nights, trying to do a full day's work while not knowing where they will be sleeping that night. That is what is going on. It is beyond belief.

I am asking what advice the Economic Management Council is getting on this. The Taoiseach made a very telling statement on budget day: when asked about rent controls, he said that while he was looking at the matter - we keep looking at these matters but doing nothing about them - he would not be doing anything that would interfere with the market. In other words, it was an economic decision that was informing his refusal to introduce rent controls. As he well knows, one of the major contributory factors to the homelessness and housing crisis is spiralling rents that are unaffordable and consequent evictions, or the inability of people to access affordable housing, because we are essentially dependent on the private sector. Is this not the problem? Whatever advice or economic doctrine the Taoiseach is working on is telling him we must not interfere with the market, and that is the fundamental problem; in fact, we absolutely must interfere with the market. He needs some advice from somebody who will tell him that we desperately need to interfere with the market and that we must not allow the market to dictate this issue or imagine that the market is going to solve it, when he has pursued this policy of hoping the market will sort the problem out for the entire duration of this Government and the market has self-evidently not sorted the problem out. Does the Taoiseach accept that? Does he accept that the advice is wrong, the policy has been wrong and the problem is continuously getting worse? If we do not get that admission, we are on a hiding to nothing in terms of a chronic situation.

Finally, on the economics of housing, the Taoiseach keeps saying that we need to increase supply. First of all, it has not happened. He keeps referring to the fact that we built 90,000 houses during the boom and now building has dropped to abysmal levels, so what we need to do is get supply up. Would he acknowledge the basic economic point, and does the EMC even discuss this point - that even when we were building 90,000 houses per year, mostly private, during the boom, the housing crisis was still getting worse? The numbers on the housing list were increasing even then. The idea that supply equals demand - this economic notion - is just nonsense. Is the Taoiseach getting any contrarian advice, to use the Nyberg phrase, in the aftermath of the analysis of economic crash? Is he getting any contrarian advice that is challenging the orthodoxy-----

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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Just allow for a reply.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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-----that supply equals demand, because it clearly does not?

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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Deputy Adams raised the point about the Economic Management Council and whether it was assuming the constitutional responsibility of the Cabinet. It is not. The Economic Management Council, if it discusses an issue of financial control or whatever, must present its recommendation to the full Cabinet.

It is not the Cabinet. It is not assuming any constitutional responsibility beyond its remit and any recommendation from the Economic Management Council has to be validated, verified and accepted by the entire Cabinet.

The sub-committee on health discusses the issues surrounding health with the relevant Ministers from different Departments on a cross-departmental basis and the Minister for Public Expenditure and Reform would have met each of the Ministers individually in regard to their proposals for what they required in regard to the final decision to be taken as to what they would be allocated.

I cannot recall at which meeting, if any, that the Governor might have briefed on the Greek exit, although on a number of occasions the Cabinet discussed that matter as to what might happen.

There were 15 meetings of the EMC last year and while the EMC worked with the banks, there were three meetings with the banks. I do not have the dates to hand. If Deputy Adams wishes, I will get them for him.

In response to Deputy Boyd Barrett, the EMC is not advised by anybody in respect of housing. It is not a housing committee. The social policy committee, on construction, deals with the question of housing at Cabinet sub-committee level and all of the relevant Departments and all of the senior personnel attend there.

I agree it is not acceptable that this 18 year waiting list applies. Dún Laoghaire-Rathdown is an area well known to the Ceann Comhairle. I note the burgeoning pages of some of the newspapers with lots of superior houses in locations there for sale, and some of them appear to be moving a far distance from those who are homeless or who need housing now.

On what I stated previously about the rent, there are multiple and complex reasons for all of this: the recovery in the economy, the growth in the numbers at work, delayed home ownership, the reduction in the traditional bed-sit accommodation in Dublin because of new regulations and the exit from the rental market of landlords for a range of reasons. Many of the problems stem from the chronic lack of supply of housing which causes a knock-on problem across the property market and wider society, from renters to first-time buyers to low-income households, and the only sustainable solution is to increase the supply of affordable housing generally.

5:20 pm

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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It did not work during the boom.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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If there is a room available in Dún Laoghaire for rent and there are 20 persons looking for it, clearly, the owner has a choice who to give that to and, as a consequence, rent rises. If there are 20 rooms to rent and 20 persons looking for them, it is a different situation.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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It did not work during the boom. Rents went up.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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The point that we made clearly is let us not make matters worse. A lot of the talk that is going on about this is not helping the situation. The Ministers, Deputies Kelly and Noonan, are working on this assiduously to see what practical package of measures can be put together here.

There was a report by DKM, which was commissioned by the Housing Agency and the Private Residential Tenancies Board, which warned last year that introducing rent controls would make the current situation worse for tenants because rent controls would, all things being equal, reduce the supply of rental accommodation pushing market rents up higher than they would otherwise be for all tenants for a short space of time. That is the balancing line.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The Taoiseach should sack DKM. It is rubbish.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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If one interferes in the wrong way and one makes it worse, that is not good for anybody.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Rubbish. The Taoiseach should sack them.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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That is why the relevant Ministers are discussing a package of measures rather than reduce the supply of rental properties and increase, rather than reduce, the security of tenure available to those renting in the private market. That is an important message.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The Taoiseach needs another adviser.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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While commentators have a facile view that simply by doing this everything will be rosy, that is not so. To interfere in the wrong way would be damaging to everybody.

Written Answers follow Adjournment.