Mick Wallace (Wexford, Independent) | Oireachtas source

Given the forum we are in, I am far more interested in what NAMA is going to do in the future than in what it did in the past. Mr. McDonagh said NAMA paid approximately €32 billion for assets that were worth approximately €5 billion less. I do not dispute the claim that they were worth no more than €25 billion but when NAMA was set up, the idea was not to flood the market with assets at fire sale prices, which would have meant it would have been worse than what we got. The idea was to put them into deep freeze, hold them for a while and wait for some recovery in the market. In that context, it is a bit disingenuous to say there was always going to be some form of recovery and the value was not going to stay for ever at €25 billion or €32 billion. We can argue until the cows come home about what something was worth on a particular day.

I understand that the NAMA Act and the approach of the Minister for Finance are very strongly linked to how NAMA has acted but I feel there is some room for movement. NAMA seems to have been under great time pressure, which meant some stuff was sold at a high discount. The decision to sell in large bundles brought in the vulture funds, or investment funds as NAMA prefers to call them, and they have distorted the market dramatically. An example I have given many times is the two-bedroom apartments in Dominick Street, which were €900 per month and are now €1,500 because a small group of big players, investment funds from abroad, are having a big impact on the market.

How much autonomy has NAMA had when making decisions on what to sell, and when and where? How much of a role has the Minister for Finance had in its decision-making? Was NAMA told, "There is the NAMA Act and there are the rules, so away with you"? NAMA wrote a letter to the Minister on 28 September 2015, which included the following, "At our meeting with you on 15 September you requested that the NAMA board assess the increased contribution that NAMA could make to residential delivery if it were to be given a new mandate to maximise the delivery of housing in the period to end-2020." I accept that the Minister for Finance only started to talk about a new mandate in September 2015. NAMA wrote back to him, stating, "During the meeting you stated your endorsement of the board's objective of redeeming all senior debt by 2018 and the repayment of subordinated debt in March 2020 and you indicated that, in your view, achievement of these senior and subordinated debt repayment targets should take precedence over the provision of funding that would be required for NAMA residential projects in any revised strategy."

Am I to understand that NAMA has been strongly dictated to by the Minister for Finance, or am I misreading that?

My second question relates to delivery of the 20,000 units. NAMA has brought a new dimension into it by linking the role of the debtor in that. It is more or less saying that the debtor cannot be treated differently from anybody else, but I would have thought it might have more flexibility on that, or perhaps I am wrong. The land concerned is approximately 1,500 ha. If Brussels will not allow NAMA to deliver in the region of 30% social housing units from thatbecause of state aid rules, is there a mechanism whereby that land could go back to the State and it could carry out the delivery of that project? Is there any way around the state aid challenge to address the problem? Even though social housing provision has probably never gone higher than 15% in the State, realistically, 30% of the people who will be looking for housing in the next 20 years will probably be depending on the State to supply it directly. Therefore, the allocation of 10% from that pool for the supply of social housing is way below demand.

Added to that is the price of €300,000 for a house. I am sure the representatives realise that the people who have the most difficulty gaining access to housing have no hope on earth of coming up with that kind of money. Are they factoring into that price the cost of the land on which NAMA is sitting? Are they also factoring into that price a profit margin for NAMA?

On the issue of the Dublin Docklands strategic development zone, SDZ, which Deputy O'Sullivan also raised, SDZs are obviously very convenient for NAMA to work with. It is predominantly commercially orientated. I can understand the logic behind it. The location suits commercial property, but there is also a dire need for residential units in that area. I am fairly convinced that it was not NAMA but the planners in Dublin City Council that made the call that the Dublin Docklands SDZ area would be dominated by commercial property. Had NAMA any say in that matter?

Mr. McDonagh mentioned the cost of labour in construction and said that it had not changed much over the years. I employed a few hundred people, and most of them are still involved in construction in Ireland. The general worker is taking home a lot less than he was and the subcontractors are still working for crazy rates, and there is a big problem there. The guy who is doing the work on the site is making a lot less than he was. Anyone who tells Mr. McDonagh otherwise is being economical with the truth.

Mr. Daly made the point that the biggest social dividend would be obtained by paying back the debt as soon as possible, and he went on to say that repayment of the debt was a priority. Is that not a political statement also? He started off by saying that he was not going to go into the political area.

How we spend our money and how soon we pay down debt is important but if I am correct, we are taking about a debt in the region of 1%. I know there are people in Europe who would like us to pay down that debt as early as possible but at the same time there is some flexibility in that regard. I see all the countries across Europe availing of certain flexibilities in terms of strong bodies in Europe. It seems irrational to be in a rush to pay down debt that is costing 1% given the huge pressures created by the emergency around housing. Do the witnesses agree there is a political dimension to that statement? I am not saying there is a great deal of flexibility but there must be some options in that area.