Michael Fitzmaurice (Roscommon-Galway, Independent) | Oireachtas source

I thank the witnesses for their presentation. I agree with much of what was said by Deputy Penrose. On shopping local, people may try to save a few cent by going to supermarkets but if they need something at night or at 7 a.m. in the morning they can phone their local shop to arrange to collect it.

My mother has known Mr. Boland for many years. He is joined by Ms Lennon. Last Sunday morning, three publicans from my constituency contacted me to say that if things do not change, they will close up. People might wonder what difference that will make. It would affect three more families and businesses.

As Deputy Penrose said, the rates are crippling them. If there are no people coming in the door, there is no point in getting it going. They are having a torrid time at the moment. There are many great communities around the country. I believe the Government should offer a minibus to the community council or parish council in every area on the basis of an interest-free loan with no vehicle registration tax and no VAT. We should do this not because the people involved are looking for handouts but as a means of providing a level playing pitch. We could go out the gates of Leinster House this minute and jump on bus or Luas or into a taxi, but people in rural areas do not have such facilities. If we look at the possibility of losing in the bigger scheme of things, we will see that it involves businesses closing. My proposal would cost a small amount of money in that context.

When we talk about carbon, we have to address issues like fuel poverty that have been mentioned by Mr. Boland. It has been suggested that there should be a citizens' assembly for the Lord Mayor of Dublin, but I believe that groups like Age Action Ireland, people like the witnesses who are present today and members of the farming and business communities should be represented at a rural assembly which would consider the issues that are affecting rural Ireland. Farmers are getting hammered day in, day out. They are nearly being told that they are polluters of the world. According to the figures that have been cited by Deputy Danny Healy-Rae, farmers account for a minuscule percentage of emissions. The farmers of this country, who are renowned for producing top-quality food, are nearly afraid to say they are farmers because they are being told they are destroying the world. People in this place need to stop kicking everyone who is producing anything. It seems to be a great train for people in the Dáil to jump on. People in the city and in the country, by our very nature, are going to affect something when we get up in the morning, even when we go to the toilet. We need to be clear on that.

I have met representatives of the credit unions and people like Mr. Boland in many different committees. I wonder whether committees will solve anything. As Deputy Penrose pointed out earlier, there is no point in not pulling with the public banking model. The other banks have absconded from rural Ireland and that is it. If we look at the history of credit unions, and I can be corrected if I am wrong, we will see that in the big, bad world of many years ago, when things were going bad, something like €250 million would have had to be put aside. We were told that it would be a bad day. The Irish people are still paying for €65 million that was parked in the main banking sector and used. If I am right, just €25 million was used in the credit union sector. It might not even have been that much. I stand to be corrected in that regard. This shows that the credit unions were doing things fairly right. As Deputy Penrose has pointed out, at one stage some of the RTÉ correspondents were mad to show that nearly everyone should withdraw their money from the credit unions because certain things were going to happen. The proof is in the pudding in terms of what has gone on.

I would like to set out the reality for someone who is in business. I do an awful lot of dealing with the local credit union. At the moment, a person might be buying a house, a piece or land or a bit of machinery. I remind the committee that one can get leasing. As Deputy Penrose has pointed out, some credit unions have things at 5%, 8% or 9%. That is too dear, to be honest. If the credit unions are to compete with the banking model, it needs to be between 3% and 4%, in my opinion. I am being quite blunt about it. A person will get small loans, but he or she will not get the bigger loans unless that person whips himself or herself into line. I suggest that this can be attributed to the regulations that have been imposed on the credit unions. The witnesses can correct me if I am wrong in my understanding that all of this is down to the way the credit unions are being screwed. I believe that credit union money was keeping the main pillar banks going. The credit unions were not allowed to spend it. They had €17 billion or €18 billion, but they had to put a quarter of it into A1-rated banks. We had no A1-rated banks, even though we pretended we had. The credit unions do not have a clearance system that the Minister can sign, along the lines of the system used for clearing money or cheques with the main banks. I know the credit unions were blocked from that a few years ago. A Minister can change that. That is one thing. The second thing is that a cards system is needed. I will explain the third thing. No one is saying €50,000 is no good. If I am in business and I am given €100,000 by a credit union to buy a field, the ratios that apply to credit unions mean that the credit union in question will need a certain number of other people to take out loans of €5,000, €6,000 or €10,000. That will not work. I would love people to do all their business with credit unions.

I will mention another thing on which credit unions need to concentrate in the context of rural Ireland. Deputy Eugene Murphy is well aware of a problem that exists at the moment. I would say he would agree with me in this regard. In some parts of this country, people with big single farm payments are coming from other parts of the country to buy up tracts of land. They can do this because the pillar banks are giving them the money to do so on the basis of their turnover. There are two parts to this matter. If we are going to keep rural Ireland, and if the credit unions want to stay in business, there will need to be people in rural Ireland. If small farmers with small single farm payments are being blown out because they cannot buy certain tracts of land, I believe a type of financial system that is backed up by the Government is needed. Deputy Penrose will recall the era of the Land Commission. I am not saying we have to bring that back in the same way. If there are 30 acres for sale and three small farmers want to buy ten acres each, they need to be heard when they go into the credit union. If someone with a single farm payment worth €100,000 goes into one of the pillar banks, and so does Johnny the farmer who has a single farm payment worth €5,000, it is easy to know who will get the money. The credit unions need to get more involved in this kind of lending. I appreciate that they have come on in leaps and bounds.

I would like to propose something here. I have seen the witnesses who are present today going from committee to committee. They are punching as hard as they can. I accept that there are things they can change. The Government has said that we do not need a new public bank. We need to get to the nail of this and see why not. I would like this committee to bring in the likes of the Central Bank. I do not know whether we can do this. Deputy Penrose and the Chair will tell me whether we can. Someone from the Central Bank should be brought in here to tell us why people in rural Ireland are being screwed because of regulations that have been imposed on the credit unions. I think that needs to be done. We need to bring in the likes of the Strategic Banking Corporation of Ireland to get it involved in all of this. The Department should be involved too. In fairness to guys like the representatives of Irish Rural Link, the community banking sector and the credit unions, for the past year they have been going around making proposals and submissions to every committee and to everyone here and there, but nothing has been happening. It is a question of "same story, different day". People soon get tired of knocking on the wall when nothing is happening. Sooner or later, the witnesses will say "to hell with them, they are not even worth going up to". They will be right to do so, in light of the way things have gone.

I believe the credit unions, along with the public banking sector, have to be the new banks in every part of the rural economy. In fairness to the credit unions, they open and provide their facilities in small villages on Sunday mornings or Saturday evenings. I advise the credit unions not to fly away from those locations if they get more services. To be honest, the credit unions need to offer what others are offering. I am saying this as someone who is in business. If I want to buy a tractor in the morning, I am looking at €70,000 or €80,000. Deputy Penrose has described them as monstrous machines, but unfortunately they have to be big to get through the work. A leasing company will do it over seven years. This facility is not made available to credit unions. The interest rates are different. If I want to buy a bit of land, I need the money over ten or 15 years.

No one can do it in five years. Even if the rate is 5%, we need a facility. A rate of 9% will not work. One will lose the business over that. If everyone here went into a credit union, one or two of us might be lucky enough to get a loan if we were at the beginning. Regulations on the credit unions mean they cannot do it. That has to be changed. I understand that it is for the Central Bank to change. It is like pulling teeth from the Central Bank to get anything done.

I have a question for Mr. Charles Murphy. I have a vision for credit unions. They started off locally everywhere and were set up by great people. That local aspect needs to be kept. We need to be able to keep that and still call it Joe Bloggs' credit union, but to move to where we need to, we need to have them more together so there is a bigger pot of money and a person can borrow more. How do we achieve that in the credit union movement, to get that message across to people, still calling it the local credit union while getting a bigger pot, whether for Roscommon, Galway or Dublin? I noted from what Mr. Ed Farrell said that the witnesses are being careful they do not move like the banks, as Deputy Penrose said. In the past, a person went into a bank and talked to a bank manager who brought him or her into a room, and that person either got a loan or did not. That person now has to do most of it by email and ring someone. If he or she then talks to the local bank manager, that manager will say they will fill something out and send it to Dublin. Someone will then ring from Dublin who does not have an iota about how a person was through his or her life and who does not give a damn about that person, because the person is only a digit.

Mr. Farrell talked about credit unions and bigger loans. As many decisions as possible need to be made locally. He said they could go down nearly the same road as the bank. I sound a note of caution on that. There are criteria that anyone has to meet. We should not go that distance and end up like the banks. I propose to the committee that someone from the Strategic Banking Corporation of Ireland, SBCI, the Department or the Central Bank should attend. I do not care which. We will go nowhere if we do not get different groups into a room here. We will not say we will solve it here. The Minister for Finance has a lot to do with this too. We need to chisel it out to see if we are on a run or not. If we are not, we do not need to be wasting these people's time.