Denis Naughten (Roscommon-South Leitrim, Fine Gael)

I wish to share time with Deputies O'Dowd, Clune and Hayes.

The Minister for Social and Family Affairs forgot to say that the Government has decided to change the calendar and abolish Christmas altogether as a result of the changes in the social welfare payments.

I welcome the opportunity to speak on this budget. It is a compulsive gambler's budget. The Minister for Finance is prepared to bet his mortgage on odds as crazy as the Leitrim hurling team beating Kilkenny by 12 points in the All-Ireland final. There is a chance that it might actually happen and if so he would abolish all the losses he made as a gambler over the previous six or seven years but only a crazy man would place such a bet. Sadly, the Minister has placed this crazy bet in respect of the €90 billion bank bail-out scheme which is a ticking time bomb for our economy.

The Minister plans to create the national asset management agency, to purchase what he claims are toxic assets from bank portfolios. The Irish banking crisis, however, is different from any of the other crises plaguing financial markets in other parts of the world and requires a different solution. The assets in Irish banks are not toxic, they are rotten loans based on a property sector that has collapsed. An example of a toxic asset might be a €50 million development of a 140 home housing development in Lucan. On average, approximately 10% of those owner-occupied mortgages may default over the period of that loan. The figure may be higher or lower but it is a toxic asset because one cannot get its value. A rotten loan might be a seven acre site on the edge of Carrick-on-Shannon or Longford, two miles from the town centre, with zoning but no planning permission, for which the developer paid €50 million but has gone bankrupt. Nothing will ever come of that. The assets that the Government is talking about are those rotten loans that have no intrinsic value. Land prices continue to fall and these assets will never turn into any value.

At the same time we are mortgaging our future and that of our children to the tune of €21.4 million for every man, woman and child in the country, based on the Minister's projections yesterday. The Minister outlines a point about toxic assets, such as those in the United States, comprising a mix of good and bad mortgages, the assets in this country are not a mix of good and bad but are rotten debt. The owner of that debt purchased those assets, with the encouragement of the banks giving maybe a 100% loan for which the only security is the site. Those assets are worthless. One cannot put any value on them.

It would be well and good if the State were to take them over without any payment but that will not benefit the banks which need access to capital. The bank portfolios here were far too focused on the property sector. A total of 75% of the AIB and 80% of the Anglo Irish Bank loan books were based on property. There was a significant concentration on the property market here which has collapsed. The State is going to buy those assets and hope against all hope that at some future date we will have another property boom like that we had in 2006. I do not believe that will happen any time soon. The taxpayer will end up footing the bill as a result.

This morning the Taoiseach said if we are not able to capitalise those assets we will place a levy on the banks. However that levy will be paid by the banking customers, small businesses in this country which will have to pay a double tax: first, the levies the Government introduced yesterday; and second, the additional levy that will be placed on the banks to pay for the gamble the Minister has proposed. It is clear from the equity markets this morning that they do not believe it is the solution to the problem. Bank of Ireland's value has collapsed by 31.6% in morning trading and Anglo Irish Bank's by 33.6%.

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