Eamon Gilmore (Dún Laoghaire, Labour)

The Taoiseach in his speech this morning said that there are three steps to economic recovery. He is wrong; there are four. He always keeps forgetting about and omitting the fourth. It is jobs, getting people back to work and addressing, through labour market measures, the needs of the people who have lost their jobs and who will lose jobs in the economy.

The Labour Party agrees that we need to get the Lisbon treaty passed on 2 October and that is the reason we are campaigning in favour of it. We will engage constructively on the debate that we will inevitably have about the public finances and what to do about them, although I suspect we may disagree about some of the measures that will have to be taken. We will be advocating a fairer way.

On the issue of what is needed to get the banks functioning again and lending to business, the Labour Party disagrees with the proposal that the Government has put forward on that issue. NAMA is the wrong fix for a crisis that should never have happened. It is a scheme to nationalise losses and privatise profits. It exposes the State and the taxpayer to unnecessary and excessive costs and risks. It will undermine the competitiveness of the Irish economy for years to come.

I need hardly remind the House of the importance of this Bill. The decision we are being asked to make on NAMA is enormous in respect of the quantum of resources. It will be enduring in terms of the impact it will have on the economy and the public finances and it will be irreversible in respect of any future Government. A decision, it appears, has been made by the Government to commit €54,000 million, that is 54 followed by nine zeros, deliberately overpaying for bad property loans. If the Minister's figures are right, that overpayment amounts to €7 billion, but only if the figures are right. No matter what the odds, it is a €54 billion bet. Are the figures right? There are aspects of these figures, presented by the Minister for Finance yesterday, that make me deeply uneasy. In his speech yesterday the Minister said the following about his view of where property prices are, and where they are likely to go. He said:

The fall in property prices has pushed up property yields. Yields are now above their long-term average, and this suggests that values are bottoming out.

The Taoiseach repeated that today when he said that "NAMA will have to achieve less than a 10% uplift over current market values on its assets over ten years to break even."

I was struck yesterday when I heard the Minister for Finance say that the assessment is that the market value of the loans is €47 billion. I asked myself from where did we get this market value and from where do we get the assumption that values will lift by 10% to 15%, which will give NAMA the return. We find in the green document that the Minister supplied us with that all of this is based on assumptions that are made about yields and about rents. I will tell the House a few facts about rents and where the Minister for Finance is wrong. There is a law on the Statute Book which provides that commercial rents cannot be reviewed downwards. I know the Taoiseach will say that the Government has changed that, but it has only changed it for future leases. Many retailers throughout this country who committed themselves to long leases in new shopping centres at the height of the property boom cannot get a downward revision on those rents because there is a law that provides that rents cannot be reviewed downward. That is the reason commercial rents are high.

Residential rents are still high because it is only in recent years that the Taoiseach's Government, at the behest of the Labour Party and also of Fine Gael, introduced legislation to regulate the private residential tenancies sector. Many of the tenancies are not registered with the new Private Residential Tenancies Board. At best the board has examined only a tiny minority of tenancies in terms of whether their rents are market value. I keep meeting people who are still paying the rent for their apartment or their home that they were paying three years ago at the height of the boom when those rents were driven up by high property prices and even the rents that have dropped have not dropped in line with the drop in property prices. The State is contributing to the high levels of rents we have. In the residential sector the State is paying through rent allowances a high rental subsidy for in region of 60,000 tenants and in addition to that, the State is a tenant.The State, for example, is paying approximately €60 million for office property rental, much of which will not be used because the decentralisation proposals are not going ahead. The Minister for Finance's entire house of cards, in terms of the market value of the properties - the €47 billion - and his assumptions about the 10% to 15% increase, is based on a rental sector, regime and yields that are not normal. All of the tables he produced comparing rental yields in Dublin to Rome and Oslo is not comparing like with like. It worries me that we have now got an approach to NAMA that is based on such a flimsy basis.

Then we have risk sharing. Last week was risk-sharing week. We were told a big victory had been won by the Green Party. What did we get in the Minister's statement? We were told that risk sharing would be 5% - as small as it could possibly be. The so-called risking sharing is no more than a puff of green smoke, a derisory concession to an ineffectual party whose only value now is the numbers that are required to keep Fianna Fáil in Government but who have sold both themselves and the public short.

The decision to establish NAMA is being made in the cold light of day. This is not like the night of the blanket guarantee, when the Government could at least claim that its profound errors were made in the face of fast-moving events. This decision is being made after the Government has had every opportunity to seek advice, and to seriously consider all of its options.

This is a moment when the Government could have achieved a unity of national purpose; when we could have come together to address the banking crisis in a manner that would gain support from across the political divide in a manner that would put the taxpayer first, but that opportunity too has been spurned. Instead, what we got from the Minister for Finance yesterday was an exercise in partisan bluff.

We have a decision that lines up perfectly with a long series of decisions during the property bubble and the housing crisis. It is another decision to put the interests of property developers and banks first, at the expense of the taxpayer. Every single decision – every U-turn, every twist in the tail – has put the banks first. The status quo has been protected, the taxpayer has been left to pick up the tab. After all that has happened, rather than moving to prevent another crisis of this kind, NAMA will preserve the very interests and structures that brought it about in the first place.

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