Billy Timmins (Wicklow, Fine Gael)

Fine Gael's policy on solving the banking crisis is based on doing what is best for this country. It was formulated long before the draft legislation on NAMA was published and is well thought out. We believe it will work, unlike the Government's policy. However, our spokesperson is willing to engage with the Government and put forward amendments on Committee Stage.

Even at this late stage, we call on the Government to halt. We want this because we do not have confidence in the Government's model. We do not know its potential cost. A valuation has been put on land that is widely disputed by many experts. Deputy Hayes outlined how Irish Life decreased its valuation on several properties. We do not believe we have reached the bottom. In particular, we do not believe there will be a 10% increase in property prices over the next ten years because there is no evidence to suggest that will be the case. We also believe it is inherently unfair that the taxpayer, who is suffering as a result of the recession and the bad management of the public finances and the banking crisis, has now been asked to pick up the tab for any potential losses into the future. We believe the loss should lie with the shareholder and the bondholder.

Equally important, there is no certainty that money will be loaned back into the economy. The advantage of the Fine Gael model was to have the good bank, the bad bank, the national recovery bank. By the end of October we might have had a national recovery bank set up which would have loaned money back into the economy. We see what is happening across the water. The Prime Minister, Gordon Brown, is urging banks to lend to business. Banks will not lend into a recession unless there is legislation or regulation included in the policy that will make them do so. Utterances and pleas from Government will not make them lend back into the economy. Meanwhile, we have several small businesses that are starved of cash, many of which are viable.

I shall outline again how our policy would have made the shareholder and the bondholder responsible. It is not a case of reneging on a national debt. Whether they are from Kiltimagh or Khartoum, people who invest in banks realise they are taking a chance. If it works out, they get the fruits of their investment; if it fails they pick up the cost. That is what investment is about. We cannot see the basis for the valuation of €44 billion, which, when €7 billion is added, comes to €54 billion. That figure was called an estimate in recent times by the Government.

There is no mechanism in place to ensure the banks will give back the money, which is one of the biggest flaws in the current system. The IMF has pointed out how Government-managed asset companies have been largely ineffective due to political and legal constraints. We all know there will be political and legal restraints regarding the proposal and model the Government is setting up. The Irish economy needs a functional bank system to assist our economy in recovering.

When the recapitalisation and investment money is given over to the banks, it will have come from the taxpayers. They are writing this cheque. Banks will use that money to pay off their own liabilities to other banks and international money markets and will not lend to Irish business. Unfortunately, if we go ahead with this legislation without having amended it as we in Fine Gael wish, we will be back in this Chamber time and time again over the coming years, decrying the fact that Irish business has no access to funding.

Deputy O'Keeffe mentioned that nobody shouted "Stop!" during the boom. During the allocation of funding for social housing some years ago I remember pointing out that it was incorrect to be putting money into it because doing so was fuelling the property boom. I called on the then Minister, Deputy Dick Roche, to put the money into infrastructural projects. We all bought into the Celtic tiger and got our pound of flesh. We were happy to spend, spend, spend and not think about tomorrow. However, there is an onus on the Government to manage the economy. We can blame the bankers and regulators but, ultimately, the Government, the Minister for Finance and the Taoiseach are the guardians of the public purse.

In his speech, the Minister mentioned the concept of a windfall tax of 80%. I do not know how he envisages this happening. Will it apply to currently zoned land or land that may be zoned in the future? Will it apply only to land that will be newly zoned from here on in, or from a particular date such as the date of the passing of the legislation? It is my guesstimate that no land will be zoned in Ireland over the next ten to 15 years, other than some in the immediate city centre areas of Dublin and Cork, because there will be no demand for it. In the next few years we will see bulldozers going into the Leitrims, Longfords and Laoises to knock down houses because there will be no demand for them. Will NAMA be subject to the windfall tax if it acquires such properties and disposes of them? Will the Minister outline in his summing up speech the amendments that have been published before Second Stage is finished? I refer to land that is taken under compulsory purchase order from individuals. Will this be subject to a windfall tax?

The concept of a community dividend was mentioned. We all like the idea of parks and land being given to community projects but I am firmly of the view that if it goes ahead in this form or any other, NAMA should not include a community dividend. Its objectives will be difficult enough to achieve without muddying the waters further. It would also be an easy opt out for whatever authority is established to recoup the money. A community dividend would be an opportunity to let the agency or company off the hook. There should be no community dividend because land will cheap enough to purchase for community projects.

There have been calls for a banking inquiry-----

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