Máire Hoctor (Tipperary North, Fianna Fail)

Táim an-bhuíoch don Chathaoirleach as ucht deis a thabhairt dom labhairt os comhair an Tí inniu faoin mBille stairiúil seo. I thank the Acting Chairman for the opportunity to address the House. This Bill has been raised by my constituents with such frequency in the past few weeks that it demonstrates their serious concern at the content of the legislation. I am certain we could not have anticipated 18 months ago the plans laid forth in this Bill, the global banking system having suffered its most serious upheaval in nearly a century. We in Ireland have been uniquely affected by the economic meltdown and we require unique measures to revive the economy here.

Like all the Deputies in the House, I have over the past number of months received many letters, e-mails and phone calls about NAMA. Many of the people who communicated with me were angry with the bankers and developers, and at the seemingly unchecked speculation and gambling, whereas, as they see it, the State has been left to foot the bill to clean up the mess which the private sector cannot or will not undertake itself. I fully understand and appreciate this anger. It is important for my constituents to know that I have heard their justifiable fury over the recklessness which has lead us to this juncture, particularly as a Fianna Fáil Deputy who supports the establishment of NAMA.

Unfortunately, indignation over the causes of the banking crisis, and with regard to where the responsibility firmly lies, does not amount to a policy to restore the banking system. In the simplest terms, the Minister's proposal is to create an agency with the commercial aim of realising and recovering loans on a mixture of lands and properties over an extended period of time. The aim is simply to free the banks of these loans so that they may release credit into the economy to enable commercial credit to flow once again. Over the next nine to ten months, NAMA will individually examine each of the loans it takes from the banks - performing and toxic; house and apartment; and for zoned, commercial and development land both in Ireland, the UK and beyond. The function of NAMA is to manage these loans and in time afford the properties the best exposure and secure the best price for the taxpayer. After all, this is all about the taxpayer.

This plan is not without risk. The amount of real equity share in some of the properties taken to be managed by NAMA and the projected rise in property prices over the next eight to ten years will be critical factors as the agency proceeds with its work. Nevertheless, because the agency proposes to take on performing and toxic loans on different varieties of development, commercial and residential property, the result will be a diverse property portfolio in which some properties and assets will realise more quickly than others. This should ensure that the Exchequer breaks even over the lifetime of NAMA and that the taxpayer does not carry the burden.

The past three months have seen positive news coming from France, Germany and the United States and, though it would be premature to say that the recession in those countries has passed, it has been cautiously predicted that a return to growth will occur in the second half of 2010. When recovery begins in the US and the euro zone, Ireland must be in a position to participate in business and to hit the ground running, and a functioning banking system will be an essential component of our economic recovery.

The banking system may have further hurdles to overcome and there is the possibility of further recapitalisations as well as bank mergers or takeovers, which may occur over the next year. Be that as it may, we cannot continue with ineffective banks. The reluctance to lend is strangling small enterprises and farmers everywhere. Individuals and businesses which have for decades enjoyed good standing in our high street commercial banks cannot now secure the credit lines which are utterly essential to continuing business operations. The NAMA proposal will fully address this while balancing the risk sharing element with a proportion of subordinated debt to offset any possible losses the agency may incur.

I take this opportunity to voice my concern at reports that farmers they may be hit by the so-called windfall tax rate of 80% on land zoned and acquired under CPO. As the House is aware, many farmers with lands adjacent to towns or along the routes of new major roads have had parts of their farms rezoned by local authorities for housing or bought by CPO for roadway development. In both cases, this happens outside the control of the landowners themselves. We need to draw a distinction in this legislation between the farmer who is selling his or her lands voluntarily for development and the farmer who has been informed that a council or the NRA is about to acquire a portion of his or her lands. It seems manifestly unfair to treat the two situations as one and the same. The proposed 80% windfall tax is extremely high and it makes it difficult if not impossible for farmers to realise the development value of lands which they may wish to sell for housing or for some other use.

Section 155 of the Bill allows the agency to compulsorily acquire property if it is deemed necessary but, essentially, this gives NAMA the power to acquire additional land by CPO where the purchase significantly increases the sale price of the land already held by the authority. Take, for example, the farmer who has land in his or her possession which has access to a development site owned by NAMA. That farmer then could be forced to sell this land to NAMA in order to maximise the value of the development site. While we would expect that every effort should be made by NAMA to reach agreement with the farmer on a price, if this was not reached by agreement, NAMA could then proceed to issue a CPO to the farmer, who would be subject to an enormous bill not of his or her making.

The 80% capital gains tax proposed in the legislation would no doubt discourage the sale of land in rural Ireland, which may prove an obstacle for future development of farming by new and young farmers who wish to succeed in the long term. This would also be the case for the town or city dweller who may have property in the pathway of, for example, the LUAS, and who, through no choice of his or her own, may have to surrender his or her property for the common good overall, but who at the same time may be subject to that 80% tax, which I believe is unfair. I urge the Minister to ensure that this heavy tax levy is drafted in legislation in such a way as to protect farmers, landowners or property owners who are subject to compulsory purchase orders.

I welcome the appointment of Mr. Patrick Honohan as the new governor of the Central Bank. I hope his appointment will help to restore trust in the banking system. In the course of our debates in this House on the NAMA legislation, it is both timely and appropriate to revisit the issue of regulation, corporate responsibility and checks and balances in the financial system in general. The National Asset Management Agency is being born out necessity caused by and in the aftermath of the recklessness engendered by lax regulatory oversight and sheer irresponsibility. I sincerely hope the new governor of the Central Bank and the Financial Regulator will scrutinise more closely the dealings of our banks in future. The people of Ireland are angered most by the practices and shortcuts that have made this legislation necessary.

I compliment the Minister, Deputy Brian Lenihan, his officials and the Attorney General on this legislation. It can be of no surprise to them that these measures are being watched closely in Europe and on the wider international stage. The reception of the National Asset Management Agency has been positive and the innovations to the general model well received.

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