P J Sheehan (Cork South West, Fine Gael)

It is difficult to follow Deputy Flynn given her vast experience of banking systems and finances. I will preface my remarks by noting that NAMA is manna from heaven for the banks. This is the most expensive Bill that the taxpayer may ever have to face. There is a crisis and we are being forced to bail out the banking institutions once again but what about the people who are sunk up to their necks in debt by borrowing from these very same banks? Such people were offered loans of up to 110% from banks to purchase their homes at exorbitant prices. The banks have been the architects of their own misfortune and we should not be bailing them out unless they give a guarantee that they will bail out the common people of Ireland who are up to their necks in debt by promising not to acquire their homes or put them out on the roadside.

We are here today because the proper controls and safeguards were not in place. I blame the Governments that have been in power since 1997 for following the market like sheep instead of providing leadership and good governance. At times they even added fuel to the fire of greed. In 1997, the economy was sound and strong. The volume of exports, which in 1997 was growing at 17% has collapsed to nearly zero. Under the Fine Gael-Labour Government productivity was growing at 8% per annum but it has now collapsed to negative figures. Our market share increased by 25% in four years but this Government has cut it back by over 20% in a similar period.

It is said that money is the root of all evil. All the recent scandals involved other people's moneys. It is well known that finance has been the cause of trouble since Adam was a boy. Did our Lord not put the money lenders out of the temple because they were extracting money from the poor people of that age? In nearly all the recent controversies it has been the handling of other people's money that has caused problems whether they be among taxpayers, bankers, developers, Ministers, officeholders, stockbrokers, shareholders, bondholders, savers or solicitors. Should I not state that the mishandling of this money put us where we are today?

The Minister for Finance may claim to have the misfortune to take up office at the wrong time but he also has the misfortune that the person partly responsible for this mess is now his boss. The nub of the problem is that the Minister can never be too hard on the banks. They remind me of smokers. Regardless of how much they are taxed or curtailed, they continue their habits. I understand the number of smokers has increased.

We do not have the Mafia in Ireland but the banks are one of the largest of the groups involved in criminal behaviour. They have run rings around every measure the Government has introduced since it came to power in 1997. Do I have to remind Deputies of the DIRT inquiry involving every strand of banking in Ireland, the Faldor scandal involving tax evasion by senior executives in AIB, the ever recurring overcharging by all the banks on every type of transaction, the Cayman Islands accounts, the bank directors loans, the resignations of numerous senior executives and the scandal in National Irish Bank? While researching this subject, I was not surprised to come across an example not from the last century but from the one before that. In 1885 the Munster Bank failed due to mismanagement and fraud and was liquidated. Out of the ashes, however, the Munster and Leinster Bank commenced operations. Eventually, it became the largest of the three banks. I have never understood the difference between the person in a suit who robs one's money and the person who robs one's money in the street or from one's home or business. The public does not understand either, but they are asking why there is no one in jail for all of these offences. With this in mind, I note that at a meeting of the Dublin Bar solicitors last week a question was raised as to whether solicitors should continue to hold client moneys, and it was stated that accountants do not and there have been very few irregularities in the accountancy sector. We need to introduce legislation in this area as soon as possible. We then need to introduce new comprehensive legislation governing the use of other people's money, whether by bankers, stockbrokers, Ministers or whoever.

This legislation must provide stiff penalties for those who break the rules. They must be tried like ordinary criminals and there should not be a delay because of other inquires, commissions or regulatory authorities. The bank robber does not get these get-out-of-jail cards and the person on the other side of the counter should not either. The main deterrent to committing crime is the prospect of getting caught and if we increase the chances of, and penalties for, getting caught, we will reduce the possibility of crime.

I also note the complete absence of involvement in these scandals by one segment of Irish society, amounting to more than half the population, namely, women. In noting that women must pay the price being extracted from the taxpayers for these crimes, I encourage the Minister to ensure that there are many more women involved at the very top of all of our financial institutions.

This Government has a long way to go to make amends for its bad government over the past 12 years and the taxpayer still must take his or her piece of flesh for its incompetence. The sooner the Government is gone the better it will be for all the citizens of this country who must pay a massive penalty for its bad government.

I want to put on record that the IFA is concerned that the proposed 80% rate of capital gains tax on the disposal of rezoned land will have major negative consequences for farmers and for the rural economy for the following reasons. It is an attack on the right to free sale of private property and may drive sales of farm land into the black economy. It is an inequitable imposition on farmers who intend to stay farming but have land rezoned by State or local authorities. It will strongly discourage disposal of land and thus will stifle development in rural Ireland. It is viewed by farmers as a political over-reaction to national economic and financial problems not caused by farmers, but farmers will be the main victims of this decision. Because windfall gains are much more a feature of the recent past than the immediate future, and because a tax rate of 80% is likely to discourage disposals, such a tax will yield very little to the Exchequer.

While recognising that there is a precedent from the 1980s for a somewhat higher rate of capital gains tax on disposal of development land, the differential in the rate was 20%. The Minister's proposal involves a differential of 55% over the normal rate of capital gains tax. Tax rates as high as 80% are generally viewed as extremely regressive and distortionary.

Before we give carte blanche to the banks on NAMA we must get a guarantee from them that they will not impose the repossession of homes on ordinary men and women who have excessive loans. Give the ordinary people of this country a chance and do not bolster up the vast empires of banking institutions.

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