Mattie McGrath (Tipperary South, Fianna Fail)

I was concerned about the major risk that we as a Government are taking on, and shared the concerns of every citizen in Ireland. Many of us did not and still do not understand how NAMA will work and are worried about whether it will work out. I was obliged to raise these concerns on behalf of my constituents recently. I am pleased the Minister took steps to make his proposed legislation available to all concerned so it could be considered during the summer period. This gave everyone the opportunity to suggest amendments. I am even more pleased he has taken into consideration many of the amendments and ideas that have been put to him. I remind my colleagues across the House that two of Fine Gael's former leaders who have major respect in economic circles - former Taoiseach Dr. Garret FitzGerald and former party leader Mr. Alan Dukes - have been honest about the situation, and I compliment them on that.

One thing is certain: we must all pull together for the sake of future generations. We must ensure we are taking the best possible steps to help our economic recovery and that we do not burden our children with high levels of debt that could have been avoided. There has been much talk about NAMA over the past nine or ten months and, regrettably, when people hear the name they think of a bailout of bankers and developers. Unfortunately, they are asking where the bailouts were when they got into difficulties. They are asking where the Government was to help them keep their businesses open or repay their mortgages so they could stay in their homes. We cannot blame families and businesses for asking these questions.

I am not an economist but I welcome the fact that NAMA has been endorsed by the ECB and the IMF. If NAMA is the best option, there are a few more steps we must take. I welcome many of the new provisions in the Bill, of which many are vital. I welcome the fact that the banks will share a large portion of the risk associated with NAMA. One of the major fears expressed by many of my constituents is that the banks will be given the bonds but money will not be passed on to individuals or businesses. Many people fear the banks will use these bonds to increase their profits again and that there will be no credit flow for small businesses or young couples who want to set up their own homes. Such young couples are in many instances unable to get mortgages to build their houses even though they have secure employment. We must ensure that no family home is repossessed. As I said on other legislation recently, one's home is one's castle. The family home must be protected and no family should be put out of their primary place of residence. It is a different story if they own two, ten or 20 houses.

People cannot be blamed for having such opinions of the banks given the disgraceful behaviour of our banking institutions in recent years. Saying they were disgraceful is a mild way of putting it. The banks must work with NAMA but they must also ensure credit flows to the economy, especially to small businesses, as credit is not currently flowing to businesses and there are no mortgages for young couples. Many small businesses have already shut their doors and others are struggling to hold on. I mentioned the delay in getting our economy moving again. If NAMA is to work, cash must start to flow as a matter of urgency. There is no point in codding ourselves. We know on all sides of the House that the money is not being released by the banks.

When I speak of getting money flowing I do not mean reigniting the credit bubble and re-entering the madness. I am talking about legitimate lending to the business people who have worked so hard over the years to ensure good credit ratings and who are now being starved of cash. I know many such businesses as I am a small businessman. They have built up modest overdrafts over many years of good working relations with the banks, and it is shameful that many banking institutions have now removed those overdrafts, which were never defaulted on or seldom used. I know of business people who when they received large cheques for which they had waited a long time had those cheques used by the banks to pay off their overdraft when they lodged them to the bank to meet commitments they had made, which is outrageous. I also know of small businesses that have had their overdrafts withdrawn even though they have never failed to pay a debt.

Are we guaranteed that the banks will start to lend to small businesses again? While I welcome the risk equalisation which gives banks the incentive to work with NAMA, does it address this issue? We must earmark a particular percentage of funding for small and medium sized businesses. We must guarantee that possibly 20% of the funding made available to the banks will be returned to small businesses. We must set the banks a limit otherwise this will not happen.

Many small businesses supplied materials, products or services to developers to complete their developments. Many of these developments are now unfinished and are not saleable and the developers concerned are experiencing difficulties. If they are taken under the control of NAMA what will happen to the sub-contractors, many of whom had to pay for materials and to pay their employees? They are now left holding bad debts and cannot obtain funding from anywhere, resulting in their going into liquidation. If these developments are taken under the control of NAMA, who will be responsible for the payment of these debts? Will it be NAMA or the developer? If they remain with the developer, how will the debt be met if NAMA owns the development? There is a great deal of clarification required in this regard.

We must explore the option of having NAMA pay the small businesses the money they are owed in respect of the developments it is taking over? Rather than NAMA paying the bank the full sum it should pay the small businesses a portion of what they are owed? This would ensure that the cash starved businesses can continue to get by and will act as their source of sustenance going forward.

Confidence must be restored in our economy and small businesses must be supported. They need to be allowed to continue trading. Many of these small businesses which are the backbone of Irish society have not asked for bailouts or hand-outs and have never received any. All they want is to be able to carry on trading and to be paid for their services so they in turn can pay their employees, support their families and pay their rates and taxes as before. This would help to keep the economy moving in every county.

I was pleased to hear the Minister for Finance, Deputy Lenihan, stress during the summer that we will not bail out the developers, those who profited in the good times and those who could afford to take risks and that many of the developments concerned will end up as social housing. I am a risk-taker. It is said that to be in politics one must be a risk-taker. Nevertheless, I am also a businessman and I understand what is involved when one takes risks. I am not suggesting we should stifle everybody who took risks. However, we should go after the greedy people who went too far and stretched themselves beyond what any reasonable person could justify. I would like to see some social capital being invested in communities.

While I acknowledge that many of the developers are now struggling like the rest of us, it is important to stress that with risk comes responsibilities and consequences. Many developers and many of the bankers lost the run of themselves. They wanted to make as much as they could and must have left their consciences at home when they made many of their decisions. Many of them were, unfortunately, driven by greed.

What went on in the banking system in recent years is nothing short of deplorable. People are angry because they are being made to pay for the mistakes of others and, more important, for the "greed" of others. They are angry that their vital services are being cut on a daily basis, that their future is uncertain and at the way we as a Government allowed this to happen and are tackling this problem.

The bankers and developers involved in actions that were less than fully and morally right must pay for them and must repay their loans. I am pleased to hear that all borrowers will be pursued by NAMA for their debts. I am pleased, too, that the offices of the Garda Síochána and the Fraud Squad have been beefed up to investigate where wrongdoing took place. While I acknowledge that one is innocent until proven guilty and is entitled to due process, the heavy hand of the law must come down on those people who flagrantly violated the rules and regulations, that they must be brought before the courts, given due process and must pay the price if they are proved guilty. It is imperative that this point be stressed. Also, we need to set the public straight about NAMA and what it will do. It is not a bailout for developers and banks will not profit from it. Steps need to be taken to ensure that remaining businesses are kept alive.

We need to remove the thinking that NAMA is a bailout and must fully inform the public about what NAMA will do and how it will work. The media has a moral responsibility to state the facts about NAMA and to help instil some confidence in our economy again. As we all know - I am delighted to note Deputy P. J. Sheehan is nodding in agreement - confidence is at an all time low. There is still money in the country; we did not become paupers overnight. However, nobody has the confidence to invest in business here, businesses which would help to create much needed jobs.

Another issue of importance is NAMA's use of the development land which it will take under its control. NAMA will cost us a great deal of money and thus our services will suffer due to financial constraints. The Government may never again get access to land at low prices. Many communities have suffered from over-zoning and over development and any social capital gained should be invested in these communities. I compliment those planners, including those in my own county, who resisted the temptation to allow crazy rezoning of land. I, as a board member of the Irish Council of Social Housing, want that agency to be involved in taking over many of these unfinished or partly finished developments which could be used as social capital for the construction of community halls, resource centres or badly needed schools. Given so many builders and developers are now idle we could get value for money in respect of the work required. These lands and partly finished properties must be taken in charge and used for the greater good of our communities and all people who will be paying a price for NAMA but will never get anything from it.

We should earmark some of this development land for future infrastructural developments, which are badly needed. If NAMA is taking on some partially finished houses, will consideration be given to these houses being used for social housing? We must use this opportunity to obtain the best return for the taxpayer and our future. It is shocking that despite the Celtic tiger years more people are awaiting access to social housing and many more people are homeless. This is a sad indictment of all of us. We must put two and two together. We cannot forget about the little person who, even when NAMA succeeds, will not benefit. In taking this risk, we must ensure a valuable return for our society.

With regard to job creation, we need to do much more. Even with NAMA, new jobs are not guaranteed. Banks may start lending again but that does not guarantee new investment or job creation as businesses need time to recover. Earlier I congratulated the Minister, Deputy Lenihan. I now plead with him and the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Coughlan and their respective Departments to take every step they can to create new jobs and to support existing jobs. While I do not wish to revisit old stories, there are in this country, organisations like NAMA which are penalising businesses. While I accept that people must pay their taxes and rates, business people are crying out for some breathing space. They have never before failed to pay their taxes or rates and will not do so now. They need moratoriums and support. It is vital that we reshape our Departments to meet people's needs. We need more dynamic visionary Departments of State led by Ministers and top officials. We also need to obtain fresh thinking from outside the Departments to reinvigorate and drive our economic recovery. Irish business people will do this but they need some support. They must be allowed to do it in an environment where they are not shackled by the constraints laid down by bureaucratic quangos that are literally driving them out of business. While this economic downturn is difficult and uncomfortable, it is important for us as a nation to take a good look at ourselves and at how we do our business. We must restore confidence in ourselves, in our banking system and in how we appear to the outside world.

I pay tribute to the ordinary decent bank officials and public servants in these organisations who are on the receiving end of much of the public's agitation. They had no hand, act or part in the way things went sour. They were doing their jobs professionally. They were not at the higher echelons and should not be blamed for this. Sadly, greed was rife throughout the country in recent years and has made us suffer hugely. As individuals, as business people and as a Government we must bring some integrity back into how we carry out our transactions. We must ensure that our banking system is better regulated to ensure that actions like those of the golden circle will not happen again. We cannot allow such a situation to develop.

There must always be due process but there must be tougher action against crime. We see people who for small amounts of money are brought before the courts and imprisoned. They should be asked to make recompense in some other way, instead of sending them to jail where there is no room for those who should be there. The fraud squad and the Criminal Assets Bureau must be reinvigorated to deal with what has happened. John Citizen knows that if he cannot feed his family or pay college fees and he takes something out of necessity, he will pay the price and be prosecuted. The law of the land must be observed but it is unfair that only ordinary people are punished. The perception that only ordinary people are punished must be fully explored and dealt with otherwise it will continue. That perception is bad; it is unnerving and disquieting and must be eliminated. We should have a fair playing field where every family will be dealt with equally.

I will speak about other aspects of the golden circle later this evening in the debate on FÁS but this has been damaging to the body politic and to ordinary people who want to reinvest and get his country moving again. The people are willing to put their shoulder to the wheel but they must see fair play and leadership.

If there is one lesson to come from this recession, it must be that we return some honesty, integrity and trust into two of our most important institutions: our Government and our banks. Unless we instil some integrity, we will find ourselves in the same position in a few years' time.

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