Catherine Byrne (Dublin South Central, Fine Gael)

I thank the Acting Chairman.

During these difficult economic times, when people are finding themselves in situations they never imagined, such as being unemployed, fighting to keep their homes or struggling to survive on social welfare benefits, hope and optimism is what keeps everyone going. One hopes the Government will do everything in its power to help this country climb out of recession. One hopes that those who got us into this mess will be brought to justice and one hopes the mistakes of the past will never be repeated. However, the Government's proposed National Asset Management Agency fills me not with hope but with dread.

I have tried hard to make sense of what has happened in Ireland in recent years and of how the Government plans to rescue the economy. However, it now is clear to me that NAMA is not the answer. It simply constitutes another example of the Government's mismanagement, which will have serious consequences for all. It is beyond belief that the Government intends to pay €54 billion for €77 billion worth of toxic loans, which actually is €7 billion more than they are worth, in the hope of making a good return. NAMA will be greatly dependent on the property market bouncing back but there is no guarantee this will work and there are no guarantees that NAMA will not bankrupt the country. NAMA is a huge gamble on the part of the Government and the taxpayer will be obliged to foot a bill that is the equivalent of €34,000 for each household. This is the reason I cannot and will not support NAMA.

When the present Government was formed in 2007, the future looked quite bright for Ireland. However we became greedy and many people lived beyond their means. When the global downturn struck, people were not equipped to deal with it. There were no provisions for a rainy day, no savings in the coffers and no way back from gross overspending and investment in bricks and mortar. Although the property bubble carried us a long way, it then burst and left thousands of people with homes they could not afford and mortgages they could not pay back.

I am genuinely saddened that so many young people who stepped excitedly onto the property ladder now struggle with huge mortgage repayments on homes that are in negative equity. People were bombarded by the banks offering 100% mortgages and overdrafts and it seemed as though money really grew on trees. We now have one of the highest proportions of mortgage debt in the euro zone. During the years of the Celtic tiger, property prices rose continually and houses sold at hugely inflated prices. Although deep down we knew this would never be sustainable, that was ignored and suddenly it was all over. Thousands have lost their jobs and now rely on social welfare benefits or seek help from the Money Advice and Budgeting Service, MABS, or the Society of St. Vincent de Paul.

Recent figures show that 27% of MABS clients are experiencing problems in making their mortgage payments, which constitutes an increase from a figure of 18% in 2006. Many also are finding it hard to repay personal loans, credit card bills and even household bills. The Society of St. Vincent de Paul, which has a long and proud tradition in Ireland of helping those in need, faces new challenges in helping individuals and families who are sinking beneath heavy debts. In many cases, it also is helping people who are struggling with depression and suicide brought on by the stress and fear of losing their homes or being unable to survive financially. In the face of the current unemployment rate of 12.6%, many people face difficult times and for them there is no easy way out. They will carry the burden of huge debt for many years. Moreover, for those who simply cannot meet their mortgage repayments, repossession is a real fear. Repossession orders rose by more than 100% last year and the banks now have thousands of repossessed properties on their books of which they cannot rid themselves. Common sense is called for in respect of this problem. As the banks know they will be unable to sell these repossessed properties, they should consider allowing young people to remain in their homes and renegotiating proper terms with them. Perhaps their customers could pay the interest only for a while or perhaps the term of the loans could be extended. This would mean fewer repossessions and still would generate some revenue for the banks. Taking people to court or sending them to prison because they owe money is not an appropriate option and one cannot draw blood from a stone. For those whose homes are repossessed, few options exist. Social housing has dried up as waiting lists for council housing are very lengthy and homelessness now is a real possibility for some of those affected. This is all the more difficult to stomach because thousands of apartments and houses, which were built nationwide in the past ten years on foot of the economic boom, now lie empty.

I understand the Department of the Environment, Heritage and Local Government recently announced an initiative to hand over 3,700 affordable housing units to local authorities to address the need for social housing and in theory I welcome this step. However, it is vital that those who are most in need and who have been waiting longest will be housed as a priority.

The rent supplement scheme should also be overhauled to address housing needs. Some 91,000 people receive rent supplement. Last year the Government paid approximately €400 million on rent supplement to landlords across the country. If tenants were housed under voluntary housing or local authority housing schemes it would save the State millions and the standard of accommodation would be better. Many private properties in this scheme are in a terrible state and the taxpayer is funding them.

Meanwhile, NAMA proposes to bail out almost 2,000 of the biggest business people in the country and the Irish taxpayer will carry the risk. I cannot understand how the Government defends such reckless behaviour. The country desperately needs strong and visionary leadership but, if the past few days are anything to go by, this is a long way off.

We badly need to get credit flowing to keep the country afloat. It is beyond belief that a small business cannot borrow €10,000. It is almost impossible to secure a loan from a bank. How can we expect small and medium sized businesses to survive in this climate? Each day I meet many people working in the local shops struggling to keep the doors open and to keep people employed locally. Why do we not turn our attention to the post offices? They are as stable as anything else in this country. Perhaps we could examine some way of providing small loans to businesses to keep them afloat.

The Minister of State referred to Fine Gael's good bank approach. I have read this policy and have listened carefully to the Fine Gael spokesperson, Deputy Richard Bruton. It is beyond belief that today we realise that NAMA is the only option in this country. Fine Gael has an alternative and the Minister should take this on board. NAMA is wrong for the country and for the many people who have suffered greatly, not through their fault but because of the reckless spending of this Government.

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