Joan Burton (Dublin West, Labour)

I thank the Leas-Cheann Comhairle. This afternoon saw the formal publication in the Dáil of the revised NAMA business plan. In the context of this Fine Gael motion on the economy, the NAMA business plan is appalling news for taxpayers. It shows that, in the nine months since the draft business plan was published, the people in NAMA have revised their estimate of it making a profit of €4.8 billion over its life to a worst case scenario of losses of €800 million, a turnaround in nine months of more than €5 billion in extra losses. Clearly, the first NAMA draft plan was a fantasy. It is difficult to believe the revised plan except in so far as it means more pain and no gain for taxpayers.

While NAMA has transferred large bad assets from banks to the taxpayer, the banks, which have been the recipients of this largesse, are still effectively closed for credit. We have a credit famine for small and medium-sized enterprises, SMEs, and indigenous businesses that rely on the guaranteed banks. This alone is continuing to cost tens of thousands of jobs as small businesses yield to the inevitable and close up shop or reduce their employee numbers. Other SMEs never get off the starting blocks.

Today's business plan again confirms that Fianna Fáil in Government remains mesmerised by the banks and the developers and simply cannot turn its gaze or attention to the real economy, employment, job retention and job growth. Even in the best case scenario where NAMA recovers the long-term economic value of the assets plus 10%, the revised profit figure would be €3.9 billion, a drop of €1 billion. This scenario B, as set out in the plan, requires NAMA's assets to rise in value from their takeover values to 21%, representing 11% of an uplift plus 10% over the so-called long-term economic value. This is a highly unlikely scenario.

The business plan makes it clear that NAMA is definitely an asset management company and not a bad bank. Assets with a value of €81 billion are being acquired from the eligible institutions, those being, AIB, Bank of Ireland, Anglo Irish Bank and Irish Nationwide. Nine months ago, we were going to acquire assets worth only €77 billion. The House must bear in mind that we are taking no assets valued at less than €5 million, which will stay with the banks. Every scenario that this wretched Government comes up with regarding our economy is much worse than even it could have forecast. One might call it bad luck for the Taoiseach, but such a deterioration in a nine-month period is unbelievable.

According to a note on the first page of the new draft business plan, the State is to acquire derivate transactions with a nominal value of more than €14 billion. When I asked about these during the debate on NAMA, I was told not to worry my little head about them and that everything would be fine. We are now being told that a substantial number of these derivatives are non-performing and underwater. We are also told that NAMA will pay nil consideration for them. We will get non-performing derivatives for nothing, but what we do not know is what cost implications they and other acquired derivatives will have for taxpayers. That information does not even figure in the plan.

Almost everything about this plan is worse than was forecast. Far from NAMA loans "washing their face", as claimed by the Minister and his economic adviser in the debate, taxpayers will be left wiping egg off their faces from this rotten deal, which aims to bail out bankers and developers. We were told over and over that the good assets being transferred into NAMA would yield significant returns. When the bundle went to NAMA, there were to be good and bad assets. Some would be underwater, but others would be earning their keep. Today's report confirms that, at most, only 24% of loans are generating any income, that is, repayments or interest payments. In this climate, loans that are generating neither capital repayments nor interest payments are goners. This is reflected in the fact that some of the NAMA good assets were, for example, shopping centres. Retailers cannot pay the fantasy rents - based on upward-only rent reviews - that the developers want to charge for the banks in order to keep the property value of their non-performing shopping centres up for the purposes of NAMA. This is an exercise in smoke and mirrors and the only people being taken to the cleaners are ordinary citizens and taxpayers.

It is not clear what the floating rate on the NAMA bonds will be. One of the key assumptions used was that this would be at a low level, which was always likely to prove to be a fantasy in the long run. The European Central Bank, ECB, has set interest rates at an historically low level in order to pump money into real economies. We are pumping money into NAMA, the exact purpose for which the ECB's low interest stimulus package is not meant.

NAMA is coming in with expected administration costs, slightly behind those outlined in the draft business plan. This is about the only positive in what is a deeply depressing business plan. As a consequence of the plan and the extra €5 billion in losses to be loaded onto the taxpayer, the Government is redrawing the national development plan. Key road and rail projects are to be axed as the money for them runs out because we are transferring that money to NAMA. Technically, NAMA's debt burden is off the balance sheet, but it is on all of our shoulders. As a consequence, an extensive list of more than 30 road projects, not to mention Luas and metro projects, will not proceed. In September, little children starting school will pass through school gates. Although they will be skipping along, their parents might not be skipping behind them. If parents have problems repaying their mortgages, there will be no NAMA for them. There is not even an extension from one year to two years in the work-out period for mortgages in difficulty. Doing this would not be difficult, as it is only a framework to give people two years to try to recover their jobs and family incomes. However, it was not even mentioned in today's report.

To what do the boys and the girls walking into school together, aged four and a half or five and a half years, have to look forward? Their new schools will not be built. The roads from the motorway to their houses will not be improved. Most of all they will grow up burdened by the extraordinary level of debt the Government has placed not just on this generation, but on their one as they head to school next September. It is high time that this Administration left office and handed over to a new Government.

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