Catherine Murphy (Kildare North, Independent)

This motion was intended to place on the agenda a very serious issue with which many thousands of households and those in the wider community are faced. A generational issue arises in respect of this matter. Those who purchased at the top of the housing bubble have tended to be those in their mid-20s to mid-30s who were beginning to have families. It is they who are most in crisis. They are also seeking to cope with the consequences of huge personal debts in addition to their mortgage debts, and they are often trapped in inappropriate accommodation such as small apartments. Accommodation of this type might have been fine for individuals or couples. When babies arrive, however, as they have done in abundance in recent years, accommodation such as that to which I refer is inappropriate. It is also impossible for those in negative equity to get out of this type of accommodation. In conjunction with all this, we must deal with the problem of unfinished and ghost housing estates.

Entire housing estates and communities are struggling with the impact of the current crisis. It has too often been necessary for communities to put in place social supports in their areas. The mighty markets are not prepared to invest in such areas. There is a social cost to this problem which has not yet been calculated. For example, the matching funds for our so-called free education system will be impossible to deliver in areas where there is a concentration of mortgage debt and where there is no possibility of movement as a result of negative equity. Gone will be the ability to raise funds, run sporting clubs and other community organisations. Unfortunately, this is all very predictable.

The Law Reform Commission's report on personal debt management estimated a ratio of household debt to disposable income of 48% in 1995. This reached 176% in 2009. In the current economic climate, with almost 500,000 people unemployed and at a time when there are continual income shocks, the level of personal debt is simply not sustainable. In the section of its report on debt enforcement, the commission argues that a more holistic approach must be taken, with a minimum threshold of disposable income retained to sustain individuals and their dependants.

The commission is also seeking a debt management system to operate outside the courts system. Will its recommendation in this regard be implemented? If it is implemented, how quickly will this be done? If it is not forthcoming in the immediate future, the courts system will become clogged up as a result, as Deputy Luke 'Ming' Flanagan stated, of people being dragged through them.

It appears the only recommendations that have been introduced are at lender level. There is much to be done in the context of introducing new laws and ramping up the powers of the relevant agencies in order that we might have an adequate system which will give people a degree of certainty. It is interesting to note that when a person robs a bank or when a bank robs a nation, the legal bill falls to the taxpayer. When an individual faces proceedings which do not include imprisonment, however, there is no legal aid available to them. Will the Law Reform Commission's recommendation in this regard be implemented? If it is, will serious resources be invested in the free legal aid scheme? The position with regard to the money advice and budgeting service, MABS, is similar. There are recommendations that this should either be ramped up or transformed into a debt agency. When is that going to happen? Will MABS have the resources necessary to allow it to deal with the problem?

From the Central Bank's analysis, it appears that 45,000 mortgages have been rescheduled and that there is an overlap between these and the mortgages which are in arrears. The Central Bank estimates, therefore, that some 70,000 mortgages are either in arrears or have been rescheduled. The Cooney report into mortgage debt recommended a more equitable approach in respect of the mortgage interest supplement. We are all aware that there is a poverty trap in this area because if one person in the household is unemployed, then the supplement is not payable.

In the case of the deferred interest scheme, the real question will arise where a mortgage is deemed to be unsustainable and where a housing need still exists. The Cooney report states that in such cases the occupant should be eligible for a housing assessment. There is no point in carrying out such an assessment when there are no houses to be delivered. We are all aware of the position with regard to local authority housing lists. A large additional workload is going to be placed on local authorities without the provision of extra resources, even at administrative level. The sourcing of new houses under the rental accommodation scheme is hugely time consuming. The Department of the Environment, Community and Local Government must indicate how it is intended to deal with this matter.

We will be obliged to pay the cost for all of this because if people are evicted, they will have to be rehoused by the State because they will not be in a position to obtain new mortgages. Essentially, all we are doing is kicking the can down the road. Debt forgiveness is the only solution that will be available to some households. That is the challenge we must face up to.

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