Stephen Donnelly (Wicklow, Independent) | Oireachtas source

I move amendment No. 102:

In page 57, between lines 6 and 7, to insert the following:"(b) in the first three years post enactment of this Act, the maximum duration of a Debt Settlement Arrangement shall be limited to 36 months, after which, and on return to normality, the period should be increased again to 60 months;".

The Minister and I have discussed this previously. The objectives of these two amendments are job creation and economic growth. I broadly support the Bill but my concern is that while the periods for debt settlement and personal insolvency arrangements of five years and six years, respectively, are not unreasonable for a business-as-usual economy, we are dealing with a unique set of circumstances. A large number of people with unsustainable debts who would normally be highly economically productive are in their current circumstances almost entirely because of the bubble. If many of these people are subject to an arrangement covering five years or six years, they will be taken out of economic productivity in a very substantial way. If, for the next three years, people begin to move into this process and are not cleared out of it for six years, almost a decade will have elapsed by the end of it. Many entrepreneurs will be affected. Inevitably, some of those who took risks during the bubble will be trapped.

An interesting fact I heard recently is that the average age of founders of successful start-up companies in the United States is 39 years, which is probably the average age of those affected by the property collapse, unsustainable mortgages, job losses, and so on. With regard to those who have debts as a result of the collapse of the bubble, there is no moral hazard issue at all. None of those concerned will seriously consider borrowing again sums of money as great as those they borrowed during the bubble. For the sake of economic growth, existing household debt needs to be cleared as quickly as possible. Therefore, I propose that, for a limited period, the debt settlement and personal insolvency arrangement periods be no more than three years. The Minister referred to the United Kingdom several times and we talked about the value of the car and the debt relief notice. He was benchmarking against the United Kingdom. As he is well aware, the United Kingdom has a bankruptcy period of one year, potentially with an income attachment of two years. In this case, I would be more than happy to benchmark against the United Kingdom.

The amendments are important. If there were another way to address this matter, I would certainly urge the Minister and his team to consider it.

Asking people to go through a six-year period to clear existing debt represents a huge missed opportunity to clear out unsustainable household debt in the economy and begin driving job creation and economic growth.

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