Shane Ross (Dublin South, Independent) | Oireachtas source

The recognition of this problem, which was identified by the motion from Sinn Féin this evening, has been a long time coming. It is staggering that the Government, as Deputy Tóibín stated, has allowed this problem to double in size since it took office, sitting fiddling while the mortgage fire burned.

It was not only Fiona Muldoon who warned about this in November last. As recently as two weeks ago, the Governor of the Central Bank stated he was tearing his hair out at the failure of the banks to tackle this problem. By implication, he was also tearing his hair out at the failure of the Government to tackle this problem, because the two of them are colluding in allowing the banks to keep on their balance sheets house values that are unrealistic and, thereby, under provision for bad debts. We saw this previously in the case of the developers. This is only history repeating itself in another form because the mortgage arrears problem is simply the second pillar of the Irish debt problem. The first pillar is being tackled - admittedly, in a fairly haphazard way - but the second one has not really been tackled at all. The reason it is being tackled now is not that there is any great political will or courage. It is because there are stress tests down the line this year. The stress tests, in October, are quite likely to come to the conclusion, because of the Government's refusal to recognise the mortgage arrears problem, that the banks will need further recapitalising. If that happens, where is the money to come from? We see no answers other than piecemeal ones such as talk about split mortgages and the Personal Insolvency Act 2012, which does not have the capacity to sort out a problem of this size. That is why it is so important that we get a serious reply and seriously constructive suggestions from the Government for tackling this problem, which is out of hand and will get worse. When the property tax invoices come through letter boxes of at the end of May and the payment date for the tax arrives in July, borrowers will begin to regard mortgages as an optional extra. I predict that borrowers will look at their property tax bills and say that they cannot pay it but, because the Government is confiscating it through the Revenue Commissioners, they will take the other option and stop paying their mortgages.

The Government is not facing up to this problem and it must do so immediately. The result of its policy will be more recapitalisation and where the money is to come from will be an interesting question and one to which I would like to see an answer this evening.

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