Pearse Doherty (Donegal South West, Sinn Fein) | Oireachtas source

Cuirim fáilte roimh an deis labhairt ar an ábhar seo anocht, ábhar iontach tábhachtach, sóisialta agus eacnamaíochta ag baint leis an Stát seo.

I welcome the opportunity to discuss the issue. It is similar to the Private Members' motion tabled by Sinn Féin some weeks ago. It is an opportunity to look again at what is happening and the Government's approach to the mortgage crisis two years into its term. It is also important to offer the context to the debate. In fairness, this Government inherited a spiralling crisis that was not of its making. We must examine the last 18 months of Fianna Fáil in power. At the time, the number in arrears of over 90 days and more had increased dramatically. The numbers almost doubled in that 18 month period, but there were no plans and no initiatives from the party. There was pure panic and its head was in the sand. It sat on its hands bailing out bankers and banks and letting those who bought houses at the height of the crisis suffer the wrath of bankers.

We must look forward and examine the approach of the Government two years since taking office and ask whether it has done anything. The answer is that it has not. We have heard of the initiatives the Government has brought forward. Has this dealt with the severity of the crisis? No, it has not. It is not just me saying this - the statistics show the number of those in arrears of 90 days or more has doubled under the term of this Government. There are now more than 180,000 families in mortgage distress. Looking back at the programme for Government, both parties stated that more protection was needed for home owners with distressed mortgages and that a more radical approach was needed to protect families in fear of losing their homes. That is exactly where people are at and more families have fallen into that fear over the past 24 months despite the bluster from Fine Gael and Labour that the Government is tackling the crisis. The crisis is out of control and the measures brought forward by the Government have not been fit for purpose to deal with the scale and quantity of the crisis facing families the length and breadth of the State.

Every community, parish or town land has been affected by the mortgage crisis. Today, the CSO published figures showing that house prices have dropped 2.6% over the past year. Bad as it is for people struggling to pay their mortgages, they also see the value of the property diminishing while it is mortgaged to the hilt. Unbelievably, the people who cannot pay their mortgage, or those who go without essentials in order to make the mortgage payments, are faced with the response of the Government, which is more austerity, more taxes, more levies and more hardship.

What sticks in the craw more than most is the family home tax, a tax on the roof they cannot afford to keep over their heads anymore. On top of the misery of facing bankers and explaining they cannot afford the €400,000 mortgage, they must find the means in the family circle to pay the additional bill that has come through the door in the form of the family home tax. The family home tax is a complete breach of the Government's promise. I agree with the Taoiseach, Deputy Enda Kenny, that it is unfair to charge a repetitive tax on someone's home. That is why Sinn Féin published legislation to repeal the family home tax. If in government, Sinn Féin will bring that about.

Earlier this month, the Minister for Finance, Deputy Noonan, announced a new initiative to push the banks to deal seriously with the issue of mortgage distress.

Everybody in this House hopes it is successful but I have my doubts, which are well-founded. We only have to look at what the banks have done not over the past five years but over the past two years. They have basically made the crisis worse because they put the squeeze on homeowners and failed to face the reality that people will not be able to pay back the magnitude of debts they have on their homes. They failed to allow for write-downs of those debts, despite being recapitalised by the taxpayers to provide for such write-downs. What they have done instead is they have ramped up variable interest rates, which has put further pressure on these same families.

What is needed is not the veto contained in the Personal Insolvency Act. What is needed is not simply targets and a watchful eye from the Central Bank of Ireland. What is needed is a proper solution to this crisis once and for all. We cannot wait two years, which the Government's plan indicates, when solutions will be offered to all of those in mortgage distress. What we need is action now.

The only way to do that is to establish an independent arbitration agency which can force settlements above the heads of the banks. That group of people, or panel, needs to have the power to look at different options. Some of the options are contained within the Keane report, although many of the options in that report are flawed. For example, split mortgages could be welcomed as an option but not welcomed in the form Keane reported where the part which is parked will continue to accrue interest. We must also ensure banks have the ability, which they must use in a more robust way, to write down debt where it is very clear families will not be able to pay back this debt during the lifetime of the mortgage.

What the Minister has done is set targets and has said the Central Bank of Ireland will force the banks to make provisions if they do not live up to the targets. That is the stick the Minister is using to force the banks to deal with this issue but that stick is broken. It is simply not big enough and bold enough, it will not have the desired effect and it will not create the immediacy required to deal with this issue.

The other issue I wish to touch on is the mortgage arrears information and advice service, which has been very much trumpeted by the Minister for Social Protection, Deputy Burton, in the past week. She presented it as a force of 2,000 accountants who are ready to help those struggling with mortgage distress. Let us deal with the facts and what is being applied. Some €250 is being made available by the banks to those in this situation to avail of an accountant. However, the accountant is completely precluded from offering his or her opinion as to whether the solution being ordered by the banks is a good or a bad one. Basically, one can get an accountant who will explain the bank's proposal but who cannot tell one that he or she was dealing with Mary or John last week who is in the same circumstances but who got a far better deal. They are expressly blocked from doing any of that.

The reality is that this Government has had a very light touch in regard to bankers and banks but has had a very stern hand in regard to the ordinary people. We have seen that in the myriad austerity measures which have been brought in from the abolition of the motorised transport grant to cuts in child care to cuts in child benefit to the family home tax to the taxation of PRSI to the introduction of water meters to a vast number of new pressures this Government has forced on citizens. However, when it comes to the pressures it puts on banks, it is basically setting targets to offer proposals and that it will come up with the targets where the proposals have to be accepted at a later date. When it comes to the vast pay people such as Richie Boucher get - €843,000 - the Government says the banks need to reduce their cost base but that they can do that on their own terms. It is very different from those serving in our Garda force, serving as nurses or serving as teachers who are losing payments, increments and allowances and are taking real cuts in real time.

I am glad the Minister of State with responsibility with the Gaeltacht, Deputy McGinley, is in the House because it is time he started to defend the values and interests of the Gaeltacht. The decision to cut the Gaeltacht grant for teachers and the island grant is nothing short of appalling and shameful and I appeal to the Minister of State, to show a bit of backbone.

I have said before that the mortgage crisis needs a number of solutions. It needs the banks to be able to look at different options on a case-by-case basis but it needs an independent agency to force those options on the banks where they are not willing to do so. It also needs to allow for write-downs.

The reason many people have fallen into mortgage distress is that they have lost their jobs. That is the reality. Some 430,000 people are unemployed and many of them are struggling to pay their mortgages. If this Government dealt with the jobs crisis, it would, in part, be dealing with the mortgage crisis. A constituent of mine with a mortgage contacted my office. He is a 60 year old man, is a bus driver by profession and is unemployed. He has availed of the FÁS services for retraining and re-skilling and for seeking employment. Happily, he got a letter from that the FÁS employment service which stated that a vacancy notified to it may be of interest to him. The employer was Arriva Malta Limited, the location was Malta and the salary was €250 per week. The duties were driving transport vehicles on routes around Malta and left-hand side driving. It went on to state that while Maltese salary rates are lower than those in Ireland, Maltese workers pay among the lowest taxes in the EU. It further stated that the climate is typically Mediterranean and it asked the person to forward his CV to the FÁS employment service. The Acting Chairman, Deputy Olivia Mitchell, is laughing but this is what the Government is doing. A 60 year old person, who is trying to pay his mortgage and is unemployed, gets a letter from the FÁS employment service asking him to travel to Malta for a job for €250 per week and saying that he will get a tan when he is there. That is where this country is at. It is laughable in a way but it is very sad. The Government needs to deal with the mortgage crisis but the best way to do that is to deal with the unemployment crisis.

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