Michael D Higgins (Galway West, Labour)
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I believe that the Bill before us regarding the National Asset Management Agency is the most important legalisation that will probably come before the Dáil in the next decade or decades, raising, as it does, issues not only for this generation of taxpayers but also issues for future generations. It touches on an issue of inter-generational justice. Surrounding this Bill there has been a neglect of its implications are. Any detailed analysis of the Bill has been replace by a kind of myth-making in which many have participated, which suggests that the NAMA legislation, as proposed by the Government, is, as has been put in some of the media, "the only game in town".

I would like to begin by raising a few questions which are notable in the Minister's failure to answer them or to be addressed in the Taoiseach's speech. The first question is why a Joint Oireachtas Committee on the banking system has not been established. At one stage the Minister for Finance, Deputy Lenihan, seemed disposed to such a committee. The issues are how we came to this position, what were the decisions taken and what were the great failures of regulation. The suggestion is that we can move on without addressing them. The Oireachtas Committee should be sitting now and addressing the issue. The public want it addressed.

The myth which covers for that failure is the suggestion that somehow or another, we were all guilty of an excess of spending or whatever and that this produced the financial crisis. It is very difficult to have published the basic fact that 2,000 individuals make up €77 billion of what we are dealing with in regard to toxicity. There are 150 individual borrowers who are responsible for €50 billion and Anglo Irish Bank and Irish Nationwide, the heads of which have now gone, are responsible for €32 billion. A question of the first order in the public mind is why we are not investigating how this circumstance came about. The argument is that we are advance in our preparations for doing so, but perhaps the Minister or a member of Cabinet can reply and tell us when the inspectors will visit Anglo Irish Bank, return and put a report before the public on what went on there, which was scandalous by any consideration.

The public are naturally interested in the fact that the top 15 borrowers in Anglo Irish Bank are responsible for €7.5 billion, some €500 million per client. We still do not know the terms of reference given to the Garda Commissioner in regard to the possibility of fraud or inappropriate corporate behaviour. The public is entitled to know this before it accepts the Bill for the new banking system, inform the new banking culture or acquire a huge burden that will go forward to future generations.

The failures in regulation are being considered by those who are largely responsible for them. There is no evidence of independent distance between the examination and the failures in regulation, which were scandalous — the only word that can be used for it. People will be searching through remote footnotes in Central Bank quarterly reports to say that they warned of this or that. It is a ridiculous but sad, pathetic exercise in bureaucracy that seeks to recover credibility where there is none to be found.

In terms of the options before us, which are in the content of the Bill, one might reasonably ask what options were negotiated with the European Central Bank. Let me clear something up. The European Central Bank is simply accepting collateral from the Irish banking system, collateral which consists of Irish Government bonds. It is not involving itself directly with the Government's failure or pathetic response to the toxicity it presided over because of its deadly political intersections.

One might ask a question which is more than academic. What would happen if, instead of taking over such a large bundle of toxicity, the Government decided to address the issue of the mortgage books of the different banks? There is a tradition in this and many other European countries, such as Britain, of people paying their mortgages. It would have provided the Government with a mechanism for achieving liquidity. It would, in addition, have incurred a much lesser risk in terms of asset cover on behalf of the taxpayer and the Government would have been able to direct policy by restructuring the boards of the banks. The Government would, most powerfully — a point I will return to — have been able to head off home repossessions of people in danger of losing their homes.

The Government could have achieved this through temporary nationalisation. It could have cleaned the banking boards. It could have set up an agency to handle transitions from mortgages to leases to rental income and the right of return. In addition, it could have a far greater guarantee for taxpayer into the future in terms of assets generating a real income. That would have created some stress for the bond holders, however. I have not seen any evidence offered in relation to a number of other issues. It is a matter of opinion. In the short term, the public is entitled to know the terms of reference of the Garda investigation, which I have already mentioned.

I would like to speak about the public interest directors, who represent another little cosmetic aspect of this proposal. Every now and again, an opinion floats in from the directors. The public interest directors will not be able to function very much unless the Companies Acts are amended in a manner that enables the Minister to define to the House what precisely he expects them to do by way of public interest. I am reminded of the trammel on worker directors that was provided for under the Companies Acts. In one company after another, worker directors were compromised by the fact that they were bound by the Companies Acts. They were unable to act in the way that many people demanded of them. In the case of the public interest directors, all that has happened so far is that someone who was once a politician became a banker overnight and described the reasonable request for the public to be given information as "prurience". I assure the person in question that the correct rage which is at the basis of the public's demand to get answers to the questions I have highlighted is being guided by more than prurience.

I read the speeches made by the Minister for Finance and the Taoiseach at the beginning of this debate. It seems to me that they seem to be relying for liquidity on a change in banking culture. If I had time to go through the Minister's speech, I would focus on his reference to the agreement that has been reached with Bank of Ireland or AIB for this year or next year. There is nothing in the legislation to enforce liquidity. This Bill will not change the banking culture that brought us to this poisoned place into something that can serve the needs of the real economy in liquidity terms. The Taoiseach coined a new cliché when he started to talk about a banking system that is "fit for purpose". Clichés can last for more than a decade in economics, sadly. We wanted a system that dealt with banking rather than gambling.

It is interesting how language can slip away in a manner that prevents us from engaging in a critique. When I examined AIB's annual report, I read Mr. Dermot Gleeson's statement that "the turbulence experienced in the global economy and financial markets in the second half of 2008 was without precedent in our lifetimes". I remind Mr. Gleeson that the salaries taken by him and the other non-executive directors were without precedent in any decent society. I congratulate the Minister for Finance on becoming the majority shareholder in a bank that, according to Mr. Gleeson, is well capitalised, well diversified and has a strong balance sheet. Mr. Gleeson, who was the Attorney General when I served in the Cabinet, also suggests in the annual report that AIB has millions of customers who do business on a regular basis and deliver repeatable earnings. I assure him that his former Cabinet colleagues would not have been impressed with such speculative commentary. It is like saying one thinks the piebald horse will win.

The public rage has been informed by the notion that we can keep going as if nothing has happened. We are not getting the kind of analysis we want, sadly. I would have no difficulty with going in detail through the various issues that were raised in the Second Stage speeches of the Minister for Finance and the Taoiseach. Many questions have not been answered. It seems that this proposal is based on a number of extraordinarily weak assumptions. Where is the evidence that the property market has bottomed out? I have the height of respect for the Minister, Deputy Brian Lenihan, who is an intelligent man. In his contribution, he quoted from a limited piece of data relating to the Dublin commercial property rental market. It is important to note that the market in question is being sustained by legislation that stops commercial rents from decreasing, even at a time when businesses are going out of business and jobs are being lost in the retail sector. One cannot draw general conclusions for any other sector of the rental property market from such a little sliver of data.

It is interesting that everyone has accepted the myth of the month, which is that NAMA, as proposed, is the only game in town. Those who believe it is the only game are not pressing for answers to the questions I have listed, nor are they testing the assumptions on which this notion is based. It is interesting to compare Dr. Alan Ahearne's suggestion that we may be bottoming out with what he has said in academic publications. In one publication, he described the cycle of property values as being approximately twice as long the cycle he projects when he speaks about the end of the Irish cycle. One cannot analyse historical cycles by saying they conventionally finish within a certain number of years. Dr. Ahearne must have been informed by some special evidence that has led him to change the theoretical position he previously espoused. Perhaps he has been so informed.

In their speeches, the Minister and the Taoiseach referred to the investigations that have been carried out in the main banks — AIB, Bank of Ireland and Anglo Irish Bank. When I refer to the long night in September 2008 for which we are paying such a high price, I am not interested in distorting anybody's position. I appreciate the urgency of the situation at that time, but that cannot explain the conclusion that Anglo Irish Bank had the same systemic value as AIB and Bank of Ireland. I can see how one could make the case that the disposal of the loan books of AIB and Bank of Ireland was linked to the future of the Irish economy. However, the loan patterns that were approved are indefensible. I could ask similar questions about the disposal of various assets — 36% of which are land, 28% of which are buildings and 36% of which are contractual paper — to which the Minister referred in his speech. If I remember correctly, the Minister said at one stage that we were not exposed to any derivatives, in the United States sense of that term, and their toxicity. I am not sure whether he said that last September or last week, but that is academic. I would like confirmation of what precisely is meant by the third category of commercial paper.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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It is commercial property, rather than commercial paper.

Michael D Higgins (Galway West, Labour)
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Yes. We can come back to that.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am trying to be helpful.

Michael D Higgins (Galway West, Labour)
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We can go into such detail on Committee Stage. I hope the Minister will agree to hold Committee Stage in plenary session so that all of us who have gone to the trouble of going through this Bill in detail will have an opportunity to ask him questions of this nature.

As we look at this moving object, there is an assumption that the property market has bottomed out. The Minister has suggested that an increase of just 10% in property values is needed if NAMA is to be a viable vehicle. The first mistake with that assumption is that we will be moving 10% from where the Minister thinks we are. When one considers the evidence that was presented before the High Court in the recent Zoe Group case, it is clear that we are dealing with a declining entity, rather than a stable one. Therefore, one's 10% will have to be stretched a little further if one is to finish ahead at the end of the period suggested by the Minister. The detail of the Bill seems to indicate that the Minister believes NAMA will restore liquidity in the real economy. When the Taoiseach allowed himself a flourish earlier in this debate, he extended that point and said it would lead to renewed growth. We all want that to happen. We agree that we want the real economy to flourish My problem is that the Bill is based on the Minister's assumption that he can expect a change in this country's banking culture without a fundamental change in the boards of the banks. Approximately 80% of the board members are still in place. The Minister seems to think that those who engaged in wild lending — most of the commitments into which they entered were abroad — will suddenly fall in love with the real economy. When the Minister responds at the end of Second Stage, I would like him to spell out where he sees the evidence that he will be able to extract that liquidity from people. The ratio is improved through the issuance of a guarantee which they can in turn use as collateral for getting real money. What is to stop them from reducing externally based liabilities rather than those which are internal to the Irish economy? I looked through the legislation for the answer but the Minister is not taking any powers which would enable him to address that issue. If he had gone down the road of temporary nationalisation and decided to enter discussions with the European Central Bank on using the mortgage books of lending agencies as the assets on which he would issue bonds he would be in an easier position in respect of preventing home repossessions. I accept the good faith of Government Members in this regard. Nobody wants to see repossessions. Thus far, however, all we have achieved are tenuous six and 12 month agreements from banks which I simply do not trust. That is where we probably differ.

The matter is full of politics. One should head off interest rate increases by putting in place a mechanism that protects the home if a person falls into arrears because of interest rates. This is partly addressed by the aforementioned agreements but we should be able to turn mortgages into forms of lease, develop insurance mechanisms or transfer mortgages into tenancy purchase options. I remind Deputies that in many cases both partners have had to work to sustain outrageous and unsustainable mortgages. If conditions improve, people could move back along the chain and we would have a stable housing market. Not to do that is to wait until the end of this or next year, when the banks begin to issue court proceedings or people start to apply to local authority housing lists. I am simply suggesting an outline and if the Government does not pursue the matter I will advocate that the Labour Party establish its own commission under someone such as Professor Drudy to produce options which would ensure that even in the worst of economic conditions the family in the home will not suffer.

I look for the paragraph in the NAMA legislation which deals with liens on lending institutions for preventing home repossessions. This is not an abstract or academic point. Similar proposals have been considered in the context of the insurance model in the United Kingdom and some of the mechanisms put in place in the US approach to avoiding home repossessions. One would have expected similar proposals in the Bill before us. I am not worried about what such a mechanism would be called.

I have outlined a number of questions which I believe must be answered if we are to restore trust. We need more than an assurance that we are creating a new culture of banking. We need to see significant change on the boards and to receive all the information on how we arrived at this juncture and what was discussed with the European Central Bank. We need to know why certain options were rejected and why NAMA was chosen above other solutions. We must also reform the Bill on Committee Stage to give it the transparency it currently lacks. Above all, we must be able to head off the worst of the consequences. The option before us is a disastrous one. It puts an albatross around the necks of this and future generations. Even if the Bill passes Second Stage, let us at least put in place protections on Committee Stage so that families can remain in their homes until they climb out of the trough of unemployment and crisis economics.

Let the odd person out of the 166 Members of this House recognise this paradigm of greed has failed both in Ireland and internationally. Not everyone is guilty. Like many people who built houses, I am aware that some craftsmen can cut timber or lay blocks while others can estimate the price of building a house or lay out a curved wall. All these were replaced by people who put no value on these skills and who were told by banks to borrow on the basis of fantastic property inventions and price escalations of 300% or 400%. Leading players in the banking institutions lashed money at these individuals. These are the guilty parties and the Irish public wants answers to the questions I have posed.

Noel Ahern (Dublin North West, Fianna Fail)
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We all know that the banking system has let us down. I do not disagree with Deputy Higgins in regard to the extraordinary greed of people in the banking sector. As the private sector cannot solve this problem on its own, governments around the world have had to step in. Credit is the lifeblood of the economy and we need a healthy banking system to support mortgage holders, businesses and service providers. All Deputies more or less agree on the nature of the problem but shades of opinion differ on the solution.

Since the advent of our severe economic problems in the summer of 2008, the Government's strategy has been to restore public finances, solve the banking crisis and restore competitiveness and, therefore, employment growth. These are not easy tasks. Some people in the big bad world believe the Minister for Finance can wave a magic wand and suddenly all is well. However, months of work were required to develop a strategy. After hearing from people both within the system and outside it, the Government came up with the NAMA proposal in April and draft legislation in July. It is a bit rich that in recent weeks people have suggested bits of ideas they read in The Economist or the Financial Times. The details of these suggestions are fairly sparse and, while they may have been valuable months ago, at this stage we cannot afford to waste another year by starting again from square one. To quote Deputy Higgins, NAMA is the only show in town.

Michael D Higgins (Galway West, Labour)
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I said that was the myth of the month.

Noel Ahern (Dublin North West, Fianna Fail)
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I apologise but he used the phrase. I do not think it is the myth of the month.

Michael D Higgins (Galway West, Labour)
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It is the myth of six months.

Noel Ahern (Dublin North West, Fianna Fail)
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It is a fact because we do not have another year to start afresh. We have to work on the Bill before us. It may not be perfect but we can improve it on Committee and Report Stages with some of the suggestions made in this Chamber. We simply do not have the time to develop other proposals because we need to get the economy moving again. If there is an upturn in the world economy, we must have our banks giving credit to good ideas and ventures to move forward.

The homework on the Fine Gael proposal was not done in time. Labour spent months speaking about nationalisation, which, I accept, is a lovely, sexy fashionable slogan, but we all know that even if one nationalised, one would still need some sort of agency to move matters on thereafter. However, I was pleased to hear the leader of the Labour Party and others state in recent weeks that the party never really had in mind that there would be 100% nationalisation and that just increasing the equity share was what it had in mind. If that was made clear months ago, we might have made progress and we might have had a greater understanding of where we were and gone some way towards reaching a consensus on some of the issues.

Sometimes when there are significant problems it is no harm to reflect on the good days and the good that has been achieved. The economy enjoyed a good spell over the past ten, 12 or 14 years. There has been fantastic growth and improvements beyond what many of us would have thought of in our wildest dreams. I always was impressed by the number of people working in the economy, where 15 years ago or so there were 1.8 million employed and then we reached employment of more than 2 million. In recent years I was amazed, surprised and delighted on several occasions to see people who had not got a job for 10 or 20 years becoming employed. In parts of my constituency which would not be regarded as well-off areas, entire households, not just individuals or fathers, had not got jobs for years, if ever, and the progress made in the economy in recent years made all the difference. I accept that 200,000 of those jobs have now been lost — hopefully, temporarily — but there are still approximately 1.8 million people working which is much better than was the case when there were 1.1 million employed.

We can look back as a society and state that we lost the run of ourselves. I suppose everyone would say that another group lost the run of themselves. Government was not the worst offender over those ten or 14 years. When the coffers were full Government did extraordinary work — reducing the national debt, with the pension reserve fund and the various infrastructural projects. We all enjoyed tax reductions and there were significant improvements in services in health, education, special needs and so on.

This is not just a Government matter. Much of the anger and hurt is because people borrowed vast sums for productive, and perhaps not so productive, purposes. This recession is different from ones in the 1980s and at other times because of the level of personal debt. Much of people's annoyance and hurt is because of the money people borrowed to buy property here and abroad.

The economy is like a pendulum. Some of the gains made in recent years were not sustainable when the pendulum swung in the other direction. Many still feel that we could have had a soft landing, that we could have come down off our own ten-year high were it not for the world recession which came along and hit us for six. We all are wiser after the event but, as Deputy Michael D. Higgins stated, the main blame for everything lies with the banks which were basically shovelling out credit.

For five years I was Minister of State at the Department of the Environment, Heritage and Local Government with responsibility for housing and I recall that for the first two or three of those my mantra at Question Time or when out and about was "Supply, supply, supply". At the time I felt, as we all did, that only by increasing supply could one help to bring down and control prices. Because people were no longer emigrating and because they had jobs, they needed accommodation and like anything in short supply, houses were too dear. Then approximately half way through my five years in the Department I began to realise that something was wrong, that despite the supply house prices were still increasing. Basically, it was because there was too much credit. While I did not favour developers for the first couple of years, I really began to feel that the builders were not really at fault. If there were people coming to look, not even at show houses but at a building site and a plan, to be told where their house or apartment would be located in a field, and if they were trying to knock the builder over with bits of paper showing what loans they had got from the banks, it was difficult for the builder not to increase his price.

At that time I remember strongly objecting to 100% mortgages, not so much in principle but for the way they were being sold or advertised. If one gave a 100% mortgage to a person or a couple who were well set in careers, that was all right, but at that time some of the financial institutions were giving out leaflets on Grafton Street at lunchtime, as one would give out leaflets promoting an early pint, buying a pizza or something frivolous. Handing out leaflets encouraging impulsive buying and asking people to take out a mortgage with no deposit was shameful. It was naked greed. At the time as a mere Minister of State I made several references in speeches to the media about it and the general reaction was a mixture of being ignored and being rubbished. I was surprised that many of the media were horrified at me sort of saying nasty things about the financial institutions and I remember being amazed at the way many in the media protected the financial institutions. At that time I remember in the Department we had meetings with many organisations such as the Central Bank and the Department of Finance. We suggested that the amount that financial institutions put on deposit in the Central Bank in relation to their mortgages be increased by the slightest amount merely to give a message that we needed to put a gentle foot on the brake, but that was rejected. They were not interested in hunches. They always wanted quantified, verified researched data so that one had to prove everything to them ten times over before they would-----

Michael D Higgins (Galway West, Labour)
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Generate the bonuses.

Noel Ahern (Dublin North West, Fianna Fail)
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Whatever, but that was the way it went. In the 15 months, life has moved on. We have had the guarantee of deposits and liabilities and the nationalisation of Anglo Irish Bank, along with the acquisition of 25% shares in AIB and Bank of Ireland. We now have billions of euro in impaired loans and banks are not servicing the economy, as we know. However, we must deal with it and move on.

NAMA is purchasing loans of €77 billion from the various financial institutions, for which we are paying €54 billion. Each loan will need to be assessed and valued independently, but I am surprised that the valuations to date have come out so high. House prices are down by about 30%, but I thought development land would have fallen much more in price. I know the line that when somebody borrowed €100 million, theoretically that was only 75% of the investment, but I wonder about it.

The most similar event I can recall is the winding up of the Insurance Corporation of Ireland. After years in the Department of Finance, there must have been some conclusion to the file and recommendations about how to handle similar events in the future. I would love to hear from the Department about these recommendations. I can remember times when the banks were making major profits and we were all still paying levies to make up for the decision made back in the 1980s. That is my biggest fear this time. NAMA will work fine — that is not a fear. However, I look into the future and see the banks making great profits again in ten or 15 years, while much of the residue — or crap, if I may use that horrible, unparliamentary word — is still left in NAMA. Are we, as taxpayers and as the State, properly protected in this Bill? How do we need to change it in this regard?

I particularly like the arrangement that has been made to date whereby we have made a capital investment in Bank of Ireland and AIB in return for 25% equity, as well as dividends in the future. However, if we must give all these resources, in whatever form, to the banks, I would like to have more equity. I hope such things can be considered on Committee Stage. My problem is not so much with the €7 billion long-term economic value — in fact, I was surprised that figure was not higher — but the €9 billion in rolled-up interest that we are taking over. What are we getting for that €9 billion? I know what we are getting in terms of the long-term economic value of the €7 billion. That is reasonable, as one can only expect property values to rise into the future. However, for the €9 billion, we should be getting an equity stake and we should be buying it at the share price that prevailed some months ago and not the current price. It is on those points I have my concerns and I hope we can consider such things on Committee Stage to strengthen the Bill and give the State and the taxpayer more protection.

It is proposed to make lobbying NAMA a criminal offence, although I do not know whether such a provision is in the Bill yet. Of course, any attempt to influence the valuations would be terribly wrong and should be an offence, but we must be careful that we are not becoming daft with such provisions. I hope that if Deputy Noel Ahern were to write a letter or two to NAMA it would not be decided on the basis of a response to an FOI request in two, five or ten years' time that he was improperly lobbying. We must be careful what we put into such legislation because sometimes it can be daft. Everyone is against improper lobbying, but when a Deputy writes letters it is not the letters that do any harm.

We have this Bill and we cannot afford to waste a year going back to square one. It may not be perfect, but let us pass Second Stage and get on with Committee Stage so we can improve it for the good of society and the taxpayer and for our future. In addition, as Deputy Higgins said, we need to include a guarantee that the banks do not just take the money and fatten their balance sheets with it. It must be rolled over so that we achieve the outcome for which we hope.

Seymour Crawford (Cavan-Monaghan, Fine Gael)
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I support some of the comments made by the previous speaker. There are major questions over NAMA which need to be investigated and I am glad somebody on the Government side has admitted this.

I welcome the opportunity to speak on the National Assets Management Agency Bill 2009, which is supposed to deal with what Deputy Brian Lenihan admitted to be one of the more serious issues in the history of the State. He claimed that some of the commentary on the Bill was misinformed and even mischievous. However, I assure the Minister that from speaking to people at both constituency and national level I know there is still much anxiety and real fear because of the failure of the Minister to clarify many of the issues about which he was asked at committee meetings and, since then, in his Second Stage speech.

The Minister said the Government's proposal to establish an assets management agency had received the backing of the IMF and the ECB. It has certainly received support for increasing its share of our two main banks, but there is no guarantee for taxpayers and no funding through the banks to keep small industries and businesses alive. Only this morning I met a businessman in Monaghan who manufactures and supplies goods for the housing sector to county councils in Dublin and further afield as well as to the private sector. He advised me that he would have to put his staff on a three-day week from next Monday, not because he is short of work but because he cannot get his payments in from either the private or the public sector. Clearly the banks are not giving the necessary finance even to public-sector building projects, which should be a sure bet. This means more people will end up on social welfare.

Last night, together with my Oireachtas colleagues from County Monaghan, we met Castleblayney Town Council and the chamber of commerce, and it was simply impossible to explain to them how billions could already have been poured into the banking system while no relief is available for hard-pressed rate-payers in Castleblayney, which is on the Border and which receives the third lowest subvention in the whole of Ireland through the local government fund. During the discussion in Castleblayney regarding Irish and UK VAT rates and the price of alcohol, it was stated that 50% of alcohol sales in the island of Ireland are actually in the Six Counties. This is some indication of the loss of revenue occurring, especially in the Border area. We were also advised that business owners were not able to obtain the necessary capital to keep their businesses going. If NAMA does not provide this — and I do not believe it will — then some other rescue package must be put in place.

Those in the Border region are extremely worried about the fact that NAMA does not cover banks such as Ulster Bank, National Irish Bank and ACC. In fact, NAMA does not cover any borrowings under €5 million. I am sure the number of people in the Border region owing more than €5 million will be quite small, thus all the banks, including Bank of Ireland and the AIB, will be taking their customers, including developers down the legal path, leading to forced sales at low levels. This has already happened as has been well publicised in Ballinagh a few miles outside Cavan town. People who bought houses only a year ago are now seeing similar houses in the same development being sold at less than half price. How will NAMA, as it is now structured, deal with situations such as this and how can the Minister suggest that property prices are going to rise in the foreseeable future? This structure, whereby smaller groups are not underwritten will curtail increases in property prices because they are not receiving the same benefit.

Several years ago, I brought to the notice of a number of people the expansion of the housing boom. In a constituency like mine, where little or no efforts were being made to maintain or produce permanent jobs, how could planners and for that matter builders and banks justify the mass production of houses? In late autumn 2006 and again in February 2007, as we approached the then general election, I raised this issue with senior colleagues and members of my own Frontbench and advised them of what would be the outcome in this regard. Anyone who at that time questioned the situation was accused by the then so-called saviour of Ireland of being negative and ill-informed. The former Taoiseach of our country, Deputy Bertie Ahern, advised them to go away and commit suicide.

The property bubble could not and would not have existed without the involvement of incompetent senior bankers who convinced themselves that they knew everything and that they in turn deserved huge salaries and bonuses. It is impossible for the ordinary taxpayer to understand the role of the Regulator or Central Bank in this regard. Across the whole Irish banking sector there was a failure at board level and the question must be asked if boards were properly or legally informed by senior management.

One cannot help but believe that the principle of the Central Bank and Financial Regulator was to hear no evil, see no evil and speak no evil. One cannot but believe that the whole ethos of the builders, developers and banks was laid down by the Galway tent brigade where everyone worked together with senior politicians in one big happy club. The then Taoiseach and then Minister for Finance, Deputy Brian Cowen, now the current Taoiseach, gave out the money from the building boom like there was no tomorrow and as if it was coming from a permanent genuine base.

As far back as when the now European Commissioner Mr. Charlie McCreevy was Minister for Finance our party Leader Deputy Enda Kenny questioned the whole basis of the benchmarking structure and how it was put together but even then some of the relevant information had disappeared. We now find ourselves in a situation whereby people who benefited from the benchmarking structures, in particular young graduates, who purchased expensive houses with loans of up to 100% of the cost of an overpriced property find themselves with incomes inhibited by levies and pension funds and the benefit of mortgage relief removed. They now see themselves as victims of Government and bank mismanagement and they find it impossible to understand how bankers and developers are in reality the people who are being rescued. I have no doubt they as taxpayers, together with their children and grandchildren, will have to pay for Government mismanagement and for the mismanagement of banks and developers. While I appreciate there are some investigations into the activities of some people in Anglo Irish Bank and, possibly others, it takes a long time to come to grips with white collar fraud. No one can call it anything less.

The Minister for Finance, Deputy Brian Lenihan, stated in his Second Stage speech that the citizens of this country are understandably angry about the state of the banks. They are bitterly disappointed by the failure of our regulatory system and are appalled by the details of the reprehensible behaviour of some in the financial system and property sector in whom they placed their trust. They are also angry with the Government. Many ask why we are putting money into the banks while they endure the brunt of the difficult budgetary decisions which must be taken.

There is now, unfortunately, a breakdown of trust in the entire system, as was evident when we were out canvassing on the Lisbon treaty. My colleague, Deputy Richard Bruton, asked on 22 September what is the logic of using over €36 billion in taxpayers' money — 40% of the total NAMA bonds — to purchase toxic assets from two broken financial institutions, namely, Anglo Irish Bank and Irish Nationwide Building Society, that are almost certain never to lend again? What is the Government's strategy for these two broken institutions? What binding mechanisms can NAMA impose on the other banks to use the extra funding from the ECB to finance lending to households and struggling businesses rather than paying down other expensive sources of funding from international markets?

I want to return to an issue I raised earlier regarding the non-Irish banks. It is impossible for me representing a Border constituency to understand how NAMA can be responsible for one-fifth of its assets in Great Britain, 6% in Northern Ireland, only two-thirds in Ireland and the remainder in the USA and Europe. According to the Minister for Finance, Deputy Lenihan, those developers and customers dealing with the Ulster Bank, NIB and ACC are being ignored on the basis that they will be supported from their home base in the UK, New Zealand or Denmark. I would urge that this situation be re-examined as a matter of urgency to ensure there is no further damage to the Border area. If all the non-national banks follow the lead of ACC and withdraw their services from the area this will minimise competition in the long term. Of course, it will be customers, in particular small businesses, that will suffer. I believe the Minister for Finance, Deputy Lenihan, must, as has already been requested of him by Deputy Richard Bruton, contact his UK, Danish and other colleagues to ensure pressure is put on these banks to deal sympathetically with their customers in Ireland.

One other cross-Border group I must mention is the Presbyterian Mutual Society, which was clearly undermined by the introduction of guarantees to other banks. This group has a number of investors from the Border region, some of whom are in serious situations since it was put into administration. I am aware that the group's interests are under discussion at British Cabinet level and I, once again, urge the Taoiseach and Minister for Finance to show their interest in this issue as the amount of money needed to allow this organisation to survive in the interests of small investors is quite small. Clearly, the percentage of the funds in this all-Ireland institution from south of the Border would mean that any involvement by the Irish Government would be minimum as compared with the billions being committed elsewhere.

While I appreciate that if Fianna Fáil, the Green Party and the Independents, such as Deputy Mary Harney stick together the Bill will be passed through Second Stage, I urge the Minister and his officials to take seriously the well-intentioned, constructive amendments being but forward by my party Leader, Deputy Enda Kenny and our finance spokesperson, Deputy Richard Bruton. They proved on 29 September 2008, when called on by the Taoiseach to support the introduction of the State guarantee, that they can put the country first. Deputy Bruton's proposal for an economic recovery bank is clearly getting generous support from serious business people and economic advisors. In that context, one must be concerned to hear the Minister say that NAMA has been drawn up on the best expert advice and counsel available to the Government. Where was this expert advice and counsel during the past number of years which allowed us to walk blindfolded into this mess? We can only hope different personnel are involved.

With regard to Anglo Irish Bank and the type of personnel that were advising the Government on this issue, how can Minister for Finance, Deputy Lenihan, be so sure that Mr. Seán Fitzpatrick of Anglo Irish Bank will repay, to use his words "every cent" that he owes the current bank? If Mr. Fitzpatrick is unable to meet full interest payments on an estimated loan of €106 million, how will he ever be able to repay the capital? It is difficult for someone under pressure to pay his mortgage to listen to Mr. Lenihan making such comments when he knows that such repayments will not happen while nothing will be done for mortgage holders. Imagine the situation for someone who had a high interest fixed rate mortgage who is now being told he will have to pay a further increase when the fixed term is over.

The Minister and the Government have a major job to do to establish NAMA and, more importantly, to get it to work so business, jobs and private borrowers can see the benefit. We will not tax our way out of this situation, we will only lose more jobs. I was amazed to hear the leader of the Green Party on TV3 saying the Government would not deviate from the norm for Seán Fitzpatrick or anyone else. What is the norm? What was the norm as far as these people were concerned?

I received an e-mail asking why only loans over €5 million qualify for NAMA. What will happen to development loans of less than €5 million from Bank of Ireland or AIB Bank, the person asked. He wanted to know if these banks will be instructed by Government to offer the same terms to holders of loans under €5 million as those offered by NAMA to holders of loans over €5 million. The Minister for Finance in his speech to the Dáil referred particularly to the past conduct of the banks, as well as the distressed assets of developers as a consequence of the failure of the banking system and the economy. Surely this applies equally to those who owe development loans of less than €5 million, asked the person who wrote to me. How can we make fish of one and flesh of the other, he wanted to know.

For many, answers to these questions are critical. I have already stated that Ulster Bank, NIB and ACC should be included in these questions. When the banks came before the committees some time ago, everyone was assured that they were sound. The Comptroller and Auditor General and all these different people were in before the committees and we were assured there was no problem. I fully understand there have been international situations but they were not the main cause of our problem.

I support the Irish Farmers' Association in its opposition to a proposed 80% capital gains tax. This is a serious situation. Many good farms were divided by road building or similar infrastructure projects. The land was taken through a CPO and now 80% of that money would have to be paid to the Government. What will be left to restructure the farm or buy somewhere else? This must be examined. It is not a windfall if someone is forced to sell property, leaving his farm not viable. It is back hand work that such a suggestion should be brought in through the backdoor as an amendment to the Bill.

The idea must be reviewed because it will not bring in any money. The former Taoiseach, Deputy Bertie Ahern, used to blow about the lowering of taxes and how that led to an increase in receipts because there were more transactions. Here, capital gains tax will increase from 20% to 80%. It is absolutely outrageous and will hit farming and rural communities hardest. It will destroy any opportunities they may have and I beg the Minister of State, as someone with responsibility for agricultural matters, to deal with this promptly. It is up to the Minister for Agriculture, Fisheries and Food, Deputy Brendan Smith, to make sure this ridiculous proposal does not go through this House. It is unacceptable, unrealistic and will cause serious problems. There is someone there who wants to get at the farming community and we must cry "stop" somewhere.

M J Nolan (Carlow-Kilkenny, Fianna Fail)
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This is possibly the most important legislation that has come before this Dáil and I support it. The NAMA legislation is a response to the financial crisis that the country finds itself in as part of a global economic crisis. As a result of our circumstances, we have been more affected than many of our European partners or other economies.

I commend the Government, particularly the Minister for Finance, who has undergone a baptism of fire since the crisis began a year ago. At short notice and only a relatively short time in the portfolio, the Minister had to deal with it. By common consent, it has been universally recognised that the Minister for Finance is coming to grips with this crisis and dealing with it in a commendable manner.

There is a long way to go and the legislation before us faces a long journey through the Oireachtas. It is in all our interests, however, that it is passed speedily. I was glad to hear the Minister in interviews talk about accommodating individuals and parties if proposals were introduced on Committee Stage that would strengthen the legislation. Early in the summer, the Minister published the draft legislation so interested parties could debate and consider it. Of all the proposals made to deal with the unprecedented economic downturn we have seen, this is by far the best solution. For that reason, I have no difficulty in supporting it.

Some of the debate has been strange, to put it mildly, in that we hear individuals saying that in the good times the money was wasted. I disagree with that theory. Over the years we have invested wisely in infrastructure, with intercity motorways being a fine example. We invested significantly in education at all levels, in teachers and in resources. Local authority housing has seen a huge investment at a huge cost to the State. One might say, looking back, that some of the prices we had to pay for those houses were inflated because of the boom in the construction industry. I remember an answer to a parliamentary question three years ago that we would satisfy demand when we reached a stage when we were building 45,000 units a year and there would be a levelling off of prices for house price construction. However, that building boom went on and we saw building of up to 85,000 units per annum. Looking back now, that was clearly unsustainable. Having said that, we are where we are and we have to deal with that.

We invested wisely in some areas with more gardaí, nurses, teachers and this must be acknowledged. This was happening at a time when we were running surpluses on an annual basis. We have reached this stage in our economic development and we are now in a downturn. There are individuals and families who are suffering. There is not a Member of this House who is not aware on a daily basis of the hardships being encountered by them. What disappoints me is the development of a social divide, where clear division lines have come between public service workers and private sector workers. That will not resolve anything, and I ask individuals, groups or organisations who may be going down that road to recognise that it is a dangerous path to travel. We are all in this together. We will have to resolve this together, and I implore that we step back from that divide. We have enough problems on our hands without dividing among ourselves.

The NAMA legislation before us is a response to the global financial crisis which has caused extensive and rapid deterioration in the Government finances. The principle of the Bill is worthwhile. We will not work ourselves out of this financial crisis unless we have a stable and functioning banking system. While mistakes were made in the past with the regulatory oversight of our banking system, as an outsider looking in, it seemed to me as though the banks were chasing one another, and all that happened was that one particular bank went off on a tangent, was irresponsible in its lending and was allowed to be irresponsible. I blame our regulatory system for not reining in that bank. As a consequence of that, other banks then decided to follow. We had this tail chasing going on where banks were competing with one another to give out more and more funding for clearly unsustainable developments. We now have to clean up that mess. If there is one serious lesson to be learned by the Minister and the Department of Finance, it is that we must have a strong and functioning regulatory system that oversees our financial institutions. The fact that we are now obliged to take a stake in our main banks means that we have directors on the board, and they should be in a position to see how that banking system works.

The basis of the legislation is sound. The loans will be transferred to NAMA at a discount, and while there may be some debate as to the level of the discount, I am convinced by the Minister's argument during his Second Stage contribution that the discounts will be brought back over a nine or ten year period. Over that period, I hope that we will see a surplus as a result of working through these loans. It is important that the assets are worked out and not just sold. The principle on which the Bill is based can succeed and the loans will ultimately bear fruit, so that the Government and NAMA will not be at a loss.

The Minister has been at pains to state that this has to be a transparent system. The legislation clearly outlines that. Some of the loans that will end up in NAMA will never be able to wash their face. For that reason, it is a complete package that NAMA will take over. It is also important that NAMA employs the best professionals to deal with this, not just on the basis of taking over loans and ensuring that value for money is obtained for them, but also for the valuation process. The Minister has assured us that each individual loan will be examined and that a proper value will be put on that loan. Having taken over the loans, he will need professionals on board and he has stated that he is prepared to outsource and get professional advice in dealing with them. That is not just for dealing with the loan, but also for dealing with the asset that is taken on board. There is development land that will clearly have a value for rental or whatever else. The fact that some of this land is in highly desirable areas means that the State agencies could avail of some of this for schools, hospitals, Garda stations or whatever. I am pleased to note that he has broadened the remit and that he is prepared to look at that aspect.

The financial system has been severely challenged over the past two years. This Bill will protect the financial institutions somewhat, and they need such protection at this stage. It must be at a cost and they will have to pay for it, but our economic future is dependent on having a good financial system in place. I would like to nail the lie that this is a bailout for borrowers or developers. The Minister was very clear when he stated that loans which are transferred to NAMA are still due to be repaid. NAMA is not an easy way out for borrowers or developers. That message must be put out. It is not a bailout for bankers or developers and that cannot be stated often enough.

All international banks are experiencing difficulties in accessing funding at the moment. When this Bill is passed, it will mean that our banks will be able to access funding again. It is important that the Minister and the directors he has appointed to the boards of various banks ensure that there is liquidity and that the banks lend again to small businesses and farmers. I met with a group of farmers yesterday, and one of the main difficulties they had was in securing working capital from their banks. These would be farmers with a track record stretching back two generations. Now, for the first time, they find it difficult to access working capital and funding from financial institutions. It is important, when the legislation is passed and banks are in a position to access money, that the money is lent out. That is the main purpose of the legislation.

It is important that we put on record the support of our European partners, the European institutions and, in particular, the European Central Bank. One shudders to think what might have been the outcome of this crisis had we not been part of a bigger, European community and the single currency. In that regard, I congratulate the Irish electorate which, in its wisdom, supported the Lisbon treaty last Friday. More than anything else over the past number of months, that support sent a clear message to our fellow Europeans that we want to be at the centre of decision making in Europe. That is our future, it is where we have been for the past 30 years and is where we want to remain. That message was sent out clearly on Friday.

On the upcoming budget, I am aware the Minister has started to negotiate with various Departments about their funding for 2010. He has a difficult task ahead of him to draft a budget that will be acceptable to the majority. The direction he is taking towards spending cuts rather than tax increases is the correct way to go. I heard it suggested today that if we take account of the levies imposed recently, we have an effective personal tax rate of approximately 52% or 53%. We cannot impose much more personal taxation without returning to the bad old days of the 1980s, when we had a flourishing black economy because personal taxation was far too high.

I wish the Minister well in getting this legislation through the Houses. It is positive legislation and the best available. We cannot allow things continue as they are. This is the best option, although none of us wanted to reach a stage when it had to be introduced. I wish it a speedy passage through the House.

Paul Connaughton Snr (Galway East, Fine Gael)
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I wish to share my time with Deputy Damien English.

Seán Ardagh (Dublin South Central, Fianna Fail)
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Is that agreed? Agreed.

Paul Connaughton Snr (Galway East, Fine Gael)
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I am looking forward to the vote on the end of Second Stage of the Bill and will vote against it. This is one of the biggest gambles I have seen in the House in 30 years and like all gambles, nobody knows where it will finish. It is bad enough that the ordinary members of the public would not know or might not be expected to know where it will finish, but nor do the Minister for Finance, the Taoiseach or the Government.

One of the major reasons the people voted "Yes" in the Lisbon treaty referendum last Friday was because of the fear of the financial problems coming down the road. They believe the European Central Bank is becoming an anchor tenant for Ireland and believe that is from where the bailout will come. I hear Government commentators say regularly that the ECB promoted the idea of NAMA. I am not sure we are handling the situation the way it wanted us to, but it will be central to it. We are lucky the people of Ireland responded as they did on Friday. I hope, for everybody's sake, this solution will work.

I would like to give a background to the situation from where I stand. It is a result of nothing but pure greed. That greed was shared by developers and builders and accommodated by the Government. Together they formed a cosy cartel. For that reason, the people, no matter if they must wait five weeks, five months or two years for the Government to go to the polls, want to get this Government out. They know they have been scuttled. I will give the House an idea of how this happened, as it has not been mentioned often in the debate so far.

Look for example at the countless thousands of young couples who bought houses at twice their value over the past five or six years. These prices were as a result of the greed of the property developers, builders, economists, banks and all involved. Now, these young couples face a drop in equity, but as long as they continue to live in their houses, they will get over that. However, as interest rates increase, they will be in a far worse situation. Worse still is that because of NAMA — there is no free lunch — these same people will end up bailing out the people who caused them to pay twice the value of their house in the first place. Young couples all over the country believed they were doing the right thing when they bought their homes because every night on television economists from financial institutions, a Minister or a Taoiseach, including the current and previous taoisigh, told them that the fundamentals of the economy were all right, that we had people in work and, in other words, they believed the prices young couples were paying for houses were good value for money. That sort of rubbish went on for four, five or six years, but the economy was a bubble. It would not have worked in any country.

Now we have found ourselves in a terrible situation. Young people are paying twice the repayment on a house they should have to pay, but if they had to sell the house they would be ruined. At the same time, the NAMA solution will be brought forward. There is no such thing as a free lunch. Sometimes Ministers try to get the message across that because of NAMA there will be no real cost, because after five or ten years the various properties will reach market value again. Where could one borrow €54 billion on behalf of the State without a cost to someone? Who is going to pay this money back? It is very unlikely the builders or the banks will repay it. They will come out from under the canvas yet. It is because of this there is latent anger all over the country against the Government that allowed this to happen.

We hope serious amendments will be introduced to the NAMA legislation. I will not go through our proposals now, but there will be serious discussion in the Chamber on the amendments and, hopefully, the Government will yield to them. If the Government cannot ensure that the banks do not featherbed their reserves to build themselves up, and ultimately if the money does not return to the economy to provide jobs and help generate activity, then the anger will cut loose altogether. Insufficient thought has been given to this because it is an easy way out for the banks.

With regard to the Fine Gael concept of a good bank and a bad bank, at least pressure and responsibility would be put on the individual banks to try to straighten out what they had walked into at a time when even non-economists could see the banking system could not sustain such activity. My constituents in Galway East and people further afield are asking me whether anybody will actually be brought to boot for this. Will anybody be brought to court and sent to prison for the terrible problem that has beset thousands of Irish couples, for which they will be paying for the next 30 or 40 years? As far as I can see there will be very few and the process will be very slow.

The principle of the Bill is wrong and the gamble is too great. Should the slightest thing go wrong, we will ensure that countless thousands for two generations to come will be saddled with something they had not a hand, act or part in. From a rural Ireland viewpoint, the 80% capital gains tax that is being proposed as an amendment to the Bill is outrageous for land compulsorily acquired for road building. That land was not rezoned. It was acquired for a specific purpose, to build the roads. I do not have time to talk about the problems such acquisitions cause for farmers, but this process has put them out of business. When one considers the national good created, and that countless thousands will use those roads for generations to come for the benefit of all, the fact that the people who own the land will have to face an 80% charge is outrageous. I assume this will be given much greater scrutiny over the next couple of weeks because it is a bombshell in rural Ireland, something none of us can put up with.

I heard the former Minister for Finance, Deputy Charlie McCreevy, say glibly here one day, in explanation, when there was some type of pressure on the budget: "If I have it, lads, I'll spend it and if I haven't, I cannot". What way is that to run an economy?

Damien English (Meath West, Fine Gael)
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I am glad to have an opportunity to talk on this Bill because it is probably one of the most serious pieces of legislation we will ever discuss in Dáil Éireann. Apart from what went on today, which is a strange occurrence and something that has to be dealt with as soon as possible, the NAMA situation is very serious, and I do not believe it is being dealt with as it should be. We are not being given the right information.

My first concern is the book value of the loans. I do not believe that the banks do not know the exact amount of the debt nor that Minister does not know the exact amount. It was baloney to come in to this House, as the Minister did a couple of weeks ago, with estimates of potentially $77 billion or maybe €60 billion because they know the true extent of the situation. Last October, 12 months ago, there were committee meetings here where the Regulator and his staff told us they were starting to go into every bank to look at every loan and do their sums. It does not take 12 months to put a portfolio of loans together and add them up. If I have to get the Minister an abacus I shall do so, but he should not tell us, with regard to something as serious as this, that 12 months on, he is working on estimated figures. That is unbelievable. It cannot be true and needs to be corrected before we vote on this.

Also last October we were told by the Regulator and his staff that developer debts and so on came to €39.4 billion. On the night of the so-called mini-budget, some months ago, on the announcement of NAMA, we were told it was €80 billion or €90 billion. I asked then, and I shall ask again today, how, in God's name, did it increase from €39.4 billion to €80 billion in less than six months? We got half an explanation from the Green Party Minister the day after the mini-budget, to the effect that this involved overseas property of €20 billion or €30 billion. Again, I do not believe that, so somebody misled us. Either it was the Regulator and his staff last October, or the Minister is doing it here.

On the night of the budget I repeatedly asked the Taoiseach, the Ceann Comhairle and the Minister for Finance to clarify the figure of €80 billion to €90 billion but they have yet to do so. They never came back to me despite assurances and reassurances that they would check it out. It never happened, yet we are being asked to vote on something such as NAMA. If it is €40 billion and €30 billion of Irish developers' debts in other countries, why are we even considering taking up such property debts in the US, France, England and so on? Whatever about the small merit there might be in having some type of NAMA for the Irish element, we should not be buying up the property debts that belong to Irish people in other countries. That is fundamentally wrong and I want the Ceann Comhairle or the Acting Chairman, Deputy O'Connor, to know that I want this clarified — indeed, he might be Ceann Comhairle shortly enough.

We are told that some of these loans will pay for themselves, and the Government will be able to pay for the cost of NAMA on a yearly basis out of the interest it collects. Are we missing the point? Some €9 billion is already owed in interest that has not been collected. This group of loans are not paying for themselves. Already they are €9 billion behind. Why does the Minister believe that as of November, these people will start to pay their interest? They will not and they cannot because they have been unable to do it for the last year. If the banks cannot get their money I do not see how the Government believes it is going to get it because it is not available.

We are told that the loan to value ratio is an average 70%. Again, I cannot accept that it is an estimate and an average figure, 12 months down the line. The situation is probably much worse. I believe many of these loans have a loan to value ratio of 120%, 130% or 140%, certainly at the present value levels. If the loan debt is €68 billion and the estimates are €48 billion or thereabouts, we are now at a loan to value ratio of 140%. The Minister is citing a 77% loan to value ratio on the previous valuation, but that is just to massage the figures to make them sound better. He should have inserted "now 140%" and let people realise exactly what they are buying into. That is, 140% on the Minister's figures, given that the valuation of the property is 50%. I want to deal with that now because it is not 50%.

The Minister must be some type of genius with mathematics that he can come up with this, rent yields and every other formula, to try to show it is 50% of the valuation. It is not 50%. We all know that on the open market it is 13%, 14% or in some good places, 20% for development property. Development property and land is completely different to someone's house or a usable asset. It is an empty field, and its valuation is certainly not 50%. Therefore it is wrong to mislead the people that it is because it is not. It is as simple as that and we should not be making decisions on false information.

Even before the current valuations developers had loans of 100% or 120%. Those people will not pay back their debts. The Minister gives the impression that we are going to go after all this debt, and I accept some of the €54 billion might be collected. However, many developers set up special interest companies when they were buying the land and separated themselves and their personal assets from the concerns which bought it. Before we vote on this Bill, I want the Minister to explain exactly how many of these property loans can be chased up. I have a suspicion that many developers cannot be touched because of their special interest companies. They will be let go and the developer will stay in the big house with the big car while the poor little fellow will be struggling to pay a €300,000 mortgage.

The Minister must know how many of these loans are to companies of a special nature, or to others. The unfortunate small local builder who put up his own house to borrow money will lose whereas the big guys, the special few who had all the legal and financial advice they could pay for over the good years, made sure to separate themselves. It is wrong of the Minister to give us the impression that he can hunt them down for their personal assets. I do not believe he can do so and I want the point clarified because it is not clarified as matters stand.

What was the Government's relationship with the regulator? Was the regulator acting independently of Government advice or were he and his staff of some 200 linking up with Government and doing as they were told. Something went seriously wrong and I can see the hand of Government evident within that. It needs to clarified by the Government that its hand was not in it. If it was not, so be it, but if the question is not clarified, I will have to assume the regulator was acting according to Government policy, not independently. He acted wrongly, which we know.

A previous speaker stated that people need to be punished and that the average taxpayer needs to see somebody being held accountable. There is no sign of this as yet. There was quick dawn raid on Anglo Irish Bank and that was the height of it. I am afraid to say it but we will probably never see anybody in handcuffs or being made to take responsibility, which is a great shame and will damage this country for a long time. Nonetheless, people will lose their houses next year and the following year because they cannot pay small debts, which is very wrong. I want to hear where we are going in that regard.

I want to deal with the issue of a capital gains tax of 80%. The Greens intend to fix all problems in one fell swoop but NAMA is not concerned with this issue. I accept there is room to increase capital gains tax, but not to 80%, because the whole country will come to a standstill, if it is not at one already. This Bill will not fix every planning problem of the past. The Greens in their lovely speeches on the Bill spoke mainly about planning. While planning must be fixed, it is not the problem of NAMA, which is concerned with financial planning and corruption. It should remain focused on that area.

Although I do not have time to examine it in detail, I want to put on record that the Fine Gael alternative to NAMA is workable. Despite the Minister's puzzled look concerning it, such a scheme has worked and is currently working in many other countries, and it should be considered. A NAMA-type structure in France cost the taxpayer there over €18 billion in losses. In Ireland, the taxpayer has a potential exposure of €54 billion and, while I accept the Minister's point that we will not lose €54 billion, the potential does exist. I believe many of the assets are much more toxic than we are being lead to believe.

What the Minister proposes, based on the information he has given us, is immoral and wrong. He does not care, however, because he will be out of politics when the real consequences are seen in 20 years. The Minister of State, Deputy Barry Andrews, and I might still be here, and our children will certainly be here, when we see the real cost of this. The issue is very serious. It should not be dealt with as it is being dealt with in the House, namely, using false information.