Fidelma Healy Eames (Fine Gael)

I welcome the Minister of State to the House on our first day back in the Seanad. I hate to start by saying I was really disappointed with his speech and that he did not go into some of the detail of the guarantee being given by our taxpayers to the banks today. This measure is unprecedented in our history and the biggest blank cheque we have ever written. The Minister of State gave us no grace and the taxpayers of the country no information. The detail is needed, although I realise we will have more information when the legislation is published. It would have been nice to get something now and I believe the Minister of State has been briefed.

I am disappointed the Leader of the House did not grant us a lengthy question and answer period. This was unparliamentary as answers are needed. Why squash our allowed speaking time into ten minutes? What is the Minister of State afraid of? He must have the required detail.

This morning we learned of the State's guarantee of €400 billion for six Irish banking institutions. Nobody is saying measures were not needed because, clearly, if one of the big banks such as AIB or Bank of Ireland went under, it would have destabilised and threatened the entire economy. Essentially, the Government has now taken a domestic decision that represents enormous exposure for the taxpayer.

I heard various Members on the opposite sides of the Houses today blame it all on the international picture but such an argument is not true. Irish stocks are being hit badly for more reasons than what was occurring in the international arena because the market did not believe what the banks said. The banks spoke the language indicating they were fine but we now know the action required from the Minister for Finance in the early hours of this morning was a much-needed rescue plan. The Government acted because it had to.

Bearing this in mind, we have relief at this point. There are no free lunches and all loans will need to be repaid. What I want to know on behalf of the taxpayer and Fine Gael are the terms and conditions of the State guarantee. What has been achieved by the Government to provide a State guarantee amounting to €400 billion to six of our national banking institutions? This is huge, as it represents four times our national income in any year. The US Congress is having difficulty putting through measures that would amount to just 6% of one year's national income.

We must remember that it is ultimately the taxpayer who is providing the State guarantee to our banks. These are private banks which have speculatively loaned money and now need to be rescued. As I stated, we are all in agreement that some measures were needed but was this the best alternative at this time?

What is in this measure for the taxpayer? We must know the details of the insurance provided to the taxpayer and the types of fees which the banks will pay to the State for this guarantee. These fees should be punitive and the people and I hope the State makes money from it by giving such a cast-iron guarantee to our banks. The banks have been merciless with the people, as Senator O'Toole stated, when they decided to call in loans in the past. Now their very customers — the taxpayers — are bailing them out. Let us hope the State makes money.

I heard figures from various economists today indicating we could make up to €1 billion. We need to know exactly what we are getting from the banks in the course of the next two years. If hard cash is not available, it should be provided in the form of equity in the banks.

Before the Government gave this guarantee, what information did it have on the assets and liabilities of these banks? Are we covering bad loans that will never be recovered? Was this action a carte blanche without any quid pro quo for the taxpayer? I would not need to ask the Minister of State these questions if the Government addressed the matter upfront today.

Clearly, tighter controls must be implemented by the financial and banking regulators to prevent future bad practice and poor lending practices to individual borrowers and businesses. If there is not adequate regulation, there may be another false bottom in the economy, such as we have seen in the past two years. The Government and the banks have been warned by the ESRI and numerous Irish-based economists but those warnings were not heeded. The Government and the banks colluded to provide huge loans, in excess of 100%. What about the home owner, the first-time buyer who bought in the past two years? They are the ones who are really in trouble and are now experiencing negative equity.

I have heard talk from the CIF and from the Government today that measures would be included in the forthcoming budget regarding first-time buyers. The best measure is to do nothing. First-time buyers are bound to gain; they have no worries in a falling market. To intervene would hamper that. As has been advised by numerous economists, let the property market find its own levels. For too long it has been over-inflated and over-heated.

The Comptroller and Auditor General's report mentions public service pay and shows that €1 billion has been spent on overtime, weekend pay and allowances. What is the Government doing about that? This is outrageous. A sum of €1 billion represents one seventh of the budget deficit. Why is the Government letting this go on? I spoke to the Chairman of the Public Accounts Committee today and requested an investigation into that. Three quarters of that — €712 million — has been incurred by the HSE, with four individuals between them receiving and amount of €600,000. One person received €170,000, another received €150,000, another €140,000 and another €120,000.