Larry Butler (Fianna Fail)

I welcome the Minister of State. It is important we introduce legislation at the earliest opportunity to get NAMA up and running. We all agree our banks are not functioning properly. Complaints are made by every sector of business about the unavailability of credit and we cannot sustain further delay in this regard. I am glad the Seanad will return over the summer to deal with this legislation.

However, we must also be prudent in ensuring we are careful in preparing the complex legislation required for NAMA. The Labour Party and other commentators have proposed nationalising the banks, thereby putting taxpayers at greater risk. I do not understand where they are coming from because nationalising banks will require taxpayers to assume all the risks. What about the people who invested in banks to fund their pensions? The Government also has a responsibility to these people. It is important, therefore, that we do not nationalise the banks. It is fair to say that nationalised banks do not work well.

The Government's investments in the banks have recouped €1 billion in profits in the past week alone. I do not think anybody has picked that up. It will recoup a further €500 million from the bank guarantee scheme. The Government has made wise investments in this regard.

In ensuring NAMA works for the benefit of the country, we must ensure it does not put people out of business. Its function is to take non-performing loans from the banks to allow them to do what they do best. Once it is established, it will have to ensure these non-performing debts are made to work. One of the better ways of doing this is by working with those who have invested in the properties concerned. It is a given that some developers will be unable to remain in business but if we want development in this country to continue, we will have to work closely with them. It is not the function of NAMA or the Government to put people out of business. On the contrary, it is vital we keep them in operation.

Previous speakers have referred to land values. Land will always remain a valuable commodity. It is a particularly scarce resource in urban areas. It is important to bear in mind that 30% of the land in question is located overseas. I recently spoke with a UK based businessman who is familiar with property matters. He is of the opinion the property business has started to move significantly. That is an encouraging sign in terms of NAMA's potential for making profits. Even though land may be cheaper, the cost to build per square foot is not much lower. A company might build a 2,000 sq. ft. house a little cheaper but the cost of materials has not reduced substantially, which is an important issue.

As we become land holders, Senator Hanafin is correct that we must examine the stamp duty implications. It is important to do so to encourage investment and demand. Many people are staying out of the property market and not even changing houses, as they normally would for many reasons such as increase in the size of the family or the house becoming too big for them, leading them to trade down. However, 2% of something is worth more than 100% of nothing. The market is not performing and it must be encouraged to grow again.

The agency must be careful when writing down the toxic and bad loans. If they are evaluated carefully, it will go a long way to ensure NAMA's success in the future. Before the agency is set up, will the Minister ensure monthly reports are issued by the Government-nominated directors on the boards of banks regarding lending to small and medium-sized businesses? They are being squeezed and while taking two or three months to enact the relevant legislation may not seem long to us, it will probably be the difference between a company staying in business or going out of business. If that is not taken into consideration, many more people will be on the dole, which is not the Government's function. Our function is to create jobs and NAMA represents an opportunity to ensure our land bank works for us for the future.

I commend the Minister's proposal. Senator MacSharry provided an extremely good outline of where we are going with NAMA. I did not have an opportunity to attend the meeting of the Joint Committee on Finance and the Public Service earlier but he is convinced it is the way forward. Senator Quinn, who is a respected businessman with a great deal of experience, is also convinced this is the correct way to go.