Dan Boyle (Green Party)

This debate is something of a cart before the horse exercise in that the National Asset Management Agency Bill will not come to this House until it has finished its passage through the other House, but it is useful in its own right in the sense that the business plan is now part of public debate and this House is only right and proper to address it and those ongoing concerns.

The business plan is meant to be an exercise in public confidence. It is necessary that people understand how NAMA can and will work. I am not necessarily hung up on the details of the business plan. What is important from a Government perspective is that NAMA works, that money flows in the economy again and that our banks and financial institutions become viable entities once more. The question of whether NAMA makes a profit, breaks even or makes a moderate loss is an incidental concern in the wider picture, however much consideration is being given to it.

What I worry about - obviously, Government has a responsibility in this regard - is that debate centring around NAMA has become divisive. With the term NAMA and the introduction of special purpose vehicles, SPVs, it seems that if an acronym exists, it is intrinsically wrong and evil, and that does not help towards healthy debate. I participated in a public debate last night at the Leviathan group and while public debate is always useful, I am not too sure how the type of Pavlovian responses that are triggered by the mere mention of the acronym NAMA is helping public debate. It is clear there is widespread public concern and there are organised campaigns against the concept of NAMA. In a democracy, it is right and proper there be such questioning.

What is failing to be addressed in the debate is that there is no clear, consistent, cohesive, coherent alternative. The Opposition parties have their own proposals and they have obviously put thought into how they might work. However, if one takes the public debate involving the 45 or 46 economists who do not like NAMA, were one to place them into a room and ask what they would have instead, the likelihood is you would get 45 or 46 different responses. This is the difficulty in which the Government finds itself. There is acceptance that we have a problem with our financial institutions and there is further acceptance that it is a problem that must be got right if we are to restore a degree of financial solvency and viability in our economy, yet there is no agreement on what the solution should be if not the NAMA structure.

The responsibility of Government is to listen, adapt and amend. It is a process that has been done, however lengthily, as well as is possible. Senator O'Toole mentioned that the draft NAMA Bill was introduced in that form to allow particular amendments to be made prior to its official publication. That period allowed the concept of risk sharing to be introduced and the concept of the social dividend to be developed. These are constantly evolving processes.

I am somewhat disappointed in watching Committee Stage in the other House in that Deputies are making arguments as if what is being decided now is the end of a process. It is a continuing and evolving process that will involve this House. The eventual finished legislation will be a very different animal from the draft Bill that was published in July last. We should all be taking part in that process and take particular pride when it happens at the end of the day.

There are ongoing concerns about the premises on which the business plan is established, the fact that the benchmark is taken from the experience of a UK bank and that it is a narrow base for a benchmark. I take a view that there is a possibility, even a strong one, that prices will decrease further in the short term. They may go down by 10% to 15%. On the figures on which NAMA is established, namely, if there is approximately 1% inflation over the next ten years and there are no changes in the prices, we should recover our money, even if there was a 10% to 15% fall in prices in the short term, it is not unrealistic to think that a 2% to 3% average in inflation over that same ten to 15 year period will have exactly the same effect. We are talking about a medium and long-term approach to this problem.

The business plan which contains an element of exuberance - I was somewhat misquoted on the newspaper today - does not state that this will be a vehicle to solve the financial problems in this country. It states that if NAMA is profitable, the level of profit that can be obtained over this ten-year period is in the region of 1%. It is certainly not the type of profit margin on which anyone would set up a commercial business but it is meant to be, as I stated earlier, part of a confidence exercise for the people of this country on what will be the biggest level of expenditure on any particular project this country has ever undertaken. On those grounds we need those measures. However, we need a questioning of the basis on which the figures are reached and we need a constant analysis and a revisiting of those figures.

I am happy that the reporting mechanisms of NAMA seem to be improving as the Bill goes through the other House. We have a role to play in this House as well. Information is key over the next ten years. How will this particular agency affect the property market and the economy itself? Will it do so in a positive sense? If it does so in accordance with the real fears, that the winners are those who have contributed to the nature of this problem and those who are disproportionately benefiting from wealth in this country, then we will have failed as a political system and as legislators to ensure those occurrences do not happen. However, I am satisfied that at least those questions are being asked and mechanisms are being put in place to avoid them.

The difficulties we have with NAMA are only an element of the overall economic difficulties we face and while we need to get this right, we also need a common approach to our wider economic difficulties. The next three months will be vital, especially the budget on 9 December. That can only be informed by combating a narrative that the Government has been less than successful in combating, that there are those who have benefitted who have yet to accept responsibility for the nature of the economic slowdown and collapse that has occurred in our society. Until those actions are taken and until those signals are made, the idea of accepting the very difficult economic choices we must make and the unacceptability and implausibility that NAMA represents to many of our citizens will be a bridge too far. The Government and whichever Governments are formed subsequently will have to see through a NAMA process over the next ten to 15 years.

On those grounds the business plan is useful. It should not be taken as writ, but it shows the direction in which matters can go and offers the opportunity for further public debate to allow for the degree of public confidence that, unfortunately, is still lacking and needs to be put into the system in gaining public trust before the vehicle that is NAMA can achieve what we all hope it can achieve.