David Norris (Independent)

I welcome the Minister of State to the House. There is a crisis of confidence. The public are a bit shell shocked and they have no trust in the banks. I do not agree with much of what this Government is doing, but at least there is some degree of comfort in the fact that we have, in the Minister for Finance and the Minister of State, two very professional, intelligent and competent people. There are some errors in this, but I may very well be wrong and they may be right. I hope that is the case.

The Minister of State referred to targets and assumptions, and that is part of the weakness of the case because the financial figures are not spelled out in any great detail. Owing to the methodology employed, it is not even possible to do so at the moment. Unlike Senator Doherty, I got a copy of the business plan. It was not in the fiction section but in my pigeon hole. I thought that if I presented it as a private individual to one of the banks, the bank would not be likely to give me the €54 billion. The sums are so staggering in this case that we need to be very careful.

The Minister of State said that definitive figures will not be available until NAMA has had the opportunity to assess in forensic detail the loan books involved. Why did they not go straight in, seize the books and examine them immediately? Who the hell are these people in the banks? They have been irresponsible and stupid and they have helped to propel us, with some assistance from the Government, into this situation. What happened to the idea of reckless trading? I have been a board member of a number of companies, all of them profitable, but I never took a penny out of them. On a couple of occasions, I had to warn the other directors that reckless trading was a criminal offence. Why is nobody being prosecuted for this? What these people have done even goes beyond reckless trading, yet they are still sequestering their assets abroad. They are disappearing with large amounts of taxpayers' money which has been pumped into entities such as Anglo Irish Bank.

We are also in a situation where the Government's figures have been provided by the institutions themselves. There is a story in today's newspapers about a doctor severely censured and nearly removed from the medical register precisely because he supplied inaccurate information about himself. Nobody would rely on information supplied by those in the dock without any real investigation or cross-examination.

The Minister of State talks about figures of €77 billion and €54 billion, but many people are suggesting that the write down will be 50%, making the second figure €38 billion. There is a big gap and it is the taxpayers who will have to pay for it. The Minister of State claimed that the recovery in asset prices required for NAMA to break even is only 10% over ten years and that this is an achievable target. It is an achievable target, but it also may not be achieved. To use the market analogy as we hear it every day on the radio, investments can go down as well as up. This plan projects a small but steady inexorable rise, but this may not happen.

I honestly do not know why Anglo Irish Bank was rescued. A total of €4 billion was shovelled down that black hole. Will Mr. Fitzpatrick's loans be provided for? Will he get anything out of this? I do not want to be personal or to impugn people but I do wonder.

I have a file of emails from individuals that is about an inch and a half thick. These people are really concerned and some of them work in the accountancy profession and the financial world. Professor Joseph Stiglitz is a Nobel prize-winning economist, adviser to the Clinton Administration and so on. He said of the situation here:

[T]his bank bailout is a simple transfer from taxpayers to bondholders, and it will saddle generations to come. The only thing that might give you solace is that, as chief economist of the World Bank, we see this type of thing happening in banana republics all over the world. Whenever a banking crisis happens, the financial sector uses the turmoil as a mechanism to transfer wealth from the general population to themselves.

That is a rather chilling statement to read, but it comes from somebody who needs to be listened to.

Let us look at the loans and mortgages in particular. About €148 billion has been given out in 650,000 loans. Estimates vary, but the projections are that between 200,000 and 350,000 people will be in negative equity in the next year or two and may not be able to repay these loans. What will happen to them? While we are massaging the bankers, what about the ordinary people?

I have received a submission from the Free Legal Advice Centres, which provide an excellent service. According to the submission, approximately 350,000 people will be in negative equity by the end of 2010 if house prices fall by 50%, which could happen. The Free Legal Advice Centres speak glowingly about the Money Advice and Budgeting Service, which I have spoken about previously in this House. The Money Advice and Budgeting Service is under-funded and over-subscribed. Is there any plan to provide extra funding and resources to the service? Given that we have cut back on all the supports for the most vulnerable sections of our community, it is absolutely essential that we prop up the Money Advice and Budgeting Service so people can get good advice. I appeal to the Minister for Finance to do that.

In a recent newspaper article, a former Member of the other House, Mr. Ivan Yates, made an interesting observation about the NAMA business plan when he suggested that Mr. Justice Peter Kelly or Mr. Justice Frank Clarke would "give it the same treatment as Liam Carroll's Zoe business plans". Mr. Yates suggested the estimates contained in the business plan are wildly unrealistic. I have previously, in the presence of the Minister of State, described the contents of the banks as "flubber", or a volatile green substance that cannot be quantified. At least we have some headline examples. The value of the former Irish Glass Bottle site in Ringsend has reduced from €413 million to €60 million, for example. The value of the aforementioned Zoe Group has decreased from €1.3 billion to €300 million. That is what the market is telling us. We have to bear that in mind when we are looking at the situation. In light of the under-funding of the Money Advice and Budgeting Service, I find it extraordinary that we are budgeting for €2.64 billion for the bureaucracy of NAMA. I would like further detail on that, if possible. Who are the people involved? Have any names been mentioned in this regard? Are there specific instances of salary? Why is this expenditure required?

We need to reflect on the functioning of the market, which is often invoked when people speak about NAMA. The banks that are not included in the NAMA scheme have formed a separate entity - the Asset Resolution Corporation - and will go to the market themselves. The Minister of State will be aware of the plan to provide for a haircut of 30% under NAMA. The market, in the case of the Asset Resolution Corporation, is providing for a haircut of between 40% and 50%. I suggest that the Minister for Finance should have a similar target. I would like some specific information on the NAMA valuation methodology. What methodology was used to arrive at these circumstances? We have heard a lot of nonsense from the Fine Gael leader, who has said that a referendum on the future of the Seanad would solve the problems of Ireland. What rubbish. It would be much more important to have a referendum on NAMA, which will cost €54 billion, because we will all be in debt forever if it does not work. If we are to hear the views of the people about the Seanad, we should also have a referendum on NAMA.

I would like to ask some specific questions. What evidence, if any, does NAMA have that the current market price of property and land is the correct price to pay? What evidence does NAMA have that the current market price will not decline over the coming years? Why would the temporary nationalisation of the banks be a bad thing? In a proposal that pre-dated the Government's NAMA plans by two months, I advocated the establishment of a national property management agency. The Minister of State, Deputy Mansergh, who is a good country man like my ancestors were, might approve of a slight tweaking of the NAMA proposal that I would like to advocate. Some of this country's major centres of population are surrounded by huge land banks. At a time of high unemployment, I suggest that some of those lands should be divided into allotments for the use of the unemployed. Such people could be given a small range of seeds, implements and manuals. If we get them out of the house in this way, we might lead them out of depression. If we employ them productively in the growing of food, they may be able to supplement their incomes and improve their diets. Why can we not have an independent analysis of the whole NAMA question?

I wish the Minister, Deputy Brian Lenihan, well and hope his plan succeeds. I am concerned that these assets will be disastrously overvalued because no proper method of valuation is being provided for. I am concerned that Professor Stiglitz's prediction that there will be massive transfer of wealth, from those least able to afford it to the bankers, will come true. It is right that the main bankers, as opposed to bank employees, are held in contempt in this country. I listened at lunchtime to a report about the Irish Bankers Federation conference, which took place this morning at a luxurious Radisson Hotel somewhere in Dublin. I was struck by the comments of a banker who said that the grieving period is over. That might be the case for the bankers, but I am afraid it is only beginning for the people.