Dan Boyle (Green Party)

The National Asset Management Agency Bill is the most significant Bill the Houses of the Oireachtas have had to debate for many years. It is era-defining legislation. In fact, it is an era-straddling Bill. It brings to an end the Celtic tiger period of prosperity when our economy improved to the largest possible extent in our political history. It also deals with many of the excesses of that period that have made us consider a Bill that otherwise we would prefer not to introduce.

As other Senators have indicated, it is the essence of political leadership that Government makes proposals which are seen through and debated in both Houses of the Oireachtas to ensure the vehicle that results is the best possible one. I share in the support expressed for the Minister in the process we have followed since last July when the draft Bill was published as a consultation document. Changes followed before the official version of the Bill was published and the debates that took place in the other House resulted in the acceptance of many amendments. The last stage is the debate in this House where consideration has already been given towards a further refinement of what needs to happen. As part of that process there has been already much discussion on the available alternatives. Although I share much of the uncertainty of every Member of both Houses about our future in terms of whether NAMA can and will work, a number of measures have made me more confident and allowed me to give my personal support to what is being proposed.

The National Asset Management Agency is more likely to work than the alternatives that are available to us. The difference between the NAMA approach and the other approaches, namely, nationalisation, whether full or partial, full recapitalisation or the irresponsible default process that has been suggested, is that with most of the other approaches the capital is needed immediately and the cost of that will be carried by the taxpayer. In addition, the capital repayment of that initial infusion of funds will only come about after an uncertain period of time with an uncertain result ensuing. With NAMA, there is a cap on the amount of money that will be put in. There are mechanisms for how most of that money will be made up in the form of the value of the assets that underpin the loans, the risk sharing element, the value of the shareholdings in the financial institutions and the tax surcharge. On that basis I am confident that even if a loss ensues after ten years, the role of the taxpayer as a result of this Bill, in forming this agency and in dealing with this problem, will be dealt with by the institutions becoming viable and becoming the engine they must be for a more prosperous economy in the future.

With regard to the proposals being made, especially the tax surcharge, the Minister has been most forthcoming in responding and amending the Bill in ways my party believes have improved it. The issue of whether there should be a tax surcharge or a bank levy has been most prominent in recent debate. While a bank levy has more attractions and a great deal more certainty, there is not a great deal of difference as to what both will achieve. Senator MacSharry raised the need for more clarification as to whether the surcharge can apply in situations where some of the institutions might not be profitable after the ten-year period. If we are talking about the profitability of the banks after a ten-year period, we are already conceding that we believe there is a possibility that NAMA will fail, and to a significant extent. I am very confident profitability will be restored.

Senator Harris asked how we can make best use of that profitability and how the funds can be redirected. I do not see it as a punitive measure. We must put in this Bill the legislative means by which the financial institutions, after receiving this rescue, which is probably a better word than bail out, can be shown to repay the taxpayer in the fastest time possible. There is a further change in the tax surcharge that I favour inserting, and the Minister might consider it. There is a difficulty with the question of contingent liabilities, and this is why the bank levy was seen to be the less effective vehicle. I do not foresee any difficulty if, before the ten years are up and the banks are seen to be profitable, an element of the reserves that are produced by their future profits are put aside in the event of being called upon after ten years. I would not consider that a contingent liability and it would mean we would not have to wait until ten years for the banks to be making profits as we could see the progress in the meantime. If such an amendment can be framed, I believe it would improve the Bill further.

With regard to the windfall tax on rezoning, some have chosen to make mischief about this proposal which the Green Party put in place. This is not proposed as a revenue-raising measure. It will stop the excesses that were brought about by the type of open conspiracy we saw over the past ten years between banks, builders, developers, auctioneers and solicitors. It will ensure land and the planning system will be used properly in the future. The measure is meant to be a disincentive, not to raise revenue. The real question we must ask ourselves is how NAMA will work in the future. This Bill will not solve all our problems. It is quite likely that in the ten years there will be further amendments as we see how the process moves forward. There will be changes in various Finance Bills, in company law Bills and, in particular, in planning and development Bills. We must see this as a process that will be followed and improved as time passes to meet the uncertainties several Senators have mentioned.

The central aim of this legislation is to ensure lending to small and medium enterprises. There is still a great deal of uncertainty about this. Some of the amendments the Minister made to the Bill and which he intends to refine further seek to address this issue because it is at the core of what it is hoped NAMA will achieve. The same problems would exist with any other of the alternatives available to us, particularly nationalisation. The difficulty for the Minister is that he cannot direct, but I believe he can specify. Some of the approaches he has taken will go some way towards doing this. The hope is that the size of the amount of money being made available will itself be the lending instrument that will get our economy to grow. Again, however, this measure must be kept under scrutiny. The accountability measures that have been put in place, especially the Oireachtas committee, will help in this process.

Questions have been asked about the assessment method. I have put some concerns on record. We need not see NAMA as something that is starting from a year zero approach, if Members will pardon that analogy. The property market is still in a state of fluidity. It is three years since the height of that market and there is a possibility of a further decline in property prices. However, despite much of the debate that has taken place about the figures in this Bill and in the business plan for NAMA, the figures are still relatively modest, even in the event of a further decline in the property market. There is a ten-year period involved and traditionally the property market has worked in seven-year cycles. The proof will be in the pudding. What is important is to have the mechanism in place to see if and how it is working and, if it does not appear to be working in the short term, to see how it can be refined.

The question of long-term economic value has bedevilled this debate from the start even though an individual who purchases a house does so on the basis of long-term economic value.