Rónán Mullen (Independent)

Ba mhaith liom fáilte a chur roimh an Aire. Tréaslaím leis mar is léir go bhfuilimid i sáinn. Is léir go bhfuilimid i sáinn sa tír seo ó thóg sé faoin obair san Roinn Airgeadais measaim, fiú na daoine nach n-aontaíonn leis amanna, go mbeadh daoine faoin tuairim go bfhuil an-obair ar siúl ag an Aire, agus gur mhór an tuiscint atá aige ar na rudaí a bhaineann le cúrsaí na géarchéimeanna seo agus bealach réalaíoch tuisceanach á thaispeáint aige agus é ag tabhairt faoin ábhair seo i gcónaí sna meáncumarsáide ach go háirithe. Nuair a thugaimid faoi deara, is dócha, an fadhb a bhaineann le muinín ag am mar seo, tá sé an-tabhachtach go dtuigfeadh daoine sa phobail go bfhuil tuiscint ag na ceannairí sa sochaí agus ag na polaiteoirí ach go háirithe agus measaim go bhfuil moladh ar leith tuillte ag Aire ar an am seo.

In welcoming the Minister to the Seanad he deserves a particular tribute because of the approach he takes in dealing with these issues. Confidence is extremely important at a time such as this. While there is still great fear and people have grave doubts about Ireland's future, it is fair to say the Minister has taken to his brief with particular enthusiasm and also with a measure of ability. I do not mean to flatter him unduly in saying this and know he is so modest he can hardly bear to listen to it. Nonetheless, he is deserving of credit and praise because he is dealing with an unprecedented crisis and brings undoubted skills to the task.

It is not for me to provide an in-depth analysis of how exactly the economy developed financial gout, or precisely why further debate was needed before the blueprint for NAMA was devised. Such tasks are outside my area of expertise and of limited value, as the debate on Second Stage of the Bill is well under way. I propose, however, to offer in passing a general and, I hope, fair-minded critique of the NAMA project and perhaps point to a more specific problem in the Bill's provisions, before supporting a more radical interpretation of the agency's task which, if practically undertaken, would confer a benefit on a society to which the banks are indebted in more ways than one.

I take issue with an attitude that is pervasive in some quarters which supposes NAMA is the necessary response to the financial crisis. It should not be forgotten that Britain and Germany offer two alternative responses which differ significantly from the NAMA proposal. According to the British multi-track approach, the state takes shares in banks. For instance, the British state owns 83% of Royal Bank of Scotland and has put in place an insurance scheme, whereby the banks will take the first hit in relation to bad losses. At a point where such losses exceed a certain threshold the state will intervene to insure the banks.

The scale of the task facing NAMA was not remotely envisaged at the time of its inception. While it was a sign of real intellectual integrity on the part of the Minister to set out the assumptions underpinning the NAMA philosophy, unfortunately, the weight of evidence suggests the NAMA initiative will be a drag on the economy well beyond the project period. The three core assumptions, each with its attendant risks, are: property prices will recover by 10% in the run-up to 2020 - an optimistic assumption considering that the value of commercial property, in particular, is downtrodden; some 40% of NAMA properties will still produce cash - I wonder whether this is not contentious when one looks, for example, at the near term projections made in Bank of Ireland's recent six-monthly report; and that there will be a 20% write-down - it could conceivably be even more than this.

In effect, we are paying over the odds for skills which are supposedly at the heart of banking. I understand we are paying €2.5 billion in consultancy fees. As Professor Ray Kinsella has pointed out, that is one fifth of what it takes to run the HSE in a year. The lack of core skills in delinquent banks was not universal, but tragically sincere and reasonable voices of concern were not listened to and, as we all know, the price has been enormous. Banks have not changed their business model; therefore, it makes no sense to me why something with such a malign business model should, in effect, be resuscitated at enormous cost to the taxpayer. However, we are where we are and there is no point in pining for an alternative reality. I accept the arguments that have led the Government to this point.

Turning to the proposed legislation, like others, I am not entirely clear why the mechanism of special purpose vehicles, SPVs, which are highly specialised, problematic and have a difficult history - they were widely used by Enron, for example - is being adopted. Apparently, it is because of the requirements of EUROSTAT. What is at issue, however, is not the statistical niceties but the transparency of the balance sheet of Ireland. Our reputation for transparency could, perhaps, stand to lose more ground by the dichotomy in the public finances through the creation of an esoteric vehicle just to satisfy demands as regards the appearance of the balance sheet. Many do not understand why this approach is being taken.

There is a good deal of talk about regulation, justifiably so. However, more than regulation is needed if we are to address the social cost of rampant corporate greed and short-sightedness. What is required is a more radical deconstruction of the modus operandi of the NAMA project, perhaps a different model favouring all stakeholders. NAMA has an economic mandate, yet on another level it should have a social mandate also. It is perhaps the necessary response to delinquency in the financial and banking system and could leave us with an enormous financial cost. We must also see it as something which has a profound social mandate because the financial and economic delinquency that led to the necessity of establishing NAMA was born of a society that had become wounded by avarice and individualism. NAMA should seek in some way tor respond to this reality also.

I offer vocal support to the idea that we, as legislators, are obliged to look for a social, not just a commercial, dividend from NAMA. The allocation of land for the provision of amenities and sheltered housing should perhaps be specifically included as part of NAMA's remit. NAMA is to buy loans, land and property, etc. at a discount. Its mandate is to maximise returns by selling these assets for as much money as possible. However, this crisis provides an opportunity perhaps to obtain desperately needed low-cost housing for those worst affected by the economic crisis. Specified service providers could offer important social uses for a portion of NAMA's assets. Preferential treatment could be given to bidders with a proven track record in providing social and charitable services. I am suggesting there is a chance to bequeath to the next generation a social legacy, instead of the risk of a social and financial millstone. The community dividend could incorporate sheltered housing, playing fields, amenities, community centres and so on.

Is it naive or excessively idealistic to talk in such terms? Surely an honest appraisal of how we got ourselves into this position is needed, as well as of the irresponsibility that led us to this crisis which some may have foreseen but which the entire apparatus of the State, politicians and civil servants alike, was unable or unwilling to prevent. We cannot be overly confident in the light of the events that have led us to this point about the capacity of civilised societies to avoid remarkable errors and injustices, for which the taxpayer now has to suffer. With that in mind, it is all the more incumbent on us to give fair consideration to imagining ways in which matters might be different. If, in response to the consequences of irresponsible banking, we take an approach to NAMA that is driven excessively by purely financial and profit-making considerations, speculation about the likely increase in property values and even the creation of special purpose vehicles to hide certain realities from the balance sheet, it will look to many worryingly reminiscent of the evils that brought us to this point. I recognise, however, that practicality is needed in dealing with the challenges we face but perhaps we should learn the lesson that our response needs to be tempered and informed by an approach that is not just scientific, fact-minded, positivistic, devoid of values and conscience and marked by a profit-at-all-costs mentality. Rather, we should seek to inform NAMA through an approach that seeks to rectify some of the social ills to which this delinquency in the world of banking and finance has contributed. Our response, therefore, needs to avoid the intellectual and cultural pitfalls of the past and set new directions in social responsibility and community-mindedness.

I commend the Minister on his great talents and the ability and sincerity he brings to his role. I defer to his wisdom and that of the Government in their approach but I remain convinced that there is a need to approach this issue with a profound social concern that seeks to maximise the potential of NAMA, not just for economic recovery but also for social recovery by facilitating organisations and initiatives in the way I have described.