Nicky McFadden (Fine Gael)

It is nice to welcome the Minister for Finance, an Athlone man, to the Seanad. I know he is very proud of his Athlone roots.

Not being an economist, my priorities with this legislation are for the people I represent. NAMA's purposes are to recover as much money as possible for the taxpayer and to get credit flowing to small businesses. I do not believe, however, NAMA is the best vehicle for this. The Consortium de Réalisation, CDR, the French equivalent of NAMA established in the 1990s to purchase €28 billion of toxic assets from Crédit Lyonnais, incurred losses of €15 billion.

My other priority is that a home owner support scheme would be incorporated into NAMA. As my brief concerns social and family affairs, I am concerned about families facing repossession of their homes. NAMA represents a €15 billion gamble for the taxpayer. We will never know how it will pan out, yet every household in the country will be liable for €30,000 for this venture. It is outrageous that people through no fault of their own are now responsible for NAMA and its outcome.

The banks are having their bad loan books transferred to NAMA. The agency then, in turn, accepts this responsibility on behalf of the taxpayer. I am opposed to exposing generations of taxpayers to this sort of a risk. NAMA property values should be based on current market value rather than the long-term economic value. The sale of the Irish Glass Bottle Company site in Ringsend, Dublin, is a case in point. It is outrageous to believe we can see the future through a crystal ball and how all of these moneys will be recouped. The Nobel economic laureate, Professor Joseph E. Stiglitz, said the principle of overpaying banks for loans is criminal.

NAMA has been established not just to bail out the banks but also the reckless developers. Unfortunate home owners will not benefit from the agency, however. Fine Gael has tabled an amendment to section 207 to incorporate a home owner support scheme to protect families facing repossession of their homes, a proposal supported by the housing charity Respond. It aims to protect 35,000 families in mortgage arrears. The ESRI has forecast that by this time next year 200,000 families will face negative equity, whereby the value of their mortgage exceeds the value of their home. Fine Gael believes it must restore stability to the financial system and provide a mechanism to protect the tens of thousands of families facing repossession. I hope the Minister will be open to the amendment. When I raised the matter during Private Members' business last week, it was scoffed at.

Fine Gael believes people who own their homes to the market value of less than €750,000 should qualify for the support. The property would be their main home and residence. The mortgagor would be at least three months in arrears, be unable to agree a repayment schedule, therefore being subject to repossession, be able to prove loss of income and be able to show they have investigated repayment methods and used all facilities such as MABS. We propose that NAMA would buy the entire mortgage loan from the bank at the current market value and write down the mortgage loan to the benefit of the home owner. The home owner then would receive the remainder of the mortgage loan and pay a rental fee to NAMA set in line with market rents. A rent subsidy may also be available under the local authority shared equity scheme. The objective is to provide people who have shown a commitment to repaying their mortgages - we all know honest individuals who have never missed a mortgage repayment - with an opportunity to have a new arrangement with reduced payments that would be affordable and sustainable. We have baled out developers and the bankers. Why not bale out those who are in trouble and facing repossession of their homes?

The taxpayer has lost faith and trust in us as politicians and trust is the big issue surrounding NAMA. We are here to represent the taxpayer. To that end we must put in place strict codes of practice to protect the taxpayer against abuses.

Fine Gael has called for the establishment of a specific Oireachtas committee to oversee the operation of NAMA. The sum of €54 billion is the figure to which the taxpayer is exposed. The taxpayer must be protected and this special committee would oversee the operation of NAMA and ensure taxpayers' questions would be answered. In that regard, there would be accountability.

I understand the reason for having the special purpose vehicle, namely, that the debt would be off balance sheet but I do not understand why it is being set up without providing for any scrutiny and the reason it will not be subject to monitoring. The taxpayer's interest is paramount. That is all I am concerned about. The SPV should be regulated and the necessary legislation should be put in place to regulate it before NAMA is established. We need independent advisers to the committee. This legislation is all about trust and transparency.

Fine Gael has stated the Comptroller and Auditor General should be given powers to appoint somebody to monitor the private meetings of NAMA in the public interest. We cannot have a situation where the private conversations between NAMA and the Minister of the day are not subject to oversight by an independent person acting in the public interest.

NAMA will not work. It is not in the interests of the taxpayer but the legislation will be passed. I am not a fool. I know we do not have the numbers but I ask the Minister to accept the proposed section 207 which deals with support for homeowners and put in place strict corporate governance procedures to ensure we will not have sleepy regulation as was the case previously. We must move away from this and restore trust in politics.