Liam Twomey (Fine Gael)

I move amendment No. 1:

To delete all words after "That" and substitute the following:

"Seanad Éireann declines to give the Bill a Second Reading on the grounds that:

(i) the Government has published neither the Bacon report that underpins the NAMA proposal nor any proper analysis of this enormous initiative in terms of

(a) the enormous risks for taxpayers of using a dubious and politically influenced valuation methodology to pay for €90 billion assets of highly uncertain long-term value;

(b) the growing doubts regarding its impact on bank lending;

(c) the growing concerns from creating a secretive, politically directed, State managed, tax funded work-out process for 1,500 property developers, and

(ii) the figures in the draft business plan are not credible and have not been backed up by rigorous analysis.".

The debate on the NAMA legislation is taking place without any serious debate in either House of the Oireachtas on any other proposals to deal with the crisis in the financial sector. The Minister's remarks do not add much to the debate when he is critical of other political parties and their proposals. He may hold firm that NAMA is the only show in town and even though we do not necessarily agree with him, we will do our job as legislators in both Houses of the Oireachtas. Nobody will get any pleasure if this measure fails and the economy suffers subsequently. Nobody will get any pleasure from saying to the Minister, "I told you so," if anything goes wrong with the financial services sector. We are here to try to make things work. None of the Minister's experts is infallible. The Minister is not infallible, neither is anybody on this side of the House. Many of the same experts and Ministers who were telling us the economy was booming only a short while ago are the very ones who are now telling us that this is what we must do to save our bacon. We have landed ourselves in an unbelievable crisis because nobody is God in this country. Repetition is not bad, as the Minister wells know. We have often changed our outlook on many issues by constant repetition of debates, not just on what happens in this House but also outside it. Repetition can make us change our minds.

I want to deal with three specific issues. When the legislation is finally passed, I ask that the Minister refer it to the President immediately for referral to the Supreme Court. It must be examined by the Supreme Court because of the specific powers granted in the legislation in regard to private investors and the SPV and because of the powers the Minister will have over it and its assets. The legislation must be examined by the Supreme Court because constitutional, commercial law and property ownership issues arise. The powers of the Minister under the legislation must also be examined by the Supreme Court. I accept that the Attorney General has dealt with these issues but the certainty of a Supreme Court judgment would be vital before we start using the legislation.

We must also bear in mind the concerns of banks which are not participating institutions. The size of NAMA is also an issue. There is the issue of the State owning vast amounts of development land for ten years and the potential distortion of the market. It could be said it was that distortion by a small group of private individuals owning large tracts of development land that got us into this mess. There is, therefore, a need for us to be more open in this discussion.

There are major difficulties with the legislation which cross financial, socio-economic and planning issues. They are worthy of detailed debate but when the debate which may be repetitive is concluded, the legislation it should be referred to the Supreme Court to validate it on behalf of the Oireachtas and the people.

There are major political concerns associated with NAMA. There are the obvious political concerns about its structure and functions, the potential conflict of interest, the perception that the banks are getting a bail out and that developers are being let off the hook by ordinary individuals. Taxpayers can see this in two ways. They can see it in the way the Minister would like them to see it - forgive and move on, but many also want retribution because of the mess the country has been landed in by developers and bankers. So far the public sees the banks in a business as usual mode. That is not good from a political point of view. If the bankers feel untouchable, to some degree developers are not much worse off.

In the course of the debate since it began in the past six months there has been much macho grand-standing on the part of Ministers that the Minister for Finance will go after developers for every cent but that has been exposed as a hollow threat. The Minister cannot touch the personal or business assets of a developer if they have not been used as security for other assets that will end up with NAMA. Furthermore, NAMA will not have access to the Revenue files of the 40 to 50 individuals and others who brought the country's financial system to its knees. Al Capone remained untouchable in the city of Chicago until the revenue boys went after him. If the Minister were serious about being tough in addressing what is going on in the financial sector and the people who landed us in this mess, he would have some role for Revenue in terms of the way NAMA will operate but I do not see such a role. There is no clear role for Revenue in regard to what is happening. The Minister knows what I am talking about because many developers have managed to put away certain assets that will allow them to come back into business once the heat over NAMA has died down.

There are parallel political concerns that are just as important to the public's acceptance of NAMA. I will only mention a few because many others will discuss them. There is the issue of distressed home loans and the threat of repossession for 35,000 home owners. There is the issue of fixed mortgages, to which nothing more than lip service has been paid by all Government representatives in the House in the past few months.

There is still the serious issue of banks withdrawing overdraft facilities from small and medium-sized enterprises, a matter on which the Minister must be strong. He must not say he will do this or that. He must be extremely strong on the issue because senior management in the banks has instructed individual branch managers that they will be held responsible if they stand up for small businesses looking to have their existing overdraft facilities continued. This issue is not about the banks lending in a recession but about them reducing their overdraft facilities before they are fully audited by NAMA. Banks see overdraft facilities as loans. They want to reduce overdraft facilities in order that they will be seen to have lower loan figures when fully audited by NAMA. This is a clear case of the banks trying to make themselves look good with no regard for the consequences for the businesses involved. Every Member of this House and the Lower House is in direct personal contact with a huge number of people on this issue. The Minister is the one who will need those businesses. If cashflow problems close businesses, the Minister is the one who will end up paying for it through increased unemployment benefit payments and there being fewer at work resulting in him losing out on income tax. There is a need for the Minister to deal seriously with that issue of overdraft facilities for small and medium-sized enterprise, not merely to state he will insert something into the legislation on Report Stage. He needs to do something about that.

There has been much talk on the legislation about social capital and the way NAMA can be used to influence local issues and small businesses, and I want to raise with the Minister another issue, which is not strictly related to NAMA but at which he might look. Often companies tendering for Government projects are requested to have a minimum turnover before they apply for a tender. Would the Minister give consideration to the proposal that maybe there should also be a maximum turnover outlined? Some of the very big companies are competing with small local companies for what normally have been considered small Government procurement projects and maybe the tender process should include not just a minimum turnover but also a maximum turnover to help small companies survive in these more difficult times and compete with bigger operators.

I raise another political consideration to legitimise NAMA in the eyes of the general public. Last Thursday night I proposed that shares in NAMA's SPV could be sold to the citizens of Ireland along the lines of the national loan bonds of the First Dáil. This would allow every citizen to own NAMA. The Minister's response that night was insulting to taxpayers who are paying for this enterprise. The Minister for Community, Rural and Gaeltacht Affairs, Deputy Ó Cuív, came in here and stated the board of NAMA would prefer large institutional investors. To some degree, that gives the sense that the privileged few continue to be the ones first and foremost in the mind of the Government. The Minister, Deputy Ó Cuív, also stated that the ordinary man and woman does not need to get burnt by investing in NAMA. He clarified this remark by stating that many individuals in Ireland who do not have vast resources were burnt by investments they made during the course of the Celtic tiger, and that would be a reason they should not invest in NAMA. That is demeaning to the intelligence of the average Irish man or woman.

He also stated that setting up a scheme such as what was done for the privatisation of Eircom would delay the setting up of NAMA. If the Minister, Deputy Lenihan, wants something that is truly democratic, that is inclusive to the Irish people who are paying for this and that gives an opportunity to every citizen to decide whether he or she would like to be part of this, he could look at my proposal to see if it could work - in fact, he could make it work.

Like any Irish citizen, I understand the concept of risk. I have been burnt by what happened in the financial services sector in this country. The Minister is putting his confidence in this and is saying this will work, but we all know it carries a certain risk. If he really wanted to legitimise this SPV, NAMA and this rescue plan in the eyes of the people, let them own it and be part of it. If the Minister persists with this approach to rescue the financial service sector, it might do him no harm in the long term if the Irish people also feel they have a role to play in this.

We need to review constantly the political aspects of NAMA. The Minister for Finance can dismiss the need for repetition and dismiss other parties' viewpoints-----