Tony Mulcahy (Fine Gael)

I welcome the Minister of State. However, I do not welcome the Keane report and I placed that fact firmly on the record last week. The report, which took five months to compile, is farcical. I concur with much of what Senator Reilly said. Like her, I would be interested in obtaining some details with regard to Mr. Declan Keane and his background. Mr. Keane adhered to the brief he was given but he certainly did not endeavour to solve the problem of mortgage arrears in any way, shape or form.

I intend to begin by offering one or two solutions because there is a need for immediate action. I suggest that the Minister for Justice and Equality consider introducing legislation which would give judges the power to consider the requirements of borrowers when handing down decisions. At present, judges are only in a position to consider the needs of lenders.

Senator Zappone referred to the expansion of MABS and the creation of some sort of facilitator to deal with all debt. The domestic economy is effectively in a state of collapse. In the context of insolvency measures, we are discussing the need to deal with the problem as a matter of urgency but it took Mr. Keane's group five months to report. It has been stated that legislation relating to insolvency will be introduced in March. The Government will have been in power for a year at that stage. I do not know what the budget is going to contain, so we will be obliged to await developments.

There has been a great deal of discussion with regard to moral hazard, which only applies to certain individuals. Moral hazard did not apply in respect of major developers. Neither did it apply to bankers in the context of the decisions they made to lend people money. I have yet to see a developer or a banker holding up his or her hand and declaring "Mea culpa". Moral hazard also did not apply with regard to many of the people in these Houses who, through the Department of Finance, facilitated much of the lending that took place in the past. I have yet to see any of these individuals state that they should have put a stop to what was happening. They issued a report when it was all over but they had been warned about what might happen for the preceding 12 years. The action they took was somewhat late.

Reference was made to taxpayers being adversely affected. It is the latter who have been obliged to pay 30% more taxes. Many of them were also probably affected by the decision taken by the banks last week to increase business charges by 0.7%. If they have variable mortgages, then those to whom I refer will certainly be paying more money to their banks at this stage. Despite all this, these people are being referred to in the context of having a moral hazard. As I informed the representatives from New Beginning when they came before the Joint Committee on Finance, Public Expenditure and Reform, we need to keep people on the pitch for as long as possible. We must ensure that as many people as possible continue to contribute to the system for as long as possible. Unfortunately, I also include the banks in this regard.

The banks must allow people to remain in the game. In that context, a certain level of debt could be parked for a period of ten to 15 years. For example, 40% of a debt could be parked and the borrower could then repay 60% and some interest. The banks would eventually get all of their money back plus some interest. They will not obtain the exorbitant levels of interest they are seeking but they will get a certain portion.

Solutions will be required in the next three to four months, not the next two to three years. As I stated last week, prior to the summer those of us on the Government benches were obliged to vote against the Family Home Bill sponsored by Senator MacSharry. I must admit that I had grave difficulty in voting against that legislation. Why is it not possible for those in government or Mr. Keane to engage in discussions with New Beginning and other interested parties? Why is it not possible to bring them and Mr. Richie Boucher and the new head of AIB, whenever he or she is appointed, together in order to find a solution to this problem? Legislation is not required in order to encourage people to discuss and resolve particular matters. However, we must find the solutions to which I refer quickly. If we do not and if we continue down the current route, there will be very few people left who will be in a position to pay their debts. The way the domestic economy is going, there will soon be no money to pay the wages of nurses, doctors and Members of these Houses. That will leave us in a right fix.

If people become organised and decide not to repay their debts or whatever, the country will be faced with a real problem. That reflects the gravity of the situation. I suggest that we make decisions as quickly as possible. I read the Minister of State's script and much of what he said is extremely strong. I also read the statement made by the head of regulation at the Central Bank, Mr. Matthew Elderfield, at a recent event in Cork. I am of the view that Mr. Elderfield needs to do more than just make statements. I do not want to know what he has to say, I want to know what he intends to do. I will certainly want to know, by the time the budget is introduced, what the Government proposes to do.