Jim Walsh (Fianna Fail)

Cuirim fáilte roimh an Aire Stáit go dtí an Teach.

I drafted my Adjournment matter about two weeks ago but it has been overtaken by events yesterday. In that regard, I welcome the publication of the heads of the Bill to deal with this fairly intractable problem. The 12 year bankruptcy provisions we have are the most onerous in the EU and are very punitive. They apply to a different era and are badly in need of updating.

I am glad personal insolvency has been included. There is now real urgency about tackling the personal debt issue and this is an attempt to move in the right direction. We are three and a half years into the financial crisis and many people have been struggling during that period. It is time that people saw some light at the end of the tunnel. We have been addressing the question of the banks being bankrupt and it is time we addressed personal indebtedness and bankruptcy.

A presentation was made to us last week, with which the Minister of State might be familiar, by the CSO and Oireachtas Library and Research Service. They showed that there is a huge problem in the 30 to 39 year old age group, which has negative equity of €7.1 billion. The next highest category is those aged between 40 and 49, which has negative equity of €2.1 billion. The figures show where the concentration of this problem lies. The Minister said this is not a negative equity issue, rather it is about indebtedness and the capacity of people to be able to meet it, which is an important point.

I am moving between the mortgage side and the individuals who have given personal guarantees to banks. Many have gone to Britain, where the bankruptcy provisions are more lenient, and dealt with the issue there. That is not good for a number of reasons. We may be losing people to other jurisdictions who in the past have had very good credit and entrepreneurial records and created many jobs in this country. Given our population size, it is important that the coterie of people who found themselves blown away by the current global economic downturn are in a position to re-enter the business market here. We need to concentrate on ensuring that happens.

In doing that we have to be mindful we are balanced because the interests of the taxpayers, who are funding the banks, and moral hazard have to be taken into account. Having said that, if we do not have a proper functioning economy with business leaders who will drive we will not have growth or be able to deal with the sovereign debt issues. The issues are interlinked and we have to deal with them in a sensible way.

We have to be cognisant that this is the greatest downturn any of us have ever seen in our lifetimes. To a great degree it replicates what happens during the Wall Street crash and Great Depression in the 1930s. That puts the issue in context. We cannot and should not, from a moral point of view, bail out banks which acted irresponsibly and put all the blame on those who perhaps borrowed irresponsibly.

I welcome the reduction to three years, which is significant. I suggest the period should be between one and three years and that judicial discretion could be exercised because of the unprecedented position we are in this. If we were in normal economic times I might suggest a period of between two and five years but we need to address the current crisis.

There needs to be absolute discharge. One cannot have an overhang where the Revenue Commissioners can look to be paid back or a person is charged for the cost of bankruptcy. I have seen nothing in the heads of the Bill to deal with the exorbitant cost of legal fees.

There is no mention of any debt resolution agency. Such an agency would be the kernel of what we should try to do to ensure there is appropriate balance between individuals and banks. Voluntary schemes will only work if both parties come to an agreement. There needs to be pressure on both to reach that agreement. There is now an imbalance that favours the banks. We need to enable people to recover quickly from the current crisis in the interests of all of us and the economy.