Alice-Mary Higgins (Independent) | Oireachtas source

This would only be for such loans that have been profitable. The concern is that we underwrite the risk and then we do not take the share of the profits. I understand some of the arguments on the underwriting of risk. For example, I did not oppose the Credit Guarantee (Amendment) Act 2020 in that sense but where the risk is being effectively underwritten by the State and there is profit then we cannot have the situation where we do not share any part of that profit. It is unfair and it is a poor agreement and situation. I am concerned that sometimes we pour a lot of public money into banks and into underwriting their risks, while not asking them to contribute where they are making profits. The thing with all these measures, be it the 50% I propose or the 25% proposed by Senator Gavan, is that it only applies where there are profits. If there is a bad year and there are no profits then it does not kick in but it applies where there are profits, which is important because we are still substantially de-risking what the banks are doing. However, we are cutting ourselves off from any benefits from that. It is a poor deal.

For example, the recovery and resilience fund is coming from the European Union for Ireland to be used in our recovery and resilience and in our climate resilience. We received €49 million for retrofitting which could have been used to expedite retrofitting. I know there are other good retrofitting schemes but it could have increased those schemes and helped our schools, for example, including those that have been most impacted by the heightened price of fuel. Instead we put €49 million into the banks to de-risk them giving loans for retrofitting. We might say that the banks will give larger loans, which is great and we have mobilised that finance. Every business in Ireland takes risks and gains profits but we underwrite the risks for banks and they do not share the profits. It is unfair to other businesses that take risks and pay tax on their profits that we have banks that are getting their risks underwritten by the State and that are not delivering in profits. The banks should be lending for retrofitting and we should not have to underwrite them to do that; we should be encouraging them to do it. The State had €49 million of public money that it could have directly used for retrofitting and instead it went to the banks which do not pay tax on their profits. That is frustrating.

I appreciate that we are in a vulnerable situation and it is regrettable that as KBC and Ulster Bank leave the market they are not paying the levy next year. That is a poor decision. This is a wider issue that we cannot address here but the Minister will be aware that we are developing banking reports within the membership of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach. It is a poor decision that has resulted in this situation where we are overly dependent on a narrowing banking system and where we do not have enough actors in that sector. We need to have proper and responsible policies in this area. I am concerned that we are continuing to write off profits and to double down on the de-risking of financialised solutions in the area of climate, much as we de-risked certain financialised activities in other areas such as housing in the past. I know the Minister is not in a position to accept these recommendations but this is a topic we will need to come back to.