Nama Bill: plenty of safeguards for developers - scant protection for taxpayers
30 July 2009
"My initial reaction on reading the draft NAMA Bill is that Fianna Fail is proposing to establish the biggest property company in the world and asking taxpayers to foot the bill and bear all the risk.
"This Bill will be one of the most important pieces of legislation ever to have come before Dáil Eireann. There will be enormous consequences for the taxpayer if the government get it wrong. It is a hugely complex Bill that will require careful study and the Labour Party will examine it in a responsible way. We will issue our detailed response in due course.
"Since the economic and banking crises arose, the Labour Party response has been driven by three crucial objectives – the need to sustain the real economy; to protect jobs and to defend the taxpayer's from the consequences of Fianna Fail's mishandling of the banking crisis.
"Labour has never accepted that NAMA on its own was the best way in which to deal with the crisis. There are many independent commentators and economists who share our view. We believe that temporary nationalisation of the institutions covered by the bank guarantee would be the quickest, most effective and least costly means of dealing with the appalling situation in which the country now finds itself. There are plenty of safeguards in the draft Bill for banks and the developers but scant protection for the interests of the taxpayer.
"The key element missing from the draft Bill is a precise figure on how losses on loans, many of which relate to property developments abroad, are to be apportioned between the taxpayers and the banks. The valuation procedure set out in Section 58 is hopelessly vague. It refers to the long term economic value of the property, but gives no indication as to how this is to be estimated. In other words, the government is asking the taxpayer to take a speculative gamble on what properties may be worth in the future. This is an approach which poses an enormous risk for the taxpayer.
"I am concerned that no limit is placed on the type of properties to be acquired and no limit placed on the value of the assets to be taken over. Despite a figure of €90 billion having been bandied about, there is nothing in the Bill to prevent it from going even higher.
"Knowing Fianna Fail's record and their determination to favour the banks and developers at every opportunity, we have no confidence in the willingness or capacity of this government to protect the interests of the taxpayers."