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Vol. 685 Wednesday, No. 1 17 June 2009 DI´OSPO´ IREACHTAI´ PARLAIMINTE PARLIAMENTARY DEBATES DA´ IL E´ IREANN TUAIRISC OIFIGIU´ IL—Neamhcheartaithe (OFFICIAL REPORT—Unrevised) Wednesday, 17 June 2009. Leaders’ Questions ……………………………… 1 Ceisteanna — Questions Taoiseach ………………………………… 5 Order of Business ……………………………… 16 Offences against the State (Amendment) Act 1998: Motion ………………… 26 Financial Services (Deposit Guarantee Scheme) Bill 2009 — Committee Stage ………… 37 Ceisteanna — Questions (resumed) Minister for Community, Rural and Gaeltacht Affairs Priority Questions …………………………… 42 Other Questions …………………………… 51 Message from Select Committee ………………………… 65 Adjournment Debate Matters …………………………… 65 Financial Services (Deposit Guarantee Scheme) Bill 2009: Committee Stage (resumed) ……… 65 Visit of Chinese Delegation …………………………… 69 Financial Services (Deposit Guarantee Scheme) Bill 2009 — Committee Stage (resumed) and Remaining Stages ……………………………… 69 Broadcasting Bill 2008 [Seanad]: Report Stage (resumed) ………………… 84 Private Members’ Business Unemployment Levels: Motion (resumed) …………………… 113 Broadcasting Bill 2008 [Seanad]: Report Stage (resumed) ………………… 139 Adjournment Debate Cancer Treatment Services ………………………… 160 General Medical Services Scheme ……………………… 162 Health Service Reform …………………………… 164 Post Office Network …………………………… 166 Questions: Written Answers …………………………… 169 DA´ IL E´ IREANN DI´OSPO´ IREACHTAI´ PARLAIMINTE PARLIAMENTARY DEBATES TUAIRISC OIFIGIU´ IL OFFICIAL REPORT Imleabhar 685 Volume 685 De´ Ce´adaoin, 17 Meitheamh 2009. Wednesday, 17 June 2009. ———— Chuaigh an Ceann Comhairle i gceannas ar 10.30 a.m. ———— Paidir. Prayer ———— Leaders’ Questions. Deputy Enda Kenny: The Taoiseach is aware that my party has a very different view from the Government’s on the proposals to deal with the banking crisis, in particular with regard to the National Asset Management Agency or NAMA. Obviously, the confusion that surrounds this is a cause of major concern, particularly when bodies like the IMF say that the difficulty for Government is in determining the extent of the valuation of assets to be acquired. This could have disastrous consequences for taxpayers and the economy generally. Will the Taoiseach clear up this confusion? Given where the Government is in its preparations for NAMA, what is the Government’s assessment of the amount of discount to be applied in respect of assets to be acquired by NAMA? The Taoiseach: There is no confusion whatever on the Government’s part with regard to the establishment of this agency, which is a necessary response to ensure that we have sufficient liquidity in the economy for the supply of credit to businesses both large and small. This is an arduous and complex task and it is being proceeded with as a priority. The question of valuation will be part of that process when we get NAMA up and running. There are EU guidelines on the valuation of impaired assets to which we will be working, both through the ECB and the expertise that will be employed by NAMA for that purpose. That process has just begun. Deputy Enda Kenny: That does not answer the question. I recognise, as does the Taoiseach, the absolute importance of having a banking system that works whereby credit can flow to 1 Leaders’ 17 June 2009. Questions [Deputy Enda Kenny.] small businesses, which is not happening now. We have a different view as to how that should happen. Be that as it may, bank shares are now beginning to climb and the country’s credit rating is continuing to decline. This is because the banks have been saying to their shareholders that the discount will be 20%. Following discussions with the banks, J.P. Morgan is saying this morning that the amount of discount will be 20%. This has massive implications for the tax- payer. The Taoiseach is aware that land valuations and many other asset valuations have declined by 60% to 80%. There are no Green Party Members here this morning that I can see—— Deputy Fergus O’Dowd: They are outside. Deputy Enda Kenny: ——yet the Green Party said six weeks ago that the discount would be 40%. So if the banks are telling their shareholders the discount will be 20%, the Government does not have a view on this, the Greens are saying 40% and international financial houses, after discussions with the Irish banks, are saying 20%, is this not a case of a massive transfer from the taxpayer to bank shareholders? With bank shares beginning to climb as a consequence of those discussions, the country’s credit rating is going down. We all understand the import- ance of having a banking system that works, but it is about time the Government cleared up that element of the confusion applying here. What is the discount to be approximately? Is it 20%, 30%, 40% or 50%? I am aware that when loans were acquired in the beginning, certain equities would have been put up by those who drew down those loans and many of those are technically bankrupt. However, we do not want a situation whereby bank shares are continuing to rise while the country’s credit rating is going down. This only gives credence to the belief that what is involved here is a massive bailout of banks at taxpayers’ expense. Can the Taoiseach clear up that confusion? Does the Government intend to apply a discount rate of 20%, 30%, 40% or 50% to the assets to be acquired? The Taoiseach: I refute Deputy Kenny’s continually irresponsible approach in suggesting that what is being done on behalf of the Irish banking system is some kind of bailout of banks. (Interruptions). Deputy Dinny McGinley: There has been irresponsibility for the past 20 years over there. The Taoiseach: This continuous mantra of a populist message is, of course, something that he feels will give him some sort of political advantage. I do not know, but the real issue here is—— Deputy Enda Kenny: That is a transfer from the taxpayer to the banks. The Taoiseach: The whole purpose of the Government’s action is to ensure there is adequate capital in our banks thus ensuring there is sufficient confidence both domestically and inter- nationally, so that they can get access to the funds that are necessary for them to conduct business and for Irish business to conduct its business, since that is a prerequisite of any mod- ern economy. Deputy Enda Kenny: We know that. The Taoiseach: As regards the question of who takes the hit in the first instance, obviously it is the owners of the loans and, indeed, the banks who take the first hit. Deputy Frank Feighan: Small businesses are taking the hit. 2 Leaders’ 17 June 2009. Questions The Taoiseach: The continual portrayal by Deputy—— Deputy Frank Feighan: The terms of reference are protecting builders, but are not protecting small businesses. An Ceann Comhairle: Deputy Feighan has no locus standi here whatsoever. I will have to ask him to leave in a moment if he keeps it up. Deputy Frank Feighan: Small businesses in this country are going to the wall. The banks are telling small businesses to close up shop. The terms of reference have to be changed. An Ceann Comhairle: The Deputy is not entitled to interfere. Deputy Frank Feighan: What is happening in this country is outrageous. An Ceann Comhairle: I will have to ask the Deputy to leave if he keeps this up. Deputy Frank Feighan: Every business is being thrown to the wolves. The Government is not protecting the small businesses of this country. An Ceann Comhairle: I will have to ask the Deputy to leave if he keeps it up. He will have to leave. If a question is asked of the Taoiseach he must be allowed to reply. This is a democratic forum. Deputy Pa´draic McCormack: If he is not replying, what can you do? The Taoiseach: The continual portrayal by Deputy Kenny in the past was, of course, that there was no discounting taking place and that the book value of \90 billion was the amount to be mostly undertaken by the banks. Deputy Enda Kenny: The Greens are saying 40%, while the banks are saying 20%. The Taoiseach: After the elections, he has a totally different point of view. That concerns the level of discount, which was the point we were making all the time. The ultimate discount depends on asset quality and many other criteria, which will be decided by NAMA in the first instance, and not by anyone outside the House. Deputy Enda Kenny: So the Green Party is wrong and the banks are wrong. Deputy Eamon Gilmore: Has the Taoiseach seen the speech made yesterday by the Arch- bishop of Dublin, Dr. Diarmuid Martin? The archbishop stated it is no longer tenable to have 92% of the primary schools in the country managed by the Catholic church. He described that situation as an almost monopoly that is an historic hangover which does not reflect the realities of today’s Ireland. He went on to suggest that there should be new models for the management of primary schools that would provide for parental choice and which would reflect the diversity of life in today’s Ireland. Archbishop Martin has suggested that there should be dialogue between the State and the Catholic church on this matter. He has also suggested that there should be a national forum to discuss new models for the patronage and management of schools. Does the Taoiseach agree with the archbishop’s general assessment? Will he take up the suggestion made by the arch- bishop for dialogue between the State and the Catholic church on the patronage and manage- ment of schools? Will he agree to establish the national forum on education and on the future patronage and management of schools advocated by the archbishop? 3 Leaders’ 17 June 2009. Questions The Taoiseach: I have not had the opportunity to study what Archbishop Martin had to say yesterday, although I recall him speaking on this matter before when dealing with fast developing areas in Dublin, for example.