Labour Housing Spokesman: Carroll property collapse would be best for taxpayers

[MsAnneThrope]

But if NAMA is in place already, a change of government will do no good, as it will have no choice but to pursue policies that are designed to start another property boom. Once NAMA has all those debts on its books, the state is gambling its continued existence on another property boom.

The current Opposition can have an influence on how NAMA operates and, more importantly, how the banks are managed and regulated, when they get into Government. There are still two huge glaring holes (or vague areas) in the current draft NAMA legislation, and the Opposition will have its chance to lay a few key paving stones for how NAMA will operate, when it is debated in September. These are:

(i) An industry-wide levy on the banking industry if NAMA makes a loss

(ii) Ending the banks ability to claim tax relief on any losses from writing down asset values

Investors couldn't be faulted for thinking there won't be any nasty surprises with the above, the way the NAMA legislation is currently drafted. This is evident by their soaring share prices, despite the AIB results yesterday. At the time of writing AIB is up ~20% and BOI ~11%.

The Government has to get tough with the banks. They've been saved by the taxpayers. So what if they don't have multi-billion euro profits for a couple of years. They need to go back to basics, work with whatever Government is in place, and play their role in getting the country back on its feet again.

The Opposition has a role to play now in feathering their future NAMA bed, by insisting that certain measures are taken now. Then, when their chance in power comes, they can ensure the banks are paying up for the rescue. Lenihan himself has said the levy issue won't be covered in NAMA legislation, but will be introduced in a future Finance Bill. The current Opposition can do the same when their chance comes and make sure the banks are paying their fare share in reparation for the damage their recklessness has caused.

We all know it's only a matter of time (even if FF survive to 2012) before FG is in power. They can play a key part now in doing their best to ensure the legislation, and provisions for the introduction of future Finance Bills, are firmly grounded for when their turn to ride the NAMA beast comes.

The way I see it we have two choices. (i) We can and should tax/levy the banks sufficiently in the coming years, and inflict them to a few years of deserved humility for saving them from their own stupidity. Or (ii) we can let them off the leash to do what they want and require another property bubble for NAMA to at least break even. I prefer the first option and will be voting for whatever political party does too.

[Cael]

NAMA's potential losses are so great that you couldnt put a levy on the banks to anything like cover them without collapsing the banks.

[MsAnneThrope]

NAMA's potential losses are so great that you couldnt put a levy on the banks to anything like cover them without collapsing the banks.

I'd never advocate a swift, hard shock that would shut them down. It could be applied on an annual basis for x number of years. However long it takes. 20, 30, 40 years, for example. We saved them from wipeout. Let them eat humble pie for a while. The alternative is collapsing the country.

[feargach]

Yes this is true and unfortunate. But the current Opposition can have an influence on how NAMA operates and, more importantly, how the banks are managed and regulated, when they get into Government. There are still two huge glaring holes (or vague areas) in the current draft NAMA legislation, and the Opposition will have its chance to lay a few key paving stones for how NAMA will operate, when it is debated in September. These are:

(i) An industry-wide levy on the banking industry if NAMA makes a loss

No such levy can happen.

It. Just. Can't.

It's 2020. Nama has made a crushing loss. Deutsche bank have been in Ireland since 2018. They will sue the shirt off any government that tries to levy them for a property scam which they had no part in.

Even if they lose, so do we! They'll just ratchet up our charges, and pay us less on deposit interest. People will simply stop doing any banking business in Ireland beyond the bare minimum.

Companies will set up in Newry to do business with UK-based banks, because their loans will be cheaper, due to a lack of NAMA levy.

[politicaldonations]

The NAMA Scama is based on the notion that land/property prices are artificially low and will recover. This is bubble era thinking. We are simply returning to a normal property/land market and prices should be allowed to fall to 30-50% of peak prices to make economy sustainable and competitive and efficient. I'd rather the state took over the whole banking system and liquidated the bad loans in an honest transparent fashion and added the losses and extra capital for banks onto the national debt. Nama is like HSE in it appears to distance the government from the activities in certain sector and they cant be accused of helping their developer mates even though they will be.
NAMA is like a construction guy who bought a house in 2006 for 500k that is now worth 250k and who has had a 50% pay cut borrowing 200k to fund costs of living and interest only mortgage in hope his house will return to 500k level in next decade or two and he will be able to pay back the 500k he owes.

[MsAnneThrope]

No such levy can happen.

It. Just. Can't.

It's 2020. Nama has made a crushing loss. Deutsche bank have been in Ireland since 2018. They will sue the shirt off any government that tries to levy them for a property scam which they had no part in.

I should have explicitly stated the domestic banks that were assisted. Of course I'd never expect a newcomer to the market to be subject to the same levies.

[Eye of Angkor]

Thats a great point. The opposition should be pushing for a referendum on NAMA. This is far more important than Lisbon.

I'm with you on this. At its height Lisbon is deckchair arranging - it is arguable that it does not even require a referendum to be vaildily ratified.

A referendum on NAMA would have a number of positive benefits. It would force the Government to explain exactly what is involved. It would force the opposition parties to say precisely where they stand on this issue. It might even force FF backbenchers to think for a change. It would generate concentrated public debate on the issue. Finally, if it passed, people couldn't whinge about it afterwards.

And BTW Cieran Lynch deserves some compliments - a bit of thinking from Labour for a change.

[Cael]

I'm with you on this. At its height Lisbon is deckchair arranging - it is arguable that it does not even require a referendum to be vaildily ratified.

A referendum on NAMA would have a number of positive benefits. It would force the Government to explain exactly what is involved. It would force the opposition parties to say precisely where they stand on this issue. It might even force FF backbenchers to think for a change. It would generate concentrated public debate on the issue. Finally, if it passed, people couldn't whinge about it afterwards.

And BTW Cieran Lynch deserves some compliments - a bit of thinking from Labour for a change.

Tragically, for all those reasons, we wont have a referendum. Giving the people a say in matters of money is certainly not the ruling elite's idea of democracy.