Madam, – David Murnane (April 11th) asks why, having set up a National Asset Management Agency, the Government doesn’t also set up a national building agency? The rest of his letter indicates he thinks the Government should do so. I agree with Mr Murnane.
However, I would not agree that the land and unsold houses obtained cheaply by the Government should be used to resuscitate the housing market, not even an “affordable housing” (as it’s called) market. A free-market capitalist approach to housing provision is the last thing we need at the moment – or at all, if it comes to that.
What we need urgently are homes, especially for the 60,000 or so people who have been languishing on local authority council house waiting lists. The numbers on these lists are increasing. These are people who know they cannot afford a mortgage, or who just don’t want to risk hanging round their neck a 30-year debt that might restrict their own and their children’s life choices.
These people were virtually abandoned by the Government during the Celtic Tiger period – I suspect for ideological reasons. Social housing is anathema to neoliberal free-market capitalism. It doesn’t allow property developers the opportunity to inflate house prices and increase their profits. Indeed, building adequate amounts of social housing probably helps to keep house prices down.
Most of the benefits mentioned by Mr Murnane that would arise from a Government agency building private housing. But job creation, reduced dole payments, more income tax payments, would also be provided by building council houses. While stamp duty would not arise, building council houses would remove the huge social injustice of putting an ideology before the human need – and, indeed, the human right of everyone to have a home.
I would support Mr Murnane 100 per cent in his demand that a new building agency should not employ any of our present developers – at least not any who owe us money via those banks that we bailed out. – Yours, etc,
Madam, – While reading Frank McDonald’s article (“Bad debt agency may be scaffold for property developers”, Opinion, April 11th) I had to pause to confirm I had the correct section of the paper. The description of how wealthy developers are going to become destitute as a result of the establishment of the National Asset Management Agency seemed more appropriate for a review of a work of fiction.
Does Mr McDonald believe that these individuals are going to be pursued relentlessly for all their worldly possessions? Are all the financial institutions around the globe suddenly going to open their books? There is absolutely no precedent in this country for this type of action.
A much more likely scenario is that despite millions being owed, money will be found to hire the best lawyers and accountants to minimise the losses. Unfortunately the State, (with its limited budgets, timid approach and the Constitutional guarantee of private property rights) will lose out again.
The imponderable is the number of billions that this whole mess is going to cost the rest of us. The average citizen could be paying for it for generations and we are going to have a continuing deterioration in the quality of our public services. – Yours, etc,
Madam, – Now that we are about to establish a stately home for the banks’ toxic debt, should we not reserve a special section for those dismal economists (mainly academics) who exult in the politics of despair? The reserved area to be known as the Cassandra suite. — Yours, etc.
TOM O’CONNOR,
Churchtown,
Dublin 14.
Madam, – Social contract envisages an agreement between people to form a society as the alternative would be too terrible to contemplate. The process is entirely consensual. The authority of government is derived from the consent of the people in return for a guarantee which seeks to protect life, liberty and the pursuit of happiness.
When government fails in this duty it has broken the contract and in extreme circumstances may be deemed to be at war with the people. At the point the contract fails, mutual obligations end and the right to resist government authority is no longer in dispute.
At what point in our history did the Irish people assume the status of servile drones subjugated to the cynical dictates of a group of mid-Ireland mediocrities masquerading as political leaders? Is the West awake yet? – Yours, etc,
Madam, – The future operation of Nama is fraught with risk.
In order that public confidence be maintained throughout its lifetime, overt transparancy should be embedded from the outset.
I would urge the Minister to:
1. Appoint an external board to monitor and publish periodic recommendations.
2. Require full disclosure of information (along the lines of President Obama’s troubled asset relief programme), involving its transactions being regularly published and freely available to the public via the internet.
KEALAN FINN,
Neuville sur Saone,
France.
Madam, – There has been no civil unrest or public disorder, just a cold, furious and dignified anger because we know this is a dead government walking. – Yours, etc,
Madam, – Now that Nama is taking on billions of euro in toxic debt, does this mean that Ireland will be known as “the banama republic”? – Yours, etc,
Madam, – It is difficult for ordinary citizens to understand the processes underlying the operations of the proposed National Assets Management Agency (Nama). Perhaps the following example may shed some light on the matter.
Crony developer A has a beneficial interest in 10 companies. Two years ago one of his companies borrowed €50 million from a major Irish retail bank to fund a development. The loan was secured solely on the assets of the proposed development. The reason the loan is now deemed to be “toxic” is that the market value of the development is now €20 million. The company is not willing to continue the repayments. If the lending bank or Nama presses the company, it may declare itself bankrupt. The most that can be recovered is €20 million.
The bank will be at a loss of €30 million. But crony developer A has a beneficial interest in nine other companies and personally owns assets of several hundred millions of euro.
Surely the Government should introduce legislation to compel the crony developer to pay off the loan from his other assets? In addition, a levy could be placed on all large assets outside the family home and outside the family farm to pay the debts of other developers who have no other assets except “toxic” developments.
These measures would be far more just and reasonable than requiring the entirely blameless taxpayer to shoulder the debt through the proposed National Assets Management Agency.
But then, perhaps I am being naive? If so, why? – Yours, etc,
Madam, – It is worth highlighting the article by Tim Callan, Claire Keane and John Walsh of the ESRI (Business This Week, page five, April 10th). Its message is summed up in the heading: “Budget package succeeds in redistributing wealth.” The authors note, “Overall the Budget package is therefore strongly redistributive, with income gains for those with the lowest incomes and the percentage losses rising with income.” The article may help to curtail the predictable knee-jerk reaction to the Budget from our sideline socialists. Or perhaps that’s being too hopeful. – Yours, etc,
Madam, – Financing the public service is essentially about raising tax to pay salaries and pensions. These public service salaries and pensions are unaffordable and unsustainable. This is the elephant in the room that has not been identified in the Budget. Yours, etc,
Madam, – As our politicians wrestle with the thorny issue of taxation, I am reminded of an observation made by Edmund Burke that the late great Conor Cruise O’Brien was fond of quoting: “To tax and to please, no more than to love and be wise is not given to men.” – Yours, etc,
Madam, – An article by Caroline Madden entitled “Bankruptcy in England could be an attractive option” (Business Today, April 8th) refers to European legislation enacted in 2002 that covers personal as well as corporate insolvency between member states. The article outlines a case in England involving a German national who moved to England, and was made bankrupt in that jurisdiction even though all of his creditors were in Germany. This was granted because he petitioned that England was his “centre of main interests”.
This has major implications for our country. In Ireland you will normally remain an undischarged bankrupt for 12 years, however in England bankruptcy can end after as little as 12 months. Ms Madden’s article states that on the basis of this ruling, heavily indebted Irish individuals are being advised to consider setting up residence in England before applying to the court to become bankrupt there.
At present, Northern Ireland has the time period as England, which makes the situation even more worrying.
We now know that a significant proportion of Ireland’s toxic debt relates to property abroad including the UK, purchased with capital loaned by our banks.
We might then be faced with the appalling situation in which many of the speculators and developers who helped destroy our economy will be employing on building sites in England the very people they forced into emigration by their reckless actions (leaving aside the emigrants who won’t be lucky enough to find gainful employment and will be reduced to penury and homelessness like generations before them). – Yours, etc,