Last night, on TV3’s Tonight With Vincent Browne, hosted by Dearbhail McDonald, the panel included Fintan O’Toole, of the Irish Times; barrister Ross Maguire, of New Beginning; Mary Freehill, Labour councillor at Dublin City Council; and Thomas Byrne, of Fianna Fáil.
They discussed Nama’s recent rejection of New Beginning’s €20million offer for the Bord Gáis Energy Theatre – with the group intending to hold it as a public trust – in favour of open market bids.
Following on from this discussion, they talked about how a section in the Nama act allows the Minister for Finance to direct Nama to contribute to the social and economic development of the State.
They also spoke about the recent rise in property prices and Nama’s role in this.
From their discussion…
Dearbhail McDonald: “When we look at where we are now, all roads lead back to the Bank Guarantee, all roads lead back to that period of time. Nama is a special purpose vehicle, the largest property company, development company, land company, in the world, probably. Is it time to revisit the act, it’s done its initial job of taking the bad loans from the banks and it was a reaction to, it dealt with the commercial end of the crisis but when you look at, only less than 800 borrowers, it didn’t really look after the residential, could it ever actually fulfil a social and economic purpose?”
Fintan O’Toole: “No, and…”
McDonald: “Under the terms of the act, as it was written?”
O’Toole: “The whole Nama saga really, you know, is highly dubious it seems to me. What did we do? I mean, just stand back from it. It was transferring assets from one set of State-owned agencies to another set of State-owned agencies, at enormous cost. They set aside €2billion in fees, in order to do this…”
McDonald: “Over the lifetime…”
O’Toole: “Over the lifetime of Nama. Now people get very upset about Irish Water, for example, and the amount of money that was spent on the consultants. I mean it’s a tiny, tiny, tiny, excuse the awful pun, drop in the ocean, compared to…”
McDonald: “Now, Nama would since come out and say ‘look, those were initial projections, they have now come in at significantly less’. But when you perhaps look at that, compared to the operation, Ross, of…”
O’Toole: “The fact is they were willing, they were willing to spend that, you know. So, yes, they may come in at less but they set it aside. Whether they set it aside to make sure that the professional classes were going to be looked after first… and what was achieved by all of this? I mean we have banks, we have banks which have debt recovery agencies, you know. Of course some of them might have needed to boosted in the wake of the crash but this whole thing – what did it do?It made the State into a giant debt collection agency and it’s having hugely corrosive effects. We’re seeing them already. Nobody has asked the question, for example, is it in the interests of the citizens of Ireland, long-term, for property prices to rise. The reason property prices are rising is because we’ve got this massive investment in Nama and Nama has to be seen to be a political success…”
McDonald: “Is that the overriding prerogative…”
O’Toole: “But is it actually good for social development? Is it actually good for economic development? Is it good that commercial rents have risen to a point again, where they…”
Thomas Byrne: “Nama is not the cause of that. I mean people who opposed Nama at the start, said that ‘oh property prices will never go up’ and therefore, ‘your calculations and projections are wrong’. Now, you’re attributing to Nama, it seems to me, the increase in property prices. There are other reasons for it.”
O’Toole: “No, hold on, what I am saying is that the political imperative was then built into the system whereby we all acquired a sort of vested interest in property prices continuing to rise. A really interesting example was the promise to end the practice of upward-only rent reviews, which was crucial to small businesses, right? That was abandoned. Why? Because it didn’t suit Nama because Nama had huge interests in rent rolls and all the rest of it.”
Watch back in full here