Greens make significant changes to NAMA Bill

Following a Government meeting today, Green Party Minister for Communications, Energy and Natural Resources Eamon Ryan announced changes to the operation of the National Asset Management Agency, which will be reflected in the published bill.

The changes include:

1. Risk-sharing to protect the taxpayer: A risk-sharing mechanism has been agreed by Government. It will deliver an equal sharing of the risk between NAMA and the banks.
2. Banking reform: It will be a criminal offence to seek to lobby NAMA. All employees will report attempts to influence the operation of NAMA to the Garda Síochána.
3. Windfall tax to discourage speculation: A windfall tax of 80% on profits gained from increases in land value due to re-zoning decisions will be introduced to ensure that land speculation is not rewarded in the future.
4. Planning changes: Nama will have the ability to make land banks available in a controlled manner to avoid future land bubbles. New measures have also been introduced to strengthen the regulations setting out the criteria for analysis of long-term value. These include:
* The Minister for Environment’s analysis of the extent of zoning and planning permissions granted;
* The Minister for Transport’s analysis of future land use based on transport planning;
* The Minister for Energy’s analysis of trends in energy prices as a result of the decline in fossil fuels over the medium to long term;
5. Limit on borrowing: The amount NAMA can borrow without the approval of the Minister for Finance will be reduced from a €10 billion limit to one of €5 billion.
6. Quarterly reporting requirements: NAMA will be obliged to report its activities to the Minister for Finance every three months, instead of the annual report included in the draft legislation. Included in this report will be crucial information such as the number of loans outstanding, amount of non-performing loans, foreclosures, incidences where liquidators and receivers have been appointed, the sums recovered from property sales and a full balance sheet of NAMA’s assets and liabilities.

As well as these and other immediate changes in the legislation further legislative changes will come.

The Minister for the Environment will bring forward his Planning Bill for enactment, which will include measures to ensure that the bad planning practices of the past are not repeated. NAMA’s role in realising a social dividend will be put on a statutory basis in the new Bill.

Agreement has also been reached on the need for further regulations to:
* Ensure that the banks use the additional resources they receive to promote lending within the Irish economy.
* Regulate the development of construction projects which are in default.
* Introduce new bank boards and new rules governing of corporate practice.

Announcing the changes, Minister Ryan said: “Nobody would choose to be in a position in Government where the state must act to clean up and repair the banks. However, this is the position we have found ourselves in. Having examined the options available over the past six months, I believe that NAMA is the best option to mend a broken banking system and steer the economy to recovery.

“Legislation of such monumental importance to the Irish state requires close scrutiny. The Green Party has been questioning, checking and changing this legislation over the past months. We will continue this level of engagement and improvement within Government.

“The measures we announce today will increase the protection afforded to the taxpayer. They guard against politicisation of NAMA and its operations.

"All of these measures are designed to make sure that the banking and planning practices that brought us to this crisis cannot be repeated," he said.