asked the Minister for Industry and Commerce if he proposes to implement the decision in the Review of Industrial Performance, 1986 published by the previous Government that the level of fixed asset grants to small firms could be reduced; the particular means suggested to achieve this, namely, higher equity financing and greater use of loan guarantees and interest subsidies; and if he will indicate how and when this decision will be implemented.
Ceisteanna—Questions. Oral Answers. - Review of Industrial Performance, 1986.
24.
The relevant State agencies are already implementing a number of Government decisions which should have the effect of reducing average grant rates for small industry projects in 1987 compared with 1986. The maximum rate of fixed asset grant for expansions of existing small industries has been reduced on an administrative basis by 5 percentage points. In the case of first time applications, an objective has been set for each of the regional small industry boards of achieving a reduction of at least 2.5 percentage points in average fixed asset grant rates in 1987. Moreover, under section 21 of the Industrial Development Act, 1986, promoters of small industry projects may now avail of employment grants in lieu of grants towards the cost of fixed assets.
It is the policy of the relevant State agencies that, as a general rule, grants should be at least matched by equity financing. To this end, the business expansion scheme is being actively promoted as a way of increasing equity finance within firms. In addition, under the enterprise development programme, certain small industry projects can avail of loan guarantees, interest subsidies and equity participation from the State agencies.
Does the Minister agree with the statement in the Review of Industrial Performance that where grant levels are being reduced the companies in question might be invited to seek capital participation in the form of an equity investment from NADCo?
I agree with that statement.