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Dáil Éireann debate -
Wednesday, 25 Jun 2014

Vol. 845 No. 2

Friendly Societies and Industrial and Provident Societies (Miscellaneous Provisions) Bill 2013 [Seanad]: Second Stage

I move: "That the Bill be now read a Second Time."

I am pleased to present the Friendly Societies and Industrial and Provident Societies (Miscellaneous Provisions) Bill 2013 on Second Stage. It addresses two separate bodies of legislation, both of which operate under the Registry of Friendly Societies, namely, the legislation governing friendly societies and the legislation governing industrial and provident societies under which many co-operatives are registered. In this sense, the Bill represents a response to our commitment in the programme for Government to work to ensure a level playing field between co-operatives and the other legal options for structuring enterprise activities and provide a framework for the full potential of the co-operative model to be realised.

The Bill received broad support in its passage through the Seanad, where just one substantive amendment was made. This related to the application of examinerships to co-operative societies. The amendment arose from the introduction late last year of the ability for small private companies to initiate the examinership process in the Circuit Court rather than the High Court.

Both bodies of legislation addressed by the Bill date back to the late 19th century when friendly societies and industrial and provident societies developed as part of a mutual self-help movement that included co-operatives, building societies, savings banks, credit unions and trade unions. Given Ireland's rural economy, the emphasis was mainly on farming co-operatives and agricultural banks on the industrial and provident societies side, whereas friendly societies, many offering insurance-type services, making payments and offering support at times of death, illness or inability to work, were largely an urban phenomenon.

As Deputies well know, co-operatives have played a significant role in our economic and social development during the years, particularly in the agrifood sector through groups such as Kerry Group, Glanbia and Dairygold. People will also know about the work of co-operatives through the livestock marts that operate in nearly every county or even more directly through their group water schemes which account for more than one third of all registered co-operatives. Housing co-operatives also play a significant role in the provision of group and affordable housing for people with modest incomes through a mix of renting and ownership.

Co-operatives are owned and democratically controlled by their members. It is important to recognise the contribution they make and appreciate their real value and worth. They are rooted in the community, offer jobs to local people, can be stable employers because their members live in the community and offer a strong alternative to more investor-driven businesses. The Government is committed to assisting this particular form of enterprise to expand, develop and continue to have a positive impact on business.

The picture is somewhat different nowadays on the friendly societies side. While no one would deny the good that these societies have done in their day and, in the context of the small number that remain, continue to do, it has become clear in recent years that this is not a corporate model of choice in the 21st century. In fact, just three of the existing 47 societies have registered in the past nine years. It could be argued that the friendly society model has been a victim of its own success. As many of the activities carried out under the friendly societies umbrella developed, they became independently regulated sectors, for example, insurance and medical benefits societies, or were replaced by State-provided welfare systems.

The Government is concerned about a prudential supervision gap. While the Central Bank regulates savings, loan and insurance activities carried out by entities involved in the provision of financial services with a view to protecting the financial interests of members of the public doing business with the provider of the financial services, it does not do so where these activities are carried out by friendly societies. This is a source of some concern, given the potential risk to the interests of certain members of the public who may not be aware of their exposure and believe they are protected by the general regulatory activity of the Central Bank. As such, it is in the public interest to restrict the operation of new entities. However, the Registry of Friendly Societies has no expertise in this regard and there is no existing legal basis for such supervision, nor would it be practical, given the number of societies involved, to develop a dedicated supervisory regime within the existing registry. The most realistic institutional option for introducing an appropriate system of supervision is the Central Bank which is at the centre of financial supervision and financial stability oversight and has a responsibility to provide, in a fully integrated and co­ordinated manner, for the prudential supervision and stability of all types of financial service within the financial system as a whole. To avoid the possibility of other bodies moving into this unregulated space, it has been decided to close registrations to new friendly societies.

Our reasons for amending this fairly ancient legislation instead of introducing a new Act or Acts are twofold. First, we needed to avoid diverting effort and resources away from the work on the Companies Bill, with which all Deputies are familiar from its recent passage through the House and which is the current priority in this area. Second, the Companies Bill, when enacted, will, to a certain extent, impact on how related issues in the co-operatives area will operate. There is no principled reason for the approach taken by that Bill on matters such as registration and financial reporting not to apply to friendly societies and co-operatives in due course also.

This Bill is aimed primarily at easing the regulatory burden on co-operative societies and making it easier to start up and run a co-operative as an alternative form of enterprise organisation. It will address particular problems that have been identified in the co-operative sector and help to ensure this model will thrive and grow to its potential in line with the commitment in the programme for Government to promote appreciation of the co-operative as a form of enterprise organisation. The Bill also recognises the changing environment in which friendly societies operate and the lack of prudential supervision governing activities that, if carried out by other entities, would be subject to regulatory oversight and seeks to address these issues. When the Companies Bill is enacted, the intention is to prepare modern legislation to cater for the co-operative sector and existing friendly societies.

Let me turn now to the Bill which is set out in four Parts to give more detail on some of its main provisions.

Sections 1 to 3, inclusive, which comprise Part 1, are general sections only, dealing with citations, construction and commencement, definitions and provide that expenses incurred by the Minister in the administration of the Bill may be paid out of moneys provided by the Oireachtas.

Sections 4 to 8, inclusive, make up Part 2 of the Bill which relates to the operation of the friendly societies legislation. Section 5 provides for a significant change to that Act, that is, the termination of registration of societies under this legislation. Only 47 societies remain in existence, of which just three are new entrants in the course of the past nine years, giving a clear indication that the friendly society model is no longer favoured by newly establishing organisations. This change will mean, in effect, that the friendly society model will continue only for a closed group of societies.

Section 6 places a restriction on existing societies establishing a loan fund, as provided for in section 46 of the principal Friendly Societies Act 1896, where they do not already have such a fund in place. This has been a little used provision - just three societies have a fund in place and this change will not impact on them.

Sections 7 and 8 are two technical amendments which will facilitate the operation of the Friendly Societies Acts. Section 7 removes the role of the Minister in relation to cancellations of friendly societies. Under the current legislation, the Registrar of Friendly Societies must receive the prior approval of the Minister before cancelling societies. It is proposed to remove this role in relation to friendly societies and also later in the Bill to industrial and provident societies. The Minister has no such role in relation to a company strike-off and such a role for a political authority is inappropriate in modern times.

Section 8 removes the restriction in the current Act providing that the registrar must be physically absent for the powers, functions and duties to be exercised and performed by such other person as the Minister may authorise and allows another person to act alongside the registrar.

Sections 9 to 12, inclusive, make up Part 3 and relate to the operation of the industrial and provident societies legislation. Section 10 sets out a number of amendments to the principal Act of 1893. These relate to issues which were identified through a consultation process as being practical and immediate difficulties being experienced by co-operative societies in relation to the current legislation. It is considered that the proposed amendments will ease the administrative burden for the co-operative sector. I will detail some of the main changes. Paragraph (a) provides for the removal of the upper limit on the interest in a society which an individual society member may hold, where a society so specifies in its rules. The existing upper limit is €150,000, or 1% of the total assets of the society, set in 2005. This limit is generally suitable for all categories of society, although there is a risk that it may deter the formation of new societies having small memberships but high capital requirements, for example, wind farming.

The original rationale for having a statutory limit on individual shareholdings is believed to be connected with the notion of equal participation by the members of a co-operative enterprise. This objective, however, can be fully achieved by co-operatives themselves through the medium of their own rules and without the need for legislative intervention. Paragraph (b) provides that an appeal from a refusal by the registrar to register a society, or to register a society's rules, may be made to the Circuit Court, rather than the High Court as at present. This should reduce costs for societies.

Paragraph (c) makes two technical amendments, including providing for the removal of the requirement for the Minister to approve the cancellation of a society's registration. Paragraph (e) provides that annual returns to the registrar may be submitted on one of two dates during the year, depending on the date of a society's financial year, that is, the date to which their balance sheet is made up. This allows societies freedom regarding their choice of year end and extends the timeframe for the submission of the return. The current system is restrictive and causes difficulties for societies, the annual business cycles of which do not accord with the dates set down in the Acts such as dairy societies which wish to bring their reporting year into line with the dairy production year.

Paragraph (f) extends the right of members or persons having an interest in the funds of the society to inspect the books containing the names of members to include their holdings in the society, whether in shares or loans. I understand this is already the practice among many co-operative societies.

Paragraph (g) provides for a right for non-members to inspect the books containing the names of members and their holdings in shares at reasonable hours at the registered office of the society. The section is modelled on a similar provision in the Companies Acts. Without this amendment, non-members would have no ability to access the membership or holding details of a society, in the absence of the triennial return, the requirement for which is being abolished.

The co-operative sector has sought the abolition of the requirement for societies to submit, at least once in every three years, a return, known as a triennial return, of the members and their holdings to the registrar. The sector has argued that the information is out of date too quickly to be useful and imposes an unnecessary administrative burden on societies. Section 11, therefore, in accordance with what proved to be general agreement that this return served no useful purpose, abolishes this requirement. Section 10(g) provides that both members and non-members will now be able to access information on members and their shareholdings directly through the co-operative society.

Section 12 provides for a number of amendments to the Industrial and Provident Societies (Amendment) Act 1978. It provides for an increase in the amount which a society may raise by way of subscription for shares, without the written permission of the registrar, from €12,697 - £10,000 - to €30,000. It also extends the provision whereby certain funding sources are excluded from the requirement to obtain the written permission of the registrar to include moneys advanced by a public body to a registered society. This will remove the need for societies to seek the prior permission of the registrar before they can accept funds from a public body or where the amount of share capital raised in any period of six months does not exceed €30,000. The change meets the concerns of some societies affected, particularly building co-operatives, that the current restrictions are excessive.

Sections 13 to 25, inclusive, make up the fourth and final Part which provides for the examinership provisions of the Companies (Amendment) Act 1990, as amended, to be made available to co-operative societies. Examinership is a mechanism used to enable companies in financial difficulties to be put back on a sound footing and avoid liquidation. Currently, this mechanism is not available to industrial and provident societies. The practical effect is to limit the restructuring options available to a co-operative society in the event that it gets into financial difficulties. While I am not aware of any particular instance in which the examinership mechanism may be required by co-operative societies, it is considered desirable, particularly in the current economic climate, that the mechanism be available for use by any society which might need it. The co-operative movement has also signalled that this matter should be addressed as a priority. The intention is that the law on examinership, as it applies to companies through the 1990 Companies (Amendment) Act, will apply in the same manner to industrial and provident societies.

Sections 13 to 25, inclusive, provide for such necessary definitions, changes and modifications as are needed to apply the legislation to industrial and provident societies. The amendments are, effectively, technical amendments necessary for the understanding and effective operation of the legislation in its application to co-operative societies.

A small number of sections or parts of sections of the Bill are, for various reasons, disapplied for the purpose of the Bill's application to industrial and provident societies, for example, section 6A is disapplied as the provisions of the Companies Acts in relation to receivers do not apply to industrial and provident societies. Again, I will detail some of the main provisions.

Section 15 construes phrases in the 1990 Act which apply specifically to companies to the nearest equivalent definition or meaning for industrial and provident societies.

Section 16 applies section 2 of the 1990 Act, as amended by the Companies (Miscellaneous Provisions) Act 2013, which allows certain private companies to initiate proceedings in the Circuit Court, rather than the High Court. This section also establishes what is meant by a "small society" which is not an existing concept in terms of co-operative societies. The criteria used to define a "small society" are similar to those used to define a "small private company".

Section 17 deals with the issue of who may petition for protection of the court, with certain modifications needed with regard to industrial and provident societies. It specifies the number of members of the society required to present a petition. The number proposed in this regard equates with the existing proportion of members who are permitted by the 1893 Industrial and Provident Societies Act to request the registrar to investigate a society. For ease of reference, the section also restates and updates the references to the list of societies comprehended by section 3(2)(c) of the 1990 Act. By restating the list in this Bill, the necessity to refer to Acts other than the 1990 Act is avoided. Additionally, as the list is not directly applicable to all industrial and provident societies, non-relevant elements are excluded. The section also expands the definition of "director" to include the committee of management or other directing body of an industrial and provident society.

Section 20 substitutes the reference in sections 7, 18 and 24 to the Companies Acts with the Industrial and Provident Society Acts to reflect the fact that the Industrial and Provident Societies Acts rather than the Companies Acts provide the governing legislation for societies.

Section 21 removes the reference to "shadow director" which is not a term which has an equivalent meaning in the context of an industrial and provident society.

Section 25 restates the offences in the 1990 Act and has been updated to equate with the provisions in the Companies Bill 2012 which is before the Seanad. The section provides that summary proceedings in relation to an offence under this section may be brought by the Registrar of Friendly Societies.

I look forward to hearing Members' views this evening and in our future consideration of the Bill as it progresses through the House. I commend it to the House.

Fianna Fáil welcomes the easing of the regulatory burden on co­operative societies through the elimination of some of the discrepancies under which the current regulatory system favours the company model. We also support making examinership, currently available only to companies, accessible to co­operative societies. The Irish word "meitheal" sums up the principles of the co-operative movement, namely, people working together for the betterment of their community. In an increasingly globalised world, there has never been a greater need for the principles of the co-operative movement to be applied in a practical manner, supporting local employment.

Fianna Fáil has concerns regarding the prohibition on the registration of new friendly societies. While the sector has gone into decline in recent times, many friendly societies provide a valuable service in niche areas. In contrast, the sector appears to be doing well in the UK, with more than 10,000 societies there under the control of the Financial Conduct Authority. Given the lack of competition within the domestic banking sector and the difficulties experienced within the industry in Ireland in recent times, it could offer a valuable alternative means of providing pensions, savings or co-operative banking to people in a cost-effective manner. Rather than closing off this form of enterprise, the Government should be examining how the sector can be assisted in meeting the needs of the modern economy.

As stated by the Minister of State, co-operatives are businesses owned and operated by and for their members. The distinguishing feature of a co-operative is that the members have an equal say in the running of the business and a share in the profits. The sheer breadth of the co-operative sector can be seen from the website of the Irish Co-operative Organisation Society, ICOS, the umbrella organisation for co-operatives in Ireland. ICOS serves more than 150,000 members and directly employs 12,000 people in Ireland. It has seven core sectors: multipurpose dairy co-ops; livestock sector co-ops; store, trade and wholesale co-ops; service-related co-ops; community-oriented, culture and leisure co-ops; food, fishing and beverage co-ops; and advisory and education-related co-ops.

Co-operative societies are an undervalued form of enterprise. Fianna Fáil welcomes the move to reduce the regulatory burden placed upon them and to make them a more attractive business form. There are numerous examples of successful co-operatives around the country allowing people to work together to create sustainable enterprises, particularly in the agricultural sphere. Since the establishment of the co-operatives in the agriculture sector, particularly the dairy sector and livestock marts throughout the country, they have been invaluable. Some of the smaller co-operatives that opted to remain on their own despite the challenges in the sector have been very competitive. Some of the small co-operatives in Cork, including North Cork Co-op, Bóthar Buí Co-op and Drinagh Co-op, have been paying the best prices to their primary producers, the farmers. The House will later resume its debate on the Irish beef industry. The model of the co-operative movement and the value it has created cannot be underestimated.

For a long time credit unions were viewed as friendly societies, which came within the remit of the former Department of Enterprise, Trade and Employment. However, owing to the financial issues that have arisen, they have moved into the mainstream financial area. There are also many co-operatives in the social housing area, made up of sheltered housing agencies coming together to form co-operatives in order to draw down funding. The modus operandi of these co-operatives has been second to none. In the UK, a number of co-operatives are being established in a raft of sectors. As I stated earlier, the small co-operatives have best served the primary producers, which is the purpose for which they were established. While some co-operatives are huge global enterprises, the primary function of the co-operative movement is to serve its shareholders and the people they represent.

On the extension of the examinership option to co-operatives, there was a significant reform of examinerships last year as part of the Companies Bill. Fianna Fáil supports the extension of the examinership option to co-operatives. For legislation to be successful, it must be endorsed by the relevant professions, accountancy and legal. Also, the Judiciary needs to be trained in the complexities of co-operative society restructurings. Solicitors, barristers, auditors and accountants should be required to post prices for their services, including hourly rates, on the relevant regulatory website. All professionals should be required to provide clients with meaningful cost estimates.

A number of concerns were raised in the Seanad about the prohibition on the registration of new friendly societies. It is true that there has been a significant decline in recent times in the number of friendly societies here. There are currently only 47 in existence, with only a limited number having been registered in the past ten years. However, many such societies provide a valuable service to their members. During the debate on the legislation in the Seanad, Senator Seán D. Barrett highlighted the case of the public service friendly society which provides access to low-cost illness protection, specified illness cover, travel insurance and help for members struggling with school costs. While the Government appears to be willing to close the book on the era of friendly societies, it is a very different situation in the UK, where more than 10,000 such societies are in existence, managing the savings and investments of 4.5 million people and total funds of £15 billion.

The decision not to allow any new registrations is a sign that the Government is willing to allow the sector to wither away. While the structure may have fallen out of favour in recent times, it would be better to examine whether it could be reformed and a new regulatory model put in place before consigning it to the annals of history. Given the lack of competition within the domestic banking sector and the difficulties experienced within the industry in Ireland in recent times, it could offer a valuable alternative means of providing pensions, savings or co-operative banking to people in a cost-effective manner.

The purpose of the Bill is to provide for various amendments to two bodies of legislation, the Friendly Societies Acts and the Industrial and Provident Societies Acts. The main amendment in the area of friendly societies provides for the closure of registration of new societies. It is vital that we re-examine this. Co-operatives throughout the country have done extraordinary work. We should always give tremendous credit to those who were members of the boards or committees of various co-operatives. Over recent years, committee members have become board members. When they were set up, contentious issues arose right across rural communities in this regard.

It would be remiss of me not to mention Mr. Liam Moynihan, who passed away this morning. He was a member of Kanturk Co-op Mart and a former member of Boherbue Co-op, one of the oldest dairy societies in the country. I pay tribute to him and all board members who served on co-operatives. Sometimes they were pilloried over what they did in their communities, but they always had the best interests of those communities and societies at heart. They always worked extremely hard with the management of their co-operatives to ensure the accounts and dividends were in order and that new businesses would be fought for. At times, they stood in the way of management that was perceived to be going in the wrong direction. Right across the country, we should always pay tribute to the board members, because they were operating on a voluntary basis. Until recent times, they were by and large untrained. I speak in particular of agricultural communities. They had very little training to be on boards but had their communities' best interests at heart. Some went on to be on national boards, such as that of the Irish Co-operative Organisation Society. All contributed enormously to their own communities. I ask the Government to try to reinvigorate the original spirit of the co-operatives in regard to housing and so forth. Those concerned have done invaluable service. In the United Kingdom, there are co-operatives pertaining to nearly every aspect of life, even in the funeral business.

I welcome the thrust of the Bill. The few points I am most concerned about are on friendly societies. I commend everybody who has worked in co-operatives since their inception in the late 19th century. The co-operatives were a breath of fresh air in communities that had few if any prospects. I am thankful for having had the opportunity to speak on the Bill.

Ní Bille conspóideach é seo. Mar a dúirt an tAire Stáit, is freagra é do na gealltanais d'earnáil na gcomharchumann a bhí sa chlár Rialtais. Ní chruthaíonn sé, mar a bhí geallta ag an Rialtas, creat chun féidireachtaí iomlán samhail na gcomharchumann a bhaint amach, go háirithe i réimsí cosúil le cúram leanaí, oideachas, tithíocht, aisfheistiú tithíochta, cosaint an chomhshaoil, cúrsaí iompair agus cúrsaí sláinte. Caithfidh mé a admháil go gcabhróidh an Bille seo le ceardchumainn a gcuid gnó a dhéanamh. Tugann an Bille deis do na comharchumainn tairbhí, ar nós scrúdú atreoraithe, a bhaint amach. Ach mar is eol don Aire Stáit, tá an Rialtas seo ag druidim chun deiridh. B'fhéidir go dtiocfaidh an deireadh le teacht an bhuiséid 2015. I mo thuairim, is é trademark an Rialtais seo ná teip polasaí a chur i bhfeidhm. Dá bhfaigheadh an tAire Airgeadais euró as gach teip an Rialtais gealltanais a chur i bhfeidhm, bheadh críoch leis an ngéarchéim eacnamaíochta sa tír.

Cúpla bliain ó shin, d'fhoilsigh Sinn Féin plean cuimsitheach le fostaíocht a choinneáil agus a chruthú. Leagamar amach tábhacht agus luach ghluaiseacht na gcomharchumann, go háirithe mar fhreagra don chúlú sa gheilleagar. Faoi láthair, tá 12,000 comharchumainn san Airgintín, le ballraíocht de 9.3 milliún duine. Shábháil oibrithe sa tír sin níos mó ná 200 gnóthaí teipthe a bhí ag earcú 15,000 duine. Seo ceacht uafásach tábhachtach don Rialtas seo. Ba cheart go mbeadh an ceacht seo foghlamtha le sé bliana anuas - go gcaithfimid féachaint thar na samhlacha gnó traidisiúnta. Ach leis an fhírinne a rá, is léir go bhfuil drogall ar na hAirí agus ar na bainisteoirí Rannach sinsearacha an samhail mhalartach a thuiscint. Is é tuairim earnáil na tionsclaíochta gur in ainneoin an cúlaithe sa gheilleagar agus an suaitheadh fisiceach, níl aon ghá don Rialtas nó do na Ranna réiteach uaillmhianach a thógáil.

Some 123 million co-operative members own 160,000 co-operative enterprises employing 5.4 million people across Europe. That is a phenomenal figure, which shows the energy and dynamism that exists within the sector. The Government acknowledged the potential of the co-operative movement in its programme for Government commitments three years ago. This Bill does improve the lot and function of co-operatives across the country, but there is no doubt in my mind that even after three years, the Government has not lived up to its objectives or the commitments made in the programme for Government. Ireland ranks among the lowest in the European Union for co-operative membership, enterprises and employees. If one explained to staff of the former enterprise agencies, the county enterprise boards, that one was seeking to set up a co-operative to sort out a particular business need, they would probably have stared back at one, wondering what one meant. At policy, departmental, ministerial and enterprise agency levels, co-operatives’ function and ability to tackle some of the major economic challenges were just not understood and, therefore, not acted upon.

In the document we launched a while ago, we identified a number of challenges facing the sector, including those addressed in this Bill. We also examined the need to develop management and entrepreneurial skills, the lack of data on co-operatives and the lack of understanding of the model among policy-makers. Critically, we acknowledged the need to recognise the value of co-operatives on a social basis and as economic contributors. We set out an initial strategy to develop the co-operative sector and identified the need for a co-operative model to be seen as an option for struggling viable businesses. The Government is not doing enough to support Ireland's indigenous business sector. Unfortunately, as I have stated here before, the cutbacks affecting Enterprise Ireland and the county enterprise boards, and the similar cutbacks affecting foreign direct investment organisations such as the IDA, indicate that the focus of the Government is heading continually towards foreign direct investment at the expense of indigenous business. We should realise that the sectors are not independent of each other but actually interdependent. The Government's enterprise strategy is staid and its failure on co-operatives is an example of this.

Although the Bill is uncontroversial, I wish to note the comments made by Senator Sean Barrett when the legislation was making its way through the Seanad. He robustly argued against the Government's decision to introduce an extinction clause for friendly societies. The Minister of State will have noticed that there are just 48 such societies remaining, with just three having registered over the past nine years. These societies provide for small life assurance benefits and sickness and death benefits for members. I could understand it if the Minister were making a decision to wind down the societies on the basis that something was going wrong with them, such as a scandal or problem, but that does not seem to be the reason they are being wound down. It seems the Government is not providing proper oversight of these organisations and is therefore seeking to wind them down.

The Minister of State mentioned the prudential supervision of friendly societies. As Deputy Moynihan noted, Britain has a totally different attitude in this regard and, obviously, it has seen the benefits these very small organisations bring to their members. They usually provide a service as efficiently as, if not better than, traditional institutions, and at a lower cost to their members. In Britain, the newly-formed Financial Conduct Authority is responsible for the oversight of 10,000 friendly societies, which manage the savings of 4.5 million people, which is not small fry.

Although he was asked why he was seeking to shut down the societies rather than develop them, I believe the Minister of State failed to offer any real explanation. This is another example of the Government's refusal to see beyond the traditional model of enterprise. Ireland has a very long and proud history of properly functioning co-operatives. The first thing we need to get into our minds is that the co-op is a model for a functioning, dynamic, profitable business, and that it offers economic solutions just as any other business can. It often does it more efficiently, for less cost and to the greater benefit of its members.

One of the major problems we have in society today is that there is a yawning gap between the earnings of management and those of the workers on the floor of a factory or an organisation. The co-ops typically do it in a different fashion. They have greater pay equality and a far more equal structure, and we need to take that on board. We need to make sure that the local enterprise organisations, or LEOs, that the Minister of State has worked upon previously are fully tooled up to deal with developing that end of the market. Co-ops have provided housing, finance and jobs in this State when nobody else would. As the previous speaker said, they enabled an agricultural revolution at the end of the 19th and the start of the 20th century, when a whole new sector of our society found itself owning land for the first time.

It is vital that we see the opportunity here. I welcome the benefits this Bill has created but I am still am not convinced the Government is taking this sector seriously. I will conclude my remarks by noting that while the Minister of State may bemoan my critical stance on this issue, I do not denigrate the work that has gone into this Bill. However, it is my job to hold the Minister of State to account. The Government promised big in the programme for Government but, unfortunately, has not delivered over three years in. I believe there needs to be a level playing field for co-operatives and that the Government needs to be ambitious for them.

Caithfidh go mbeidh fís uaillmhianach ag an Rialtas nuair atáimid ag caint faoi chomharchumainn. Ceapaim go bhfuil deis caillte againn sa Bhille seo.

I am glad to have the opportunity to speak on the Bill, which I welcome. I also welcome what is an important debate. I feel strongly that we need change and reform. We must constantly be vigilant and efficient when dealing with our financial services. We have to learn from the huge mistakes of the past and bring a bit of common sense and professionalism into our financial services, banking and the broader economy. The days of the gombeen men and women have to go, and reform is the only way that counts. If we do not do this, we let the country down but, above all, we let the citizens of the State down. It is important that we say this in regard to the legislation.

The Bill provides for the introduction of a number of changes to two codes of legislation, the Friendly Societies Acts and the Industrial and Provident Societies Acts. The Bill provides for the closure of registration of new friendly societies. The amendments in regard to co-operative societies are aimed at easing the regulatory burden on co-operatives and making the option of examinership available to the sector. These are positive measures in the Bill.

As I said in my introductory remarks, it is important that we do not take our eye off the ball when it comes to developing the Irish economy, financial services and, in particular, the SME sector. We have to look at this as a national asset and a wealth that we possess. Small businesses that employ between five and 20 people are at the heart of the economy, and they need a break and a lift. Issues such as commercial rates have to be dealt with. The important thing in regard to the SME sector is its results and the number of jobs it supplies, even in the downturn. We have to make this a part of the strategy. We regularly hear members of Government saying that the only game in town in order to get out of this mess is jobs, jobs and jobs. While I agree with that, I also feel that we have to focus strongly on the SME sector of the Irish economy.

We cannot rely totally on foreign investment. We have a very constructive and open policy in regard to the 100,000 to 120,000 jobs that exist as a result of the foreign investors. However, we need to realise that we have four times that number in employment in the small and medium enterprise sector. Given the Minister of State's specialisation in this area, I believe he will agree with the points I am making. Small businesses are making a massive contribution but they are also delivering on the ground in the local economy. That is the important thing. We need to up our game and, as we do so, we need to ensure that we assist these small businesses to get off their knees and get through these very difficult times.

It gets up my nose when I hear some people talking about particular aspects of different industries. We had this recently in regard to the broader debate on health and the alcohol issue. However, people often forget that 92,000 jobs are indirectly or directly connected to the drinks industry. This is something we must also consider. We must not blame people who want to go out and have a drink in moderation and enjoy life. Moderation is everything in life, and that is how people should approach it. It is also important to look at new ideas in regard to developing the economy.

Friendly societies developed as part of the mutual self-help movement in the 19th century, which included co-operatives, building societies, savings banks, credit unions and trade unions, and those societies are registered generally under the Friendly Society Acts 1896 to 1997. The various objectives of those societies that were registered included permitting the carrying out of financial activities, including the provision of financial benefits in regard to illness, old age or death and savings and loan activities, health insurance, life insurance and personal loans. As State intervention increased in the 20th century for the common good through the introduction of State-sponsored social welfare, coupled with the growth and development of the insurance business as an industry sector, the social purposes of the friendly societies begin to decline. There are currently only 35 of those societies active, of which six have been in operation for over 100 years, and many are at a relatively low level of activity. Just over half are involved to one extent or another in the provision of financial services or benefits to members, and these are mostly medical and death benefits.

The five largest societies, in terms of both assets and annual income, hold assets of more than €150 million, and their volume of business in 2011-12 was approximately €70 million. Four of these societies have a predominantly public sector membership, two offering what might generally be termed health insurance - St. Paul's Garda Medical Aid Society and the Prison Officers' Medical Aid Society, both registered with the Health Insurance Authority as restricted membership undertakings. The fifth is the last remaining active specially authorised loan society, a society which is authorised to grant loans to members. In all, 16 societies hold assets in excess of €1 million.

There are just six societies that have been on the register since 2000, none of which is involved in the provision of financial services for their members.

Debate adjourned.