Self-Employed and the SME Sector: Motion (Resumed) [Private Members]

The following motion was moved by Deputy Dara Calleary on Tuesday, 21 April 2015:
That Dáil Éireann:
notes:
— the importance of the self-employed and micro, small and medium sized enterprises (SME) sectors to the Irish economy with 350,000 self-employed people and 580,000 people in enterprises of 50 people or less;
— the disparity in tax treatment between the self-employed and PAYE sectors;
— that certain social welfare benefits are not available to self-employed people such as Jobseeker’s Benefit and Illness Benefit;
— the continuing difficulties being experienced by the self-employed and SMEs in accessing affordable credit; and
— that Irish SMEs pay much higher interest rates than other EU countries for credit;
recognises:
— the domestic SME sector is diverse in nature and employs workers with a wide range of skills in all parts of the country; and
— the success of Ireland in attracting foreign direct investment over many decades and the importance of giving a similar level of priority to the domestic enterprises; and
calls for:
— the introduction of an earned income tax credit for the self-employed on a phased basis of equal value to the PAYE tax credit;
— the provision, on a voluntary basis, of a full range of social protection payments, including Jobseeker’s Benefit and Illness Benefit to self-employed PRSI contributors as part of a commitment to fostering an entrepreneurial culture as well as enhancing social solidarity;
— an extensive information campaign by the Department of Social Protection to highlight the benefits and services available to self-employed people;
— an expansion of the role of the Strategic Banking Corporation of Ireland to allow it to lend directly to SMEs and the self-employed with expansion opportunities;
— incentivisation of entrepreneurs to set up new businesses by providing tapered relief from Capital Gains Tax; and an extension to the Credit Guarantee Scheme to assist Irish businesses whose loans are at risk of being sold to investment funds to refinance at affordable rates.
Debate resumed on amendment No. 1:
To delete all words after "Dáil Éireann" and substitute the following:
"acknowledges:
— the central role of the self-employed and micro, small and medium sized enterprises (SME) in the jobs recovery, which have generated the majority of the 90,000 extra jobs, with particularly strong performance by enterprises supported by Enterprise Ireland (EI) and the Local Enterprise Offices (LEO); and
— the central role of the Action Plan for Jobs (APJ) process in improving each year the opportunities for SMEs, which sets out actions and is designed to achieve specific impacts in terms of exports, start-ups, access to finance, market penetration, innovation, access to talent, recruitment, and the environment for doing business; and
notes in particular:
— the improvements in the tax environment for SMEs that have been made;
— the new sources of finance that are being made available to SMEs;
— the new focus on start-ups since the launch of Ireland's first strategy for entrepreneurship: National Policy Statement on Entrepreneurship in Ireland;
— the success of the Pathways to Work strategy, new measures to help SMEs recruit such as JobsPlus and the roll out of a network of Intreo offices that work closely with the new LEOs to improve recruitment by SMEs off the Live Register; and
— that it resolves to continue to engage with SMEs on a systematic basis and to develop policy initiative's that will assist their growth in the Budget and in the wider policy arena."
- (Minister of State at the Department of Jobs, Enterprise and Innovation, Damien English)

Deputy Maureen O'Sullivan is sharing time with Deputies Seamus Healy, Finian McGrath, Shane Ross and Michael Fitzmaurice. Speakers have two minutes each.

First, I wish to repeat a point I made on another occasion. During St. Patrick's week there is much emphasis on foreign direct investment and Ministers and Ministers of State going abroad. We need something similar for small and medium enterprises in this country. As foreign direct investment is facilitated and encouraged, we need the same for indigenous industries.

So much mitigates against small and medium businesses. I will give one example. A small café in my constituency is being brought to court by Irish Water because it cannot pay a €300 permit application to discharge effluent to the sewer. It is a small business that pays its rates but is in danger of having to lose an employee. A similar business in Northern Ireland would not have to pay by virtue of size and I think this must be looked at.

PRSI is crippling small businesses that are trying to start up. If "employ, employ, employ" is the mantra, there must be leeway on that for businesses that are just starting out. Another difficulty is the length of time it takes to prepare applications for grants. Some small businesses might have no hope of getting these grants and some help at the beginning or a few pertinent questions might have pointed them in the right direction. We know that procurement has had very negative effects on some businesses, particularly the printing industry. I know of cases where the lowest-priced tender has been accepted but it has not worked out in the long run.

We know there is disparity in tax treatment and social welfare benefits. There is no doubt that the self-employed suffer disproportionately. It is also skewing the figures on the live register because certain unemployed people are unable to register. I support the point about tax credits. PAYE workers are very aware of their rights. Most of the companies they work for have salaries sections and human resources sections but small and medium businesses are at a disadvantage here. In my teaching days, I was very aware of all the incentives for young entrepreneurship. We have seen the Young Scientist competition. We need to encourage innovation and inventiveness and as there are so many tax breaks for foreign direct investment, we need a level playing field for small and medium businesses here.

I welcome the opportunity to speak on this issue and to confirm my support for the motion. I have no doubt that sustained and focused support for small and medium-sized industry is vital for job creation and to deal with the jobs crisis. However, this alone will not solve the unemployment crisis. Private enterprise alone will not solve the unemployment crisis. A total of 350,000 people are unemployed while a further 80,000 people are on various schemes. Simply doing what the Government says - creating the environment for job creation - is not good enough and will not deal with the huge level of unemployment that exists.

We need the State to take direct action in job creation and to create employment itself in infrastructural services such as roads. Rather than cutting the budget for roads by over €1.5 million this year in south Tipperary, we should be putting money into roads and job creation. This would create more jobs down the road and in the general retail industry. The situation is similar with housing. About 90,000 families are on the housing list. There needs to be a significant job creation programme through building houses for people on the local authority list. This would create jobs, provide taxes for the Exchequer and save on social welfare payments. Jobs created by the Government in this and other infrastructural areas are necessary.

I thank the Acting Chairman for the opportunity to speak on this urgent and very important motion on small and medium-sized enterprises, which make a huge contribution to the Irish economy, particularly employment. In the region of 350,000 people are self-employed while 580,000 people work in enterprises with 50 people or less. This is often forgotten about in the broader economic debate. I strongly support these businesses, particularly small businesses in my constituency of Dublin Bay North. I strongly support all businesses on the northside of Dublin. It is essential we get behind them.

I urge the Minister and the Government to implement the six proposals in this motion. I would like to see the introduction of an earned income tax credit for the self-employed on a phased basis that is equal to the PAYE tax credit. I would also like to see the provision on a voluntary basis of a full range of social protection payments, including extending jobseeker's benefit and illness benefit to self-employed PRSI contributors as part of a commitment to foster an entrepreneurial culture and to enhance social solidarity. We also need an extensive information campaign by the Department of Social Protection to highlight the benefits and services available to self-employed people. We need to see the expansion of the role of the Strategic Banking Corporation of Ireland, SBCI, to allow it to lend directly to SMEs and self-employed people with expansion opportunities and we need to incentivise entrepreneurs to set up new businesses by providing relief from capital gains tax. Finally, we need to see the extension of the credit guarantee scheme to assist Irish businesses whose loans are at risk of being sold to investment funds to re-finance at affordable rates.

I urge the Minister and Government to focus on the Cadbury plant in Coolock which is under pressure. We need to protect this plant and these jobs in Coolock. The plant has an excellent workforce that needs our support. I want to see more inter-agency involvement in this excellent factory in Coolock.

I have been in this House for a very short period of time. When I get up to speak, I wonder why we so often have had a debate of this kind and why small businesses are so often the subject of discontent on the part of the Opposition and provide such fertile ground for political opponents of the Government. The reason is not much has been done for them and they are still suffering despite the apparent recovery of the economy.

I think there are two reasons for this. The first is a reason touched upon by Deputy Maureen O'Sullivan. Multinationals offer some sort of prop for the Administration because they provide the employment which prevents more extreme measures by unemployed people and relieves the unemployment figures resulting in figures of around 10%. That takes the pressure off the Government to do anything or anything particularly significant about small businesses. Perhaps more than anybody else in this House, I support the multinational sector in this country. I think it is a magnificent contribution to the economy. The figures justify that. However, we should be careful because warnings are coming from very reputable, indeed forensic, sources saying quite clearly that this economy is beginning to depend too much on foreign investment and that if foreign investors, who after all have no loyalty to this country, decide to leave or because of pressure coming from the US and France about our corporate tax rate decide it is time for them to reduce, not to come to or depart from Ireland, we will not have nurtured our small businesses in the way we should and we will not have any reserves left to defend the economy.

I commend Deputy Calleary for bringing forward this motion. Most people in the private sector around the country are employed by small and medium-sized businesses - one, two, three and four-person operations.

Entrepreneurs never got a hand or leg up and had to do things on their own. Many of them have employed people countrywide, fought their way through the recession and struggled on without any real help.

Many people have approached me over the past few months about setting up a business, which is great for the country and communities. However, there is little in terms of incentives or assistance to help the person who has not got much funding behind him or her. We need to address the situation whereby the red carpet is rolled out for companies locating here under the guise of foreign direct investment while nothing but obstacles and paperwork are put in the way of Paddy Irishman. We need to look at this in a new way.

As stated by Deputy Finian McGrath, there are many companies whose loans have been sold on by the banks. The banks are treating the people concerned with contempt and often refuse even to engage with them. I acknowledge and welcome that it is proposed to introduce incentives in this area. However, we need also to ensure that SMEs are protected and given tax breaks. Like many other Members of this House, I am an employer. In the case of a business that goes bust tomorrow, while all of the employees can sign on the following day and the employer may have a family to raise, the only thing he or she gets is reams of paperwork and the prospect of emigration. This must change. We need to ensure proper tax breaks are put in place for the private sector.

The next speaker is Deputy John O'Mahony who is sharing time with Deputies Áine Collins, Michelle Mulherin, Paul Connaughton, Seán Kyne, Dan Neville, Anthony Lawlor, Marcella Corcoran Kennedy, Eamonn Maloney, Mary Mitchell O'Connor, Liam Twomey, Tom Barry and Peter Fitzpatrick.

I welcome the opportunity to contribute briefly to this debate, which is timely. As stated by previous speakers, while much of the focus in the past three or four years has been on the large multinationals and foreign direct investment that has helped to rescue the country and provide 80,000 new jobs here, there is much that needs to happen under the radar. In my own constituency of Mayo, there has been a 16% decrease in unemployment. A major contributor in this regard has been, as stated by Deputy Fitzmaurice, the one or two jobs created by small businesses.

I welcome the fact that the Action Plan for Jobs 2015 introduced by the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, focuses on small business and the need to increase supports in this area and to ensure businesses are aware of the supports available on a one-stop-shop basis through the local enterprise offices and so on. The plan also contains measures to reduce the amount of red tape in this area and to support job creation in the domestic economy, in particular in the retail, construction, agriculture and food sectors. As stated by Deputy Fitzmaurice, there is a need to end the discriminatory tax treatment of the self-employed and to allow them access entitlements when their business fails and they become unemployed. People must be encouraged to take risks. There needs to be a safety net in place for the people and entrepreneurs who create business and jobs. I understand that the Minister for Social Protection, Deputy Burton, is addressing those issues. I hope that some of them will be reflected in the upcoming budget.

It is important to highlight the plight of the SME sector and the self-employed. In my estimation, this problem first arose between 2003 and 2004 and again in 2008 when the Celtic tiger and construction was the only show in town. While SMEs did not need support during that period, it was also not available. Work around the putting in place of the necessary supports required has been ongoing during the past few years of this Government's term in office. This needs to continue and the issues raised by other speakers need to be addressed soon.

I welcome the opportunity to speak on this motion. It is not very often we are all agreed on a particular issue. It is ironic that this motion was brought forward by Fianna Fáil given it oversaw many of the problems in this area during the more than 14 years it was in office and there was money available to address them. However, that is in the past and we must look to the future.

Small business is the cornerstone of this economy. This is an issue about which I have spoken many times since my entry into public life in 2011. While much has been done, more needs to be done. While measures such as VAT reductions in particular sectors, including the building and food sectors, have been introduced we need now to focus our attention on how we can ensure equality in the self-employed sector so that everybody has the same entitlements. While there may have been a view in the past that self-employed people were creaming from cash and so on, that day is long gone. As I have stated publicly before, the Revenue Commissioners is now an effective arm of the State. Everybody should be treated equally. As I have often said, we need to change our approach and attitude to failure. When a person or business fails, we need to support them. A self-employed person who has paid PRSI should be entitled, without undergoing a means test, to nine months' social welfare benefit. We would all like this to be the case.

It is hoped that after 22 May we will have marriage equality in this country and that in the future we will have tax equality between the self-employed and PAYE employees. This is an important issue in the context of job growth over the next number of years. We also have to encourage entrepreneurship because without fresh ideas there will be no growth in this area. Reference was made by other speakers to finance. I am glad to note that Bank of Ireland has taken up the option to refinance loans taken out with banks that have left this country. There is a lot more to do in this area. I look forward to further debate on this issue.

I welcome the opportunity to speak briefly on this motion. I propose to focus on the problem of credit and cash flow for small and medium-sized businesses. Despite the many good initiatives, such as the microfinance scheme, introduced by this Government to assist existing business and new start-ups, there is still a problem in this area about which we are hearing all the time. Basically, this issue relates back to the banks in terms of them crucifying SMEs through overdraft and term loan rates. That is the reality. The banks need a reality check. Like everybody else, they need the economy to function.

Small and medium-sized businesses are the backbone of our economy. They are the businesses to whom we look in terms of job creation. The banks have been recapitalised and the banking system has been restored, but this does not mean it should be a case of business as usual. The banks need to assist people with their mortgages and to assist businesses trying to get up and running and create jobs. Not alone were the banks bought out by the State supported by the taxpayers of this country, but so was the whole banking system. The banks would want to remember this. It cannot be a case of business as usual. I support fully the Government doing all it can to bring pressure to bear on the banks and to keep them in line. As things stand, the banks are undermining the very good efforts of all involved, including the Ministers for Jobs, Enterprise and Innovation and Finance.

There has been much talk about mortgages and businesses operating on credit cards, in respect of which the APR is 22%. This is what is happening. It is ridiculous and unjustifiable considering where we have come from. We need a paradigm shift in terms of how our banking system works. It cannot separate itself from the social consequences of its actions and, now, the economic consequences in the case of small businesses.

I thank the Chair for the opportunity to speak on this. It is certainly a worthwhile topic. In the space of two minutes, there are only two or three areas I will cover.

If we all believe in the mantra that Government does not create jobs and it simply creates the environment for jobs to be created, there is a number of areas on which we must focus. It was stated previously that we need to have more supports for businesses to set up. Many of those I have met in the past few months who set up businesses ten or 15 years ago had no support and what they say now is we should take away the bureaucracy and the red tape. If the Minister did that alone, he would give them a better opportunity, not only to keep creating jobs but expanding where they can create these jobs. It is not so much what we can give to these people but what we can do to help them streamline the way they do their business.

Another area of considerable concern is Government procurement. The Government has set out to save millions of euro on procurement and it all sounds good because it will streamline where it gets its products from. However, this is crippling a number of SMEs because it makes it impossible for small-to-medium-sized businesses to tender for this work. For example, the Irish School Art Supply Federation operates in a small niche market. I refer to SMEs employing five, ten or 15 employees supplying products to the local primary and secondary schools. We will save money on the procurement of these products, but is there anyone in that procurement office thinking of the potential job losses on the flip-side of it? It is nice to go back and say we saved the State and the taxpayer €50 million, €90 million or €100 million, but what did we cost ourselves in social protection where businesses could not tender for these products and all of a sudden closed? I am aware of two family-run businesses, one in Dublin and one in Mayo, in the past three or four weeks that have closed which would have had the potential to employ more workers and what is really killing us in that area is a lack of joined-up thinking. The guys in procurement will save the money, but did they talk to the Department of Social Protection? Did they ask them who is going on the live register because of that? This is what is crippling SMEs. Much has been done, but if we simply got rid of the red tape, took care of the bureaucracy and listened to the guys on the ground, we would stand a lot better off.

I concur with a lot of what has been said by my colleagues. Whilst this is about SMEs, it is important to note that the restoration in international confidence in this country over the past number of years is of considerable importance in the multinational sector and there is such a significant connection in many SMEs that get business from a thriving multinational sector. Up and down the country, there are SMEs that benefit from the multinational sector.

The Joint Committee on Jobs, Enterprise and Innovation of which I am a member launched a cross-party report a number of weeks ago on sustaining and revitalising rural towns and centres, many of which have become denuded of residents and businesses. As with any such report, we had stakeholders in, including businesses, to give their views over the previous number of months and we toured various areas as well. Some of the issues businesses raised are the ones that are thrown out much of the time about rates. Parking was a big issue. For example, there were concerns that consumers coming into town were afraid of over-zealous parking attendants and not willing to stay around in town as a result. Also, they raised the need for incentives for empty and derelict units in towns and villages. As has been raised previously, we also need to look at the potential to bring residents back into town centres and villages through living over shops or businesses. That, in itself, is an incentive. It would provider greater footfall and more people around the town, and that would be better for business.

I also concur that there is an anomaly in the lack of supports for self-employed who go out of business. Deputy Fitzmaurice and Deputy Collins have touched on this. It is most important and must be dealt with. It is not fair that those who put their life and soul into a business can end up with nothing whereas their employees rightly get the benefits. The employers get nothing and that needs to be changed as soon as possible.

I welcome an opportunity to contribute to the debate.

The self-employed and micro, small and medium-sized businesses play a pivotal role in the Irish economy, with 350,000 self-employed and 580,000 working in enterprises of 50 employees or less. The annual results for the local enterprise offices showed at the end of 2014 the total of direct employment of the 6,058 client companies stood at 31,326. There were 7,305 new jobs created during 2014 in gross terms. Taking into account the losses in 2014, there was an increase of 14% in those employed in the companies which are clients of the local enterprise offices. However, there are some barriers which hinder growth in the area.

There is an urgent need to end discrimination against the self-employed and small businesses. The key issues identified include the tax discrepancy between the self-employed and PAYE earners. There is also a discrepancy in benefits from the Department of Social Protection. This manifested itself during the economic crash when I met a former self-employed person who was dependent on extended family to feed his family. The person told me that after six months his brother could not continue supporting two families. It took much persuasion for the Department to grant unemployment assistance but that improved over the period.

Other difficulties identified include training and development supports, such as mentoring. There are also difficulties with succession and there must be ease of transition of business ownership down through family generations.

There is also a need for better communications regarding existing State supports, including the SME online information. The supporting online tool brings together 80 Government business supports into one website to help small businesses obtain information and avail of the supports available to them. However, more needs to be done to communicate this information.

The economic recovery now presents opportunities for small businesses and the self-employed that did not exist this time last year and we must ensure that the State helps them to take advantage of this. Small businesses are the cornerstone of the sustainable economy in cities, towns and villages.

I very much welcome the opportunity to speak on this. It is great to see Fianna Fáil bringing a motion forward like this. It is typical of Fianna Fáil. It has had its head in the sand for the past four years, it has pulled its head out and the glow of a successful economic recovery is here for everyone to see. It is amazing that 300,000 workers lost their jobs in the last three years of the previous Fianna Fáil Government, most of whom were in SMEs. It only shows how much Fianna Fáil cared about SMEs that, as soon as there is the glow of economic success, it brings forward this type of motion. Some €1 billion was spent in times of full employment by the FÁS training scheme under a previous Minister, Deputy Michéal Martin.

There are a couple of things that we still need to do with regard to tax equality between the self-employed and PAYE workers. We need to allow the self-employed get the PAYE allowance that is for the PAYE workers. I would like to see other measures available so that the self-employed and small and medium-sized businesses can achieve tax equality.

This Government has brought forward a number of positive schemes. I was at an expo in Kildare today. All of those in the business sector there were positive about such a small issue as online trading vouchers which allow small companies set up online to be able to find new access to markets. It is important that we, as a Government, continue to support them in that regard. Microfinance, even though slow starting off, has proved to be successful of late because businesses which cannot access finance through the normal banks have been able to access it through microfinance.

Governments are judged not on what they say but on what they do and what they achieve, and this Government achieves a great deal of success in aiding and assisting the small and medium-sized enterprises.

I very much welcome the opportunity to speak on this timely motion. I will focus on a couple of particular points.

I am really excited that there seems to be a proactive role being taken by the local enterprise offices, which have been given more of an economic development role in terms of working with Enterprise Ireland and IDA Ireland and which have been challenged to do so by the Minister, Deputy Richard Bruton, and his officials in order to come up with development plans for the region.

I and others have called for the Government to focus on what was happening in rural areas. We were delighted to see the boost in job creation from foreign direct investment coming into the cities and larger towns, but we want to see that rolling out across the country. I am really looking forward to the Minister announcing actions for the midlands region, which is the first pilot region identified.

In terms of what jobs are being created, often we focus on the foreign direct investment which gets significant coverage on RTE and in other media, but what is going on our own communities is really exciting as well. If one looks at what Enterprise Ireland and the LEOs are doing, for example, in Offaly, the welcome information we got recently was that the LEO had contributed to the creation of 300 jobs but there is nobody carrying lengthy programmes about that. I want to see Enterprise Ireland and the LEOs more regularly letting the public know what is going on and the amount of companies they support locally.

I have in mind indigenous companies like Grant Engineering and Glenisk, innovative dynamic companies there for the long haul. They are based in their communities and they want to stay there. These are the companies on which we should also be focusing.

Fine Gael has a Standing Up for Small Business campaign which is fantastic. We will be talking to people, in the context of the surveys we want to conduct, to see what they really want. Others have touched on various points but I see that I have run out of time.

There have been many victims of the collapse of the economy, principally in the construction industry, when the Celtic tiger came to an end. In the immediate post-Celtic tiger period, naturally, we were all focused on those who lost their jobs, those who became unemployed, those who were emigrating and the people who got into difficulties with their mortgages, etc.

The motion focuses on those who operated small and medium-sized enterprises, including people who, as we now know, had little experience but nevertheless took on the challenge. Alongside these are a great many self-employed people, especially in the building industry, who perhaps only employed one or two people. They found themselves in entirely new territory. We all know that given the environment and the confidence at the time - I am referring to 2006 and 2007 - there was a feeling in many sectors and certainly among many self-employed people that the boom would never end. The nature of the economy tends to be cyclical and this means we can go from one extreme to the other. We all know how it ended. Some of the victims of the fallout are the people we are talking about this evening.

It was not only people involved in the construction industry but those in auxiliary industries as well, particularly in this city and the constituency that I represent who, almost by default, found themselves victims of what happened. I am referring to people who invested in the taxi industry, for example. What happened in this city probably applied in most other cities in the country. People bought into this and spent a good deal of money. Then, when consumer spending collapsed, people, almost like a switch being turned off, stopped using taxis, whereas prior to that those in the taxi industry were able to make a living - in some cases a good living - out of it. It came as a shock to the system because, naturally, people thought this would continue, there was a good deal of money circulating and people had spending power.

Many small businesses and self-employed people survived the aftermath of the collapse. Many people who were involved in the boom, whether SME operators or otherwise, thought they did not need protection or some form of fall-back if the economy was to collapse. Although some people accumulated savings for whatever might happen, many others, not necessarily by design, found themselves in the most awful situation. These people had never been to a social welfare office in their lives. They had never applied for social welfare and had avoided going there even though their businesses collapsed. I imagine every other Deputy is has had the same experience as me. These are the cases we hear about in our clinics.

There was a reference last night to the September 2013 report published by the Tánaiste and Minister for Social Protection on the tax system and social welfare. I agree with the recommendation whereby the option is there for people who are self-employed to avail of the social welfare system. If anything is to come out of this debate, it is that people should protect themselves, particularly those who want to be self-employed, and not allow this to happen again.

Last night, the Minister of State, Deputy English, said that Irish businesses need to start to survive and scale up. The principal complaint I receive from self-employed traders and small business owners relates to access to credit. How can they start, never mind survive and scale up, without the finance to do so? Over 90% of small businesses are dependent on traditional methods of loans and finance. Only this month I called on the Minister for Finance to meet the banks and urge them to pass on the lower interest rates they are receiving from the European Central Bank to mortgage holders. Again tonight I call on the Minister of State to urge the banks to provide real credit opportunities to small and medium-sized enterprises.

This Government has done a good deal and will continue to do much. I know that Microfinance Ireland, the online vouchers and local enterprise offices are aiding small and medium-sized enterprises but I am aware of an early stage start-up that has received a large grant or investment from Enterprise Ireland. The start-up employs six people and, with the right supports, it will continue to grow and employ more. The owner applied for a small business loan but was rejected by the banks because the business was pre-revenue. How can it become revenue-generating without the finance and supports to allow it to grow and prosper? It is unacceptable for the banks to play hardball when two thirds of all new Irish jobs come from start-ups and the tax that the self-employed pay is going towards the bank bailout.

The second biggest complaint I receive in this area relates to the lack of financial support for small business owners if they go out of business, despite the fact that they pay PRSI. The self-employed generate employment locally, pay PRSI and the universal social charge. If a business does not succeed the employees receive unemployment assistance but the self-employed do not. I am keen to see this addressed in the next budget. Our economy is moving in the right direction but we need to do more.

Our small and medium-sized businesses are not only surviving but are growing in our economy because recovery is on its way. I will give an indication of some of the difficulties small and medium-sized businesses have in this country. A meeting will take place tomorrow week in the Tower Hotel in Waterford between 8.30 a.m. and 1.30 p.m. The idea is to give advice and support - the Minister of State, who is in the House, will be speaking at the event - to small and medium-sized enterprises. Some 25 State agencies will be available on the day for those who wish to start up or grow their businesses. This gives an indication of the amount, and scope, of regulation, legislation and everything else that goes with small and medium-sized businesses with which people have to deal.

People talk about the difficulties they have in business in this country today but the reason is they need to know so much to run a successful business, which is important. I am proud to be a member of the pro-business group within Fine Gael. It is important to give support to businesses because it is not only the employers and their families who matter but also the employees and their families who are so dependent on these businesses not only surviving, but growing in the future.

I know the Minister is doing his absolute best. The Minister for Finance, Deputy Noonan, and the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, should be commended on the excellent work they have done in recent years to turn around a situation in which we were losing thousands of jobs every month to a situation where we are back to creating jobs and enterprise. I know that Deputy Kelleher, who is avidly waiting to speak, as a former Minister of State with responsibility for enterprise, will no doubt be singing the praises of the Ministers to whom I have referred.

I welcome the opportunity to speak. Fine Gael is and always has been the party for small business persons and the self-employed. We are a pro-enterprise party and the facts fully support this. Over 90,000 new jobs have been created as a result of the Action Plan for Jobs in 2012.

Every region has seen an increase. In my constituency of Louth and east Meath, unemployment has fallen by over 20% since March 2011. Indeed, in areas such as Ardee, Drogheda and Dundalk, we have seen decreases of up to 29%. In real terms, this means an additional 3,500 people are employed in my constituency since Fine Gael took power in 2011. Over the past two years, companies such as eBay, PayPal, SalesSense and National Pen have created more than 1,100 new jobs in Dundalk, while in Drogheda, companies such as Moorehall Lodge, Outsource Support Services and Becton Dickinson have created more than 130 new jobs.

This is in stark contrast to Fianna Fáil's time in government. Its record of supporting small business in this country is one of neglect and discrimination, which can be seen by the fact that more than 300,000 jobs were lost in the last three years of its time in government. Its attempt now to try to establish a policy on small business is, quite frankly, too little, too late, and the people will see that for themselves. It is nothing but a panicked policy scramble after its total lack of policies has been exposed. During its time in government, Fianna Fáil destroyed the economy by supporting its friends in big business and the construction industry and neglecting the small business person and the self-employed. My party, Fine Gael, is the party that can be trusted to manage our economy and to support the SME sector. SMEs are the cornerstone of the sustainable economy we are now building.

The creation of new jobs has many benefits, including more disposable income for people and increased tax revenue for the Government which can be invested in other services, including our schools, hospitals, local infrastructure and the tourism sector, to name just a few areas. Indeed, if I look at my own county of Louth, we are beginning to reap the benefits of the increased expenditure in the tourism sector. Last year we saw more than 108,000 overseas visitors in the area, generating more than €43 million in revenue for local business. Areas such as Carlingford, Dundalk, Drogheda and the Boyne valley have benefited greatly from this investment. Schools in the area have received more than €57 million in capital funding, regional and local roads have received more than €25 million in investment and sports clubs have received more than €3 million.

I call Deputy Michael Kitt, who is sharing time with Deputies Kelleher, Moynihan and Troy.

I commend Deputy Dara Calleary on the motion. He has rightly pointed out the importance of small and medium enterprises and the fact that 350,000 self-employed people are involved in this sector. It is important to acknowledge the work of small and medium enterprises, which account for a great majority of all active business enterprises in the Republic, employing 68% of the workforce and generating just over half of the State's annual turnover, according to the Central Statistics Office.

We know Ireland is acknowledged as a world leader in attracting foreign direct investment, with 160,000 people employed by multinationals. That is all the more reason to give more prominence to the role of the self-employed and business owners in the economy. There is great diversity in the SME sector, ranging from small engineering firms to local supermarkets. While we have a worldwide reputation for exports, particularly in the agriculture sector, more than half of the workforce in Ireland - around 56% - work for native companies that do not export anything. Therefore, unemployment and the jobs crisis cannot be solved by focusing on foreign direct investment alone. If we support the SME sector, and I hope we do, we will ensure there are job opportunities for those with traditional skills as well as people with high-tech qualifications.

A number of recommendations have been made on this side of the House. For example, it is important to increase PRSI benefits for the self-employed, the importance of access to credit for the SME sector cannot be stressed enough, and we must end the disparity in tax treatment between the self-employed and PAYE workers.

The CSO's Business in Ireland 2012 study provides an interesting snapshot of the importance of small business to the Irish economy. The study indicates that while SMEs employ almost seven in every ten workers, they account for less than half of the State's gross added value. In other words, we are relying more and more on foreign multinationals. Other CSO figures going back to June 2012 show that there were 185,500 active businesses in operation here, employing 1.2 million workers. Over 90% of these SME businesses were classified as microenterprises with fewer than ten employees.

I would like to give the example of Ballinasloe Area Community Development Limited, or BACD, a volunteer company run by a board of directors which was set up in 1999. The prime aim of that company was to create jobs in Ballinasloe following the loss of approximately 1,300 jobs at AT Cross, Dubarry and Square D. This company had the author of the CEDRA report, Professor Cathal O'Donoghue, as a guest speaker at its AGM last year, and the chief executive of Action for Market Towns, Mr. Chris Wade, came from the UK on a fact-finding mission to Ballinasloe. Only last week, the Minister of State, Deputy Ann Phelan, addressed a meeting of BACD in Ballinasloe on the €250 million rural development programme. There are local people in Ballinasloe who are very anxious to work together on job creation.

What has been very disappointing is the fact that no funding has been provided to the community enterprise scheme for business development management training since 2012. A replacement scheme, the regional action plan for jobs, was announced in February of this year, but community enterprise centres are still awaiting further details of the scheme. It is also disappointing that there is no information on site visits by IDA or Enterprise Ireland clients to Ballinasloe and other smaller towns. The same is true for many market towns or smaller towns in Counties Galway and Roscommon. The focus always seem to be centred around Galway city, while other towns are described as being so many miles or so many minutes from Galway city. We really have to look at that and try to help out these towns.

Such towns used to have town councils, which played a major role in trying to develop industry, but since these councils were abolished, the towns feel they are being forgotten by the IDA and Enterprise Ireland. There should at least be information in the Minister's Department on the question of site visits to these towns. This information is available for other towns, so why is it not available for Ballinasloe, Tuam or Loughrea?

There is also the issue of helping those SMEs in distress in regard to practical issues such as accountancy fees in order to support applications for new credit or restructuring with the banks. There is also the tax disparity between PAYE workers and the self-employed, which should be highlighted. To give one example, a self-employed single person on an income of €15,000 pays almost six times as much tax and PRSI as an employee on the same income, which shows the disparity that exists. This should be tackled in order to help the SME sector.

I welcome the opportunity to speak on the motion, which is timely for many reasons. Given that we talk about small and medium-sized businesses being the engine of the economy and one of the main drivers of economic growth in all regions, it is correct to consistently put down motions to encourage and support them. We need to highlight the inadequacies of various policies from whatever agency or section of Government, or from the Government itself. That is something that should be done constantly, regardless of who is in government.

The SME sector is clearly the powerhouse of economic growth, very often without the same regard and acknowledgement that is paid to announcements of job creation by foreign direct investment. Of course, foreign direct investment is critical for many reasons, and we all know why it is so important to the economy. There have been spin-offs from foreign direct investment in small and medium-sized businesses and start-ups, which are a critical component of the evolving and developing enterprise culture in the high-tech area and many other areas. However, in terms of what one might call genuine indigenous small business - be it somebody with an idea, be it the welder in west Cork making and fixing trailers or be it the shopkeeper on the high street in any regional town throughout the country - the picture is diverse and varied. There are a few common threads, the most obvious being the innate enterprise culture, whereby some people just get up and get on with it even though they sometimes face a daunting challenge in starting up their own businesses. Of course there are risks involved, which is why we should be encouraging and rewarding people. We need a paradigm shift, not only in the thinking of State agencies but in society in general, in regard to how we view a person who fails. There have been many failures in recent times because of the downturn in the economy, but the one thing that should not be done is to vilify these people or to point the finger with some sort of view that they failed. Any person who is willing to start a business and take that risk should be encouraged. Yes, many will fail, but the real definition of failure is not to learn from it or not to try again. The State should also be of that view in its interaction with people who are establishing a business, and there should be supports in place for the times when they fail.

The idea that a self-employed person whose business has failed has to become a pauper before he or she qualifies for jobseeker's assistance is unacceptable. We have to be more humane and understanding of the pressures a self-employed person is under in terms of the risk to his or her investment. If things do go wrong, there is nothing, not even a parachute or blanket, available to soften the fall. That has to be addressed. It is not an attack on the Government, but there seems to be a blockage in our attitude to people who take risks and are almost vilified not just conceptually, but also financially by the State, when the rewards do not come. We need a paradigm shift in that area.

There is no point in continuing with the pretence that the banks are lending to small and medium-sized businesses. They are pretending to the Government that they are lending to small and medium-sized business. When I was in government, they pretended the same to me. We received reports from the banks every month with sheets on new lending, which actually involved pretending that regurgitated lending, overdrafts which had been changed to term loans and restructuring loans was new lending. We know from the figures available that the pretence is continuing and we need to examine the impact the squeeze on credit is having on many micro, small and medium-sized businesses. We also need to consider the impact of the squeeze on seed and venture capital on start-ups. The money is not available to accommodate the significant potential of the people in terms of entrepreneurship and risk.

Seed capital, venture capital and access to credit needs to be set free. The credit guarantees and supports for small and medium start-ups are welcome, but the one major issue is the lack of credit. Enterprise Ireland put people with some competence and expertise into the banks so that they could assist in training their business lenders in the process of examining profit and loss, balance sheets and business plans, and making assessments accordingly. The banks did not have the capacity to do that themselves. There are still major deficiencies in the banks and all they are trying to do is to keep their capital tied up. They do not want to lend or take any risks. All they want to do is to keep improving their balance sheets for one purpose only, that is, profit and sell off. There are constant conflicts. We need to get our house in order in that regard.

Another glaringly obvious obstacle is broadband availability. If we are to encourage regional development, the self-employed and those who work from home, a basic essential tool of any modern economy in the developed world is access to broadband. There are doctors in some parts of the country who still have to drive up hills with their mobile phones to receive information because they do not have access to broadband or 4G. We have to accept that this is a glaring omission in the infrastructure of small and medium-sized businesses.

One of the most feared sentences in the world, and definitely in Ireland, for any small or medium-sized business owner is: "I am from the Government and I am here to help." There is no doubt there is still an element of that. We have ten regulatory bodies to oversee small and medium-sized businesses. If a person wants to start a small or medium-sized business, he or she has to have a business plan and try to access credit. Another problem is like the grand national with the chair in front of the horse. There are many hurdles in terms of meeting regulatory requirements.

I am all for standards and regulation, but they must be done in the right way. They must not burden businesses, but rather ensure there is a level playing pitch and standards. Businesses should be encouraged and allowed to flourish, but when we introduce legislation we have an innate ability to penalise small and medium-sized businesses. With wild abandon, our banks can do what they like without regulation. We need to have some rebalancing.

Small and medium-sized businesses are under major pressure and strain and are facing the loss of business and the possibility of houses being taken away because of personal guarantees when businesses go wrong. When they see the situation regarding Siteserv, it sends out a very distasteful message. That a company can get a write-off of €100 million that the taxpayer must fund and that shareholders in the company can receive €5 million to accept the sale of the company beggars belief. It is the same as someone who owes €1 million when his or her small business goes belly up. Would he or she expect the State to take €600,000, the people who sold the company to get €400,000 and to walk away with €50,000 in his or her back pocket? What are we trying to say to people? Is there one rule for an invisible group?

Some people are under threat of their homes being taken from them by the same banks that have run roughshod over regulation. The continual view that there is a group out there which, because it is large enough, can get a significant debt write-down wears people down. We are flogging people through courts in order to take houses from them because their businesses went wrong. It is wrong and must be addressed.

This motion was tabled for the right reasons, namely, to highlight some of the difficulties and inequities in our taxation and social welfare systems. We are raising these issues because we support small business as much as the Government does.

I welcome the opportunity to speak and compliment Deputy Calleary on tabling this timely motion. I want to deal with a number of issues. I refer to the self-employed and the difficulties they experience if they run into trouble and have to look for social welfare. An innovative idea was introduced in 1988 by the then Fianna Fáil Government, that is, PRSI for the self-employed. At that time, the idea was vilified by many people, including some of the parties opposite and some of the representative groups of industry, but it has stood the test of time and was a major achievement.

In the United Kingdom, a decision was made by the courts on PRSI for the self-employed. I understand the Attorney General and the Department of Social Protection examined a report that was written some two and a half years ago. I spoke about it during a debate on the budget in December 2012. At the time the Minister's office said it would come back to me as to what decision was made. I can say that no decision has been made. I ask the Minister of State to try to find out from his Government colleagues the status of the report and what they intend to do about the self-employed.

We need to address a significant issue, namely, the ability of people to access social welfare when they run into difficulties. If we are serious about it, we have to consider small and medium industries all over the country. I have a number of issues in my constituency. The decision to cut Leader funding was disastrous. The Leader companies in my area and throughout the country have played a major part in helping people to start businesses. They have provided them with resources, facilities and encouragement to get into business. The enterprise fund that was established through that has played a significant part in getting people into industry.

At this stage the Government must re-examine this issue. It has done a great disservice to rural areas.

Let us consider the broadband issue, about which my colleague Deputy Kelleher spoke. It is one of the greatest jokes of all time. In the 1950s, when we had not two pennies to rub together, we were able to bring electricity to every community in the country. In the 1970s and early 1980s, the then Minister, Mr. Albert Reynolds, did a significant job to ensure telecommunications services were provided and telephones were installed. We must take broadband as seriously. The only solution is a fibre cable, and it must be brought to every single community in the country. It is no longer acceptable to have broadband in the provincial town or market town when there is not even mobile telephone coverage or broadband in the village nearby. Farmers, agricultural contractors, building contractors and others who have businesses in the areas affected must have broadband of good quality. It is to our detriment and shame that we do not have a proper broadband service in their communities.

I have examined all the possibilities for broadband. Technology has moved on apace. Over recent years, everybody has been saying there is wireless capability, 3G and 4G, but the reality is that the State must bring a fibre cable to each and every community. I welcome the joint initiative between Vodafone and the ESB, but they will only come to some of the 50 towns that already have very decent broadband. What is occurring is appalling.

A number of other issues arise. Many people talk about credit for SMEs. I am aghast that the Members opposite say we have some cheek to bring this issue before the House because the problem is affecting constituents throughout the country, be it in Dublin, Cork, the most rural areas or the most urban areas.

There are a number of areas that we must examine. I have had much correspondence on this. In some villages in my area, including Churchtown in north Cork, Boherbue, Newmarket and Macroom, nursing homes have been set up. Such homes, which have been built around the country, are providing very valuable employment in their communities and a service to the State by providing excellent care to the elderly. Many of the operators have spoken to me about the cost of compliance and the costs associated with trying to keep the businesses going.

Community crèches were built in the good times. I was involved with many of the projects around the country and am delighted to have played my part in ensuring the availability of funding but I realise a major issue arises regarding rates and their application. We discussed a Bill recently on rates. Deputy Fleming tried very hard to abolish rates for community crèches because they are providing care for young people. This must be considered. The crèches are run on a shoestring, as I know from having met many of the managers and operators, but they are run as businesses. These businesses are providing part-time and full-time employment, as are the nursing homes and other organisations. They must all be examined in terms of what they are contributing to society.

The first line we hear from some of the successful food businesses is that it is as if we bring in regulation from Europe and gold-plate it in the Department before applying it in the communities and to individuals. An issue arises in regard to the overzealous way in which some officials in the HSE seek compliance with the regulations. I refer to health and safety regulations, in the first instance, but also to food regulations. Anybody preparing and selling food in the food industry understands the necessity of having proper hygiene records and so forth. They would not be in business unless they had an absolute understanding of this but the overzealous regulation incurs a cost. Some small businesses talk about spending thousands of euro to comply with regulations.

A farm is a small to medium-sized industry. Farms are employing people, directly and indirectly, and employees include agricultural contractors. Farmers' outlay on machinery and so forth and the headaches they must endure trying to keep their businesses going must be acknowledged. Farms must be acknowledged as businesses.

At a public meeting in Wexford last week, people were talking about the need for a one-stop shop. A plethora of agencies exists for setting up and mentoring businesses and for organising. There should be a one-stop shop or single State apparatus to offer advice to businesses on what to do and what not to do. The cost of credit and unavailability of credit for SMEs comprise an issue. The SMEs are crying out for credit.

Where is the report on the self-employed that was on the Minister's desk some two and a half years ago? It was produced following on from what happened in the United Kingdom. Has anything been done about the report or has it been kicked to touch? The broadband issue is as serious within miles of the city as it is within hundreds of miles of the city. It is not acceptable. A fibre-optic cable must be brought to each and every community. The Government has dismantled the Leader funding, which was playing a massive part in rural areas. When I chaired a regulatory committee, we examined the effect of a reduction in regulations for SMEs and we saw what other countries were doing to reduce the red tape and bureaucracy. The red tape and bureaucracy are completely insane. Every single reform that occurs implies more bureaucracy, red tape, oversight and pen pushing.

We must address the issues of the self-employed, broadband, Leader funding and red tape. I could go on for hours.

I welcome the opportunity to contribute to this debate. I acknowledge the huge contribution the SME sector is making to the Irish economy, from the 350,000 self-employed to the 580,000 who are employed in enterprises with 50 staff or fewer. Like everyone in recent years, these people have gone through what was possibly the worst global recession ever. They have survived, but not without a great sacrifice, and have received little or no support from the State. Those who have not survived or have been unfortunate enough to fail, and those who continue to fail, have little by way of comfort or support from the State. They are ineligible for certain welfare payments and benefits. They are allowed certain allowances but the means test is so rigorous that they often feel like beggars coming out of the social welfare office after seeking some support. There is certainly no sweetheart deal available for people who fail, such as the deals that seem to be available to companies such as Siteserv. When one considers what the Government has done to support SMEs in recent years, one realises that it has doubled the rate of employer's PRSI, absolutely ransacked employers' pensions and slashed the redundancy payment. That is the level of support that is given by the Government to the sector.

I take this opportunity to credit Deputy Willie Penrose. The Minister of State will remember that we conversed about the Deputy’s legislation on Twitter one night.

He was right to bring forward the Bill to reduce the bankruptcy term to support entrepreneurs, innovators, risk takers and job creators because very often they are the people we need to start again. They have the expertise and imagination needed to start again. I call on Fine Gael to stop playing party politics and support the Deputy's Bill because it will find support throughout the membership of the House.

The motion rightly calls for reform of the social welfare sector. It is very important that we reform the sector for the self-employed because it will help foster an entrepreneurial attitude. It will tell people to try but that if they fail they will be supported.

I want to turn my attention to Revenue. Not one of us would condone deliberate tax evasion, but the manner in which Revenue officials carry out audits is nothing short of a scandal. The number of small businesses which have been targeted and the level of interrogation and examination is nothing short of scandalous. I met someone who employs 12 people in Mullingar. He used to employ in excess of 30 people but because of the recession he downsized. The officials practically lived with the business for four weeks, and the level of anxiety and stress was absolutely harrowing. In the heel of the hunt before they left all they could ask was how the person was able to keep the business going. The State should be complimenting and congratulating, not condemning, businesses which kept the ship afloat for the past number of years. The self-employed people who inadvertently miscalculated their liabilities are charged absolutely penal interest rates and penalties and this needs to be addressed.

My colleague spoke about broadband and I want to add my voice to this. The Mr. Crumb factory in north Westmeath employs more than 100 people. Very often the owner must get into his car and travel from Castletown, Finea to the Mullingar Park Hotel to send and receive orders. Where is the Government support for a business such as this? Last Sunday night I was at a cumman meeting in Abbeyshrule, County Longford, which has an airport and a very successful business and bar restaurant. It won the all-Ireland tidy towns competition, and the new Central Park development will be a small distance from it. However, there is no broadband good, bad or indifferent. This is a scandalous legacy for the Government. It could find €500 million from the National Pension Reserve Fund to roll out water meters which will not be used or read for a minimum of four or five years but it does not have the will, money or commitment to ensure that in this day and age we have broadband, which is a crucial service for businesses and citizens. This is a very bad legacy.

Small and medium-sized enterprises will continue to be critical to our economic recovery and the Government will continue to support them, whether through start up or scaling phases. SMEs will continue to provide vital jobs and goods and services in our communities and regions, and consequently it is in all of our interests that SMEs are born, survive and thrive. I take the point made on the failure of SMEs and the point made by Deputy Kelleher on venture capital and taking equity stakes. The metrics will show clearly the Government has a very strong record, as does the venture capital community, in taking punts on many SMEs, particularly at present.

People talk about a paradigm shift but a new dialogue has opened up about the notion of fear of failure. We all subscribe to the idea one can fail quickly and move on and start something new. This applies mainly in the tech sector. In other sectors of the economy one must be a little more reticent and careful about the rhetoric we use, because sometimes the failure of an entity involves many creditors and we must have mechanisms in place so people can find relief with regard to debts incurred by a company. We do not want to have a system which is too loose so people could turn over entities too easily whereby many people are left hanging for want of the expedition of the debt which would arise from such activities. I take the point, which is valid, but we need to be careful about how we evolve such a culture in this country.

We have to state for the record that as strong as the foreign direct investment base is in this country, more jobs are supported by Enterprise Ireland and local enterprise offices than in IDA companies. By the end of 2014 Enterprise Ireland and the local enterprise offices supported 180,072 jobs and 31,326 jobs in client companies respectively, while total employment in IDA client companies stood at approximately 174,500. The Minister of State, Deputy English, indicated yesterday that our aim is to create 100,000 new jobs by 2016 and we think this is a realistic proposition. We are well on our way, with an extra 90,000 jobs having been created in net terms since the Action Plan for Jobs was launched in 2012. We are well on our way to reaching the 100,000 extra jobs during this year, a full 18 months ahead of schedule.

We facilitate formal mechanisms for structured ongoing engagement with SMEs through the advisory group on small business, the high level group on better regulation and the retail forum. These formal mechanisms can and do feed into the Action Plan for Jobs and the budget processes, ensuring facilitated structured and regular dialogue between the Government and representatives of the very sector about which we are speaking, which is the small business sector, on any issue of concern and on how to promote the economic development and job potential of the sector.

It must be said that raising awareness among SMEs and entrepreneurs of the range of State-funded supports available remains an ongoing challenge for the public policy system. One of the issues which causes small businesses the most headaches is the lack of clarity about what they are supposed to do, to whom they need to speak and from where to get the right information. This is why the Department of Jobs, Enterprise and Innovation launched actionplanforjobs.ie and has partnered with a number of industry ambassadors to create awareness of the supports available. This is part of a wider effort. Another example is the Government's Taking Care of Business events, which also demonstrate our commitment to ensuring SMEs have easy access to the information they require to run a business as efficiently and effectively as possible. We also have the 31 local enterprise offices, LEOs, which form a first stop shop approach for business in each community and this will continue to develop relationships. If we look at the metrics from last week we clearly see jobs growth from the activities of the LEOs.

It is four years since we took office and our economy grew by 4.8% last year. It is the fastest-growing economy in the European Union. When we started the Action Plan for Jobs the unemployment rate was at 15.1%. It has fallen to 10% and it will fall below 10% very shortly.

I thank my colleague, Deputy Dara Calleary, for tabling this motion on one of most important areas in Irish society, self-employed people and small and medium-sized enterprises, SMEs. We recognise there are approximately 350,000 self-employed people in Ireland, a figure that is generally ignored. Protestations about how badly they are being treated by the Government have been falling on deaf ears. There are approximately 600,000 people working in SMEs, namely, enterprises with up to 50 employees. Many local shops and supermarkets have higher numbers but we refer to them as relatively small businesses. We must put this into context. Up to 200,000 people are working in foreign direct investment companies but the contribution of SMEs and the self-employed is far greater.

The motion highlights the disparity in tax treatment between the self-employed and the PAYE sector. We have come through a difficult time and social welfare benefits, including jobseeker's benefit and illness benefit, are not available to self-employed people if a business goes bust. More often than not, these people employed a number of people who are able to receive benefits, whereas the self-employed person is not able to avail of them. The motion calls for the introduction of an earned income tax credit for self-employed people on a phased basis. If returned to government, we will do it over a two-year period. This will be equal to the value of the PAYE tax credit of €650. The anomaly has been there for a number of years and needs to be addressed. We have also called for the provision, on a voluntary rather than on a compulsory basis, of a range of social protection payments, including jobseeker's benefit and illness benefit for self-employed PRSI contributors, as part of a commitment to fostering an entrepreneurial culture as well as enhancing social solidarity. It is very important that we set out to achieve that.

It is also important to recognise that when businesses at local level are involved in local activities, they source the majority of their materials and services locally and this has a tremendous multiplier effect in terms of money circulating throughout the local economy. This is much more the case than with foreign direct investment enterprises, welcome as they are. There are more people working in small local industries, including in retail and other sectors. The key problem facing self-employed people who are now unemployed is that they are entitled to only a limited range of social welfare payments. To be eligible for jobseeker's assistance, a self-employed person must undergo a phenomenal means test. If the person had any assets built up in the business or tried to provide for the future by acquiring a property, such as a second house or a rented house, he or she will not be eligible for social welfare payments or social assistance payments because he or she will not have built up eligibility since he or she was not allowed to contribute. The motion refers to the voluntary introduction of such a code. If people apply for such payments, there is a tremendous waiting list. People in the self-employed category include farmers, professional people, certain company directors, people who run their own businesses and sub-contractors. I will address the latter before I conclude.

When we recover economically, and not just within the M50 but in the rest of Ireland, the SME sector will have a significant part to play in the recovery. It is important to have a safety net and to be able to claim some social welfare payment on the basis of having contributed to it. People are not asking for something for nothing. They want to pay and want legislation to allow them to contribute. In the interest of social justice, it is important that the facilities are provided.

In the USA, self-employed and employed people pay social security tax, which is something we should consider. The motion refers to extending, on a phased and voluntary basis, the full range of social welfare payments, including jobseeker's benefit and illness benefit to self-employed people. Self-employed people should be able to opt into the existing class A PRSI structure, paying the rate corresponding to their income level. This will contribute to making class S payments. This additional voluntary payment will equate to approximately 4% for self-employed people with income over €356 a week. They are not looking for something for nothing and they want to make a contribution and to get the benefit of the contribution if the rainy day comes along. If the rainy day does not come along, everyone is a winner, including the economy because we will not have to pay out and small businesses will probably be going from strength to strength. As part of the programme of extending the benefits, we propose a limited recognition be given to class S payments made to date by self-employed people, which gives them very little benefit. This can be done by working out the balance of what they have paid and by working it into the payments they will make in the future.

I congratulate my colleague, Senator Darragh O'Brien, who introduced legislation in the Seanad on behalf of Fianna Fáil, entitled the Public Services and Procurement (Social Value) Bill 2015. I hope it will get full support from the Government and that it will be passed. This Bill requires all public bodies to have regard to economic, social and environmental well-being in connection with public service contracts and to provide for related matters. The Minister of State will be interested in the following area. We want a community benefit requirement in all of the major construction and other contracts given out by public bodies. This relates specifically to training and recruitment and the issue of apprenticeships. The Minister of State visited the ESB training centre in Portlaoise in my constituency and spoke about the importance of apprenticeships. The chief executive of the ESB is chairing a committee on this but we are light years away from where we should be in terms of the number of apprenticeships. It should be a requirement that this be taken into account when public sector contracts are being given out. The opportunity for sub-contractors to avail of this work should also be taken into account as well as the value to the local economy. It is not just a question of the lowest price, even though we want to drive down prices and get the best value for money for the taxpayer. Other factors arise that should be taken into account.

Senator Darragh O'Brien said that unlike many other EU countries, Ireland focuses solely on the lowest price in many situations. Most other EU countries have a mechanism in place, so it is not anti-EU. Every time we want to do something, we think the EU will not allow it. The EU allows many things but we have decided not to do them. Most EU countries have introduced social clauses to allow the state to choose offers.

We have done it.

We can do it and there have been pilot schemes in a couple of areas. The worry is that the contracts will be completed in a year's time, there will be a review of how it has worked out and in four years' time, a mechanism will be put in place. That is how the public service works. I would be happier if there were a contractor on site from a company that monitors projects as they progress. We would be able to say, before contracts have been completed, that we have examined ten major contracts and that this is working, or just needs to be refined. We would not have to wait until the pilot schemes are over, or until we commission a body to carry out a survey and produce a report. We are agreed on this but we have only just dipped our toes in the water. We must take a full dip and do the full job. It is important we do that.

I am blue in the face talking about the Construction Contracts Act, which was passed over two years ago but has not yet commenced. It moved from the Department of Public Expenditure and Reform to the Department of Jobs, Enterprise and Innovation. The Minister of State, Deputy Gerald Nash, is dealing with it but people cannot agree on who will be the chairman or the arbitrator. It is a way of long-fingering it. Senator Feargal Quinn introduced the Bill in 2011 and it worked its way through the Houses. On budget day two years ago, I asked the Taoiseach when it would be commenced and I did so again last year on budget day and two weeks ago on the Order of Business. The Minister for Jobs, Enterprise and Innovation sent me a letter stating that it is still being worked on and that there is no timescale. The Government needs to get the finger out to protect sub-contractors.

The Government could act immediately in regard to commercial rates. Mechanisms can be put in place by local authorities to encourage commercial development in town centres, which need a boost. The issue of broadband and mobile phone signals needs to be addressed. We can talk about broadband all we like but the village in which I live does not even have an adequate mobile phone signal because the Commission for Communications Regulation is not doing its job and ensuring providers provide a proper service.

Not only do we need a social clause in some of these public contracts, but we need to change the tendering system so that SMEs can be included on the list. If they have not had a significant turnover in previous years, they will not even be eligible to tender for the job.

That must be required, especially for businesses that have a track record but which may not have had cash flow or a high turnover in the past couple of years. Those would be concrete steps to help SMEs.

I thank my colleagues from all sides of the House who have spoken since yesterday evening on this topic. The intention was to place SMEs, which give 350,000 people an income in this country on a daily basis, at the centre of the political debate. We have succeeded to some degree in that regard, given the media coverage and discussion on this topic.

The intention of the motion was to lay down some very specific requirements. Rather than going for a scattergun motion and throwing everything in with it, we laid down very specific requests, such as the introduction of an earned income tax credit, the provision of PRSI and social protection payments, an information campaign from the Department of Social Protection to highlight the services and benefits available to self-employed people, an expansion of the role of the Strategic Banking Corporation of Ireland, changes in capital gains tax and an extension to the credit guarantee scheme. While all those things were mentioned approvingly by various Government speakers, what we will actually be voting on is, as I described it last night, the Labrador puppy of Government amendments. Everybody loves it. Everybody will pat it on the head and tell it, "You're a great lad", but there is nothing specific there that we can hold the Government to account on in terms of addressing all the problems that have been raised by speakers on all sides of the House about SMEs. This is why we will vote on the Government amendment. There is nothing specific in terms of addressing an insolvency system that is not working and not delivering, and which will not work and will not deliver under the current scheme.

No mention was made over the two nights of why the Fine Gael Party is selling out the Labour Party again in respect of the bankruptcy term, why the Fine Gael Party is not bringing us in the Twenty-six Counties into line with Northern Ireland and England in terms of bankruptcy laws and why the Taoiseach continues to stick his head in the sand regarding the inadequacies of our insolvency network. We need an insolvency system that will deliver for all cohorts, but particularly for SMEs.

There is nothing specific regarding the credit guarantee scheme and why, after a review published in mid-2014, which highlighted its inadequacies, we are now moving rapidly towards mid-2015 and we are no further on in terms of changing the scheme and addressing those inadequacies. Meanwhile, businesses the length and breadth of the country that need access to that facility are having their loans sold out from under them by banks. They are being sold to foreign funds with no respect, no understanding and no thought for the selfless effort that has gone into building up those businesses and for the people who are working in those businesses. They need a reformed credit guarantee scheme, but it is not a priority. It is put on the long finger.

As I said when I opened this debate last night, this system does not understand how it is for someone to arrive into work on a Monday morning and not know if they will have money to pay their employees, never mind themselves. It does not understand what it is like for someone to go for weeks on end without receiving a cent until somebody pays them, and then they must pay Revenue, the Department of Social Protection, their suppliers and only then, if there is anything left, will the business owner get paid. Life as an SME owner is not, as people like to portray it, all champagne, yachts and big cars. It is very tough. A system that does not understand and whose every response demonstrates that lack of understanding needs to come on that journey and to understand how it is to go without being paid. Then we might see urgency around the credit guarantee scheme and the need for a new business bank. Instead of setting up and giving money to banks that have failed Irish business, and small businesses in particular, we need to set up a new business bank and take them on. The money is there to do it.

That is what these two nights have been about - injecting urgency into this system and into the Minister's Department about SMEs and not treating them like some little child to be patted on the back and told: "You're a great lad. Stay there in the corner, be quiet and don't embarrass us." SMEs are the lifeblood of this economy. They will get this country back on its feet. It is time we had a Government and a system that respected them. The amendment shows no respect and no understanding of the position SMEs are in at present and that is why we will oppose it.

Amendment put:
The Dáil divided: Tá, 66; Níl, 38.

  • Barry, Tom.
  • Burton, Joan.
  • Cannon, Ciarán.
  • Carey, Joe.
  • Coffey, Paudie.
  • Collins, Áine.
  • Conaghan, Michael.
  • Connaughton, Paul J.
  • Coonan, Noel.
  • Corcoran Kennedy, Marcella.
  • Costello, Joe.
  • Creed, Michael.
  • Daly, Jim.
  • Deering, Pat.
  • Doherty, Regina.
  • Dowds, Robert.
  • Durkan, Bernard J.
  • English, Damien.
  • Farrell, Alan.
  • Feighan, Frank.
  • Fitzgerald, Frances.
  • Fitzpatrick, Peter.
  • Griffin, Brendan.
  • Hannigan, Dominic.
  • Harrington, Noel.
  • Harris, Simon.
  • Hayes, Tom.
  • Howlin, Brendan.
  • Humphreys, Heather.
  • Humphreys, Kevin.
  • Keating, Derek.
  • Kehoe, Paul.
  • Kelly, Alan.
  • Kenny, Seán.
  • Kyne, Seán.
  • Lawlor, Anthony.
  • Lynch, Ciarán.
  • Lyons, John.
  • McCarthy, Michael.
  • McFadden, Gabrielle.
  • McGinley, Dinny.
  • McLoughlin, Tony.
  • McNamara, Michael.
  • Maloney, Eamonn.
  • Mitchell O'Connor, Mary.
  • Mulherin, Michelle.
  • Murphy, Eoghan.
  • Neville, Dan.
  • Nolan, Derek.
  • O'Donnell, Kieran.
  • O'Donovan, Patrick.
  • O'Dowd, Fergus.
  • O'Mahony, John.
  • O'Sullivan, Jan.
  • Perry, John.
  • Phelan, John Paul.
  • Reilly, James.
  • Ring, Michael.
  • Ryan, Brendan.
  • Sherlock, Sean.
  • Stagg, Emmet.
  • Stanton, David.
  • Tuffy, Joanna.
  • Varadkar, Leo.
  • Walsh, Brian.
  • White, Alex.

Níl

  • Adams, Gerry.
  • Boyd Barrett, Richard.
  • Broughan, Thomas P.
  • Calleary, Dara.
  • Collins, Joan.
  • Colreavy, Michael.
  • Crowe, Seán.
  • Daly, Clare.
  • Doherty, Pearse.
  • Ellis, Dessie.
  • Ferris, Martin.
  • Fitzmaurice, Michael.
  • Fleming, Sean.
  • Fleming, Tom.
  • Healy, Seamus.
  • Healy-Rae, Michael.
  • Kelleher, Billy.
  • Lowry, Michael.
  • Mac Lochlainn, Pádraig.
  • McDonald, Mary Lou.
  • McGrath, Finian.
  • McGrath, Michael.
  • McLellan, Sandra.
  • Martin, Micheál.
  • Mathews, Peter.
  • Moynihan, Michael.
  • Ó Caoláin, Caoimhghín.
  • Ó Cuív, Éamon.
  • Ó Snodaigh, Aengus.
  • O'Brien, Jonathan.
  • O'Sullivan, Maureen.
  • Pringle, Thomas.
  • Ross, Shane.
  • Shortall, Róisín.
  • Smith, Brendan.
  • Stanley, Brian.
  • Troy, Robert.
  • Wallace, Mick.
Tellers: Tá, Deputies Paul Kehoe and Emmet Stagg; Níl, Deputies Dara Calleary and Michael Moynihan.
Amendment declared carried.
Question put: "That the motion, as amended, be agreed to."
The Dáil divided: Tá, 66; Níl, 38.

  • Barry, Tom.
  • Burton, Joan.
  • Cannon, Ciarán.
  • Carey, Joe.
  • Coffey, Paudie.
  • Collins, Áine.
  • Conaghan, Michael.
  • Connaughton, Paul J.
  • Coonan, Noel.
  • Corcoran Kennedy, Marcella.
  • Costello, Joe.
  • Creed, Michael.
  • Daly, Jim.
  • Deering, Pat.
  • Doherty, Regina.
  • Dowds, Robert.
  • Durkan, Bernard J.
  • Farrell, Alan.
  • Feighan, Frank.
  • Fitzgerald, Frances.
  • Fitzpatrick, Peter.
  • Griffin, Brendan.
  • Hannigan, Dominic.
  • Harrington, Noel.
  • Harris, Simon.
  • Hayes, Tom.
  • Howlin, Brendan.
  • Humphreys, Heather.
  • Humphreys, Kevin.
  • Keating, Derek.
  • Kehoe, Paul.
  • Kelly, Alan.
  • Kenny, Seán.
  • Kyne, Seán.
  • Lawlor, Anthony.
  • Lynch, Ciarán.
  • Lyons, John.
  • McCarthy, Michael.
  • McFadden, Gabrielle.
  • McGinley, Dinny.
  • McLoughlin, Tony.
  • McNamara, Michael.
  • Maloney, Eamonn.
  • Mitchell O'Connor, Mary.
  • Mulherin, Michelle.
  • Murphy, Eoghan.
  • Neville, Dan.
  • Nolan, Derek.
  • O'Donnell, Kieran.
  • O'Donovan, Patrick.
  • O'Dowd, Fergus.
  • O'Mahony, John.
  • O'Sullivan, Jan.
  • Perry, John.
  • Phelan, John Paul.
  • Reilly, James.
  • Ring, Michael.
  • Ryan, Brendan.
  • Sherlock, Sean.
  • Stagg, Emmet.
  • Stanton, David.
  • Tuffy, Joanna.
  • Twomey, Liam.
  • Varadkar, Leo.
  • Walsh, Brian.
  • White, Alex.

Níl

  • Adams, Gerry.
  • Boyd Barrett, Richard.
  • Broughan, Thomas P.
  • Calleary, Dara.
  • Collins, Joan.
  • Colreavy, Michael.
  • Crowe, Seán.
  • Daly, Clare.
  • Doherty, Pearse.
  • Ellis, Dessie.
  • Ferris, Martin.
  • Fitzmaurice, Michael.
  • Fleming, Sean.
  • Fleming, Tom.
  • Healy, Seamus.
  • Healy-Rae, Michael.
  • Kelleher, Billy.
  • Lowry, Michael.
  • Mac Lochlainn, Pádraig.
  • McDonald, Mary Lou.
  • McGrath, Finian.
  • McGrath, Michael.
  • McLellan, Sandra.
  • Martin, Micheál.
  • Mathews, Peter.
  • Moynihan, Michael.
  • Ó Caoláin, Caoimhghín.
  • Ó Cuív, Éamon.
  • Ó Snodaigh, Aengus.
  • O'Brien, Jonathan.
  • O'Sullivan, Maureen.
  • Pringle, Thomas.
  • Ross, Shane.
  • Shortall, Róisín.
  • Smith, Brendan.
  • Stanley, Brian.
  • Troy, Robert.
  • Wallace, Mick.
Tellers: Tá, Deputies Paul Kehoe and Emmet Stagg; Níl, Deputies Dara Calleary and Michael Moynihan.
Question declared carried.
The Dáil adjourned at 9.25 p.m until 9.30 a.m. on Thursday, 23 April 2015.