Microenterprise Loan Fund (Amendment) Bill 2020: Second Stage (Resumed)

Question again proposed: “That the Bill now be read a Second Time."

I am grateful for the opportunity to make a few points about finance initiatives that are needed to support business. There has been much talk over the past number of months about the need to support small business in particular and the talk has been encouraging from all sides. We now have a Government in place. Indeed, it was remiss of me not to wish the Government well and wish the Minister of State, Deputy English, who is with us this morning, and all his colleagues well and Godspeed in their very difficult job in the months ahead.

I have concerns about the finance initiatives. Indeed, the Minister of State will have seen the various business organisations, in particular ISME, Chambers Ireland, IBEC and others, state that it encourages borrowing that is arguably extremely dangerous at this time. There is no question but that many businesses have been effectively wiped out and have their doors closed throughout this period. That has had an enormous impact on our society and economy and on employment and so on. However, when we say to people who are already on the rack that we are going to enable them to borrow, that is not a good precedent to set. The other aspect of this is that the way we underwrite these loans and the way the SBCI money in particular is distributed is through our existing bank base. As we learned to our expense and to much frustration across political parties and indeed society, the banks' focus is on the bottom line. They must be profitable.

We have moneys being made available to us at, I think, a minus percentage rate but by the time that gets to an SME farmer, shopkeeper, fisherman or carpenter, quite a number of percentage points have been added on, effectively to give profits to banks which are already profitable. It is sort of a three-card trick to say "live horse and you will get grass". We know businesses have been wiped out this year. In particular in the tourism and hospitality world, even if everything was opened up, consumer sentiment is not such that those businesses would be in a position to recoup the losses they have had or to make their business model work with lowered capacity and turnover levels and the reduction in profitability that is going result from that.

I would have much preferred Ireland, as a State, replicate the proven models that were introduced in the past, such as the Agricultural Credit Corporation, ACC, for funding agriculture and farming activity and the Industrial Credit Corporation, ICC, for funding industrial and commercial activity. Instead we have allowed the pillar banks to do this. As I said, the pillar banks, even when we had public interest directors on their boards, were in a position to serve only their shareholders whose only modus operandi, MO, is profitability. That is good for them but, as a State, it is wrong that we are facilitating that. What would have been much better is 20 to 25 good underwriters with a State institution lending to them. Instead we have this bureaucratic group of levels, through Microfinance Ireland, SBCI, the Department, the pillar banks and the underwriters. Eventually the punter gets to borrow money at 4% or 5%, which carries a very substantial premium over the amount we, as a country, are getting the money for. What we are doing is getting peace of mind politically by thinking we are facilitating and supporting small enterprise when the truth is that all this is really doing is enabling the better-heeled to get on while ensuring those who genuinely need support hit the wall. This is a big concern for me because we are encouraging people to strangle themselves with debt in what is already a desperate situation for most.

I represent the constituency of Sligo-North Leitrim. We are responsible for parts of south County Donegal and north County Roscommon. It is a part of the country where only two sectors really contribute in a major way to our society. That is not to take away from all the others, but obviously tourism and hospitality and agriculture are our two major pursuits. While wishing the Minister of State and all of our colleagues well and Godspeed in the months ahead, I hope their focus can be on that. It is a little bit disheartening that tourism, for example, is buried in a Department with other things. Many tourism operators have reached out and made contact with, I am sure, all Members in constituencies where it is a vital component of economic activity to protest that no measures have come forward, other than to strangle themselves with debt while we make the banks more profitable. Other than that they are on their own. Through media briefings it is becoming evident from officials, politicians, Ministers or whoever that some businesses may not survive, so in many ways we are throwing in the towel already.

If one looks at the measures introduced to support business in France, on commercial rents it has what I think is called the 40:40:20 scheme where the state picked up around 40% of the commercial rent.

The landlord would take a 20% reduction and the tenant would pay 40%. We did not nothing like that. Many people are already strangled by having to pay commercial rents to landlords with mortgage commitments and they have found themselves in a position where they just cannot afford to reopen. The business models of cafés, restaurants, bars and hotels operated based on 60% to 80% occupancy and they are now operating at 25% with social distancing rules and so on. We use terminology such as "helicopter money" or "direct financing" and the €1 trillion in loans and direct grants announced at a higher level in Brussels was welcome, but we are not seeing that in the direct grants here. People can borrow and we are adding a number of percentage points for handling fees or whatever we are calling them in order to be profitable, but the reality is we are not getting the hard cash to the people who need it to help them survive this. That is what is needed.

Covid is probably going to be around for many years and a loan is not going to cut it. We are going to have to directly finance and support businesses. While I will obviously not be voting against the legislation, if this is the whole picture we are going nowhere. It is designed to facilitate the better heeled to borrow and expand but the average Joe SME does not have a prayer of getting this kind of money. In order to get the Brexit loan, which is more or less what the Covid one was based on, the Strategic Banking Corporation of Ireland, SBCI, was asked to define a business plan that was visionary and reinvented the wheel, for want of a better expression. That is just not acceptable because before Covid all or many of these businesses were profitable and were in a position to make money. More importantly, they were in a position to create employment. We had high employment numbers and while many of us would like to see those people being paid more, they were nevertheless employed. I appreciate that this is part of a picture. However, I would much prefer if the State moved back to the ACC Bank and ICC Bank model where we had direct control, were not looking at profitability and were supporting the sectors and industries that required it. This is a start but it is not remotely the sort of start I would have hoped for. I hope we start stripping out all the bureaucracy, the handling fees and the need to make our pillar banks more profitable than they already are and get with the programme. We need to simplify this and ask how to get money to the people who need it fast, in order to that they can generate economic activity and create jobs. Please God, there might be a little bit of profitability for those people in due course, although that is not a word many businesses will be able to countenance in the year or two ahead.

While this is not directly related to microfinance, it relates to having the financial resources to support businesses in other ways. The Dáil sitting here in the Convention Centre is an abject waste of taxpayers' money. In Leinster House, each of us has our self-incubation unit with a monitor in front of us to watch proceedings and with some will and just a pinch of imagination, we could have a fully functional Oireachtas on the campus where it was intended to be rather than needlessly wasting €25,000 a day down here. We have all the facilities required and if we just employed that pinch of imagination, we could all be back up on Kildare Street doing our work as people expect.

I will raise a number of points. Everybody is supporting this legislation and it is vital to ensure microenterprises can continue to work, or to put in place the resources for them to continue to work in the current climate. However, we need to consider why we have arrived at this position. Due to the length of time it has taken to form a Government, legislation could not be passed during that period. While it may be unusual that the coronavirus and the general election clashed together to make this happen, as a body politic we have to look at how our Constitution impacts on this matter as well. The Constitution was written at a time when we had two and a half parties in the State. In 1937, it was envisaged that Fianna Fáil and Fine Gael would interchange, with one out of power and one in power and that party would go straight into government. The reality is that does not happen any more and that is the case right across Europe. It is not unique to Ireland or anywhere else. Time will be taken after all elections for negotiations to take place and parties to come together to form a Government. We have to recognise that. I call on the Government to look at this issue and the constitutional requirements involved. We will probably have to have a referendum, so that will need to be looked at. We do not want to have the same problem after the next general election where urgent legislation may be required but we have to wait until the formation of a Government. A way can be found to ensure talks on the formation of a Government can take place and that government can function in the interim period. That needs to be considered and I ask the Government to look at that because it is vitally important.

The Microenterprise Loan Fund (Amendment) Bill 2020 is obviously very welcome. I have listened to the contributions over the last few days about the interest rates charged on the loans that have been granted and it sticks in one's craw to see interest rates of 5.5% or 6.5% being charged when normal interest rates are around 0.5% or 1%. That is a barrier. I would like to see information about how big a barrier it is because I imagine if I was in business and was going down the tubes, if I could get money at 5.5% I might take it to keep myself going. One might not decide to do that but it is definitely something one would have to consider. There may be many other issues around why there is such a poor uptake of this loan. Based on the Microfinance Ireland website, at first glance it appears to be successful. So far, 3,169 loans have been approved which are protecting 8,020 jobs. That is very welcome. However, there are 249,000 microenterprises in this State, which have all been affected by the Covid crisis and one would imagine that the demand, intensity and need for finance to keep going would increase. While I know there has been a lacuna period during which loans could not be granted, the number of loans received from Microfinance Ireland represents 0.012% of microenterprises in the country. That is extremely low and I wonder if this Bill had been passed and the money had been in place in time, whether that figure would be significantly higher. We should be expecting 15% to 25% of businesses to be applying for and getting loans.

The loans also need to be looked at further because of the amount of information required, the work that has to be done and the cost involved in getting the loan and providing all the paperwork that is needed. That must be looked at and addressed. I would like to see a report on what the barriers are for businesses in attracting loans.

I believe that small or microenterprises are the key to all of our constituencies throughout the country. There is a huge amount of employment among them. A huge number of people working in microenterprises struggle at the best of times and probably need this support.

I will support the legislation but it needs to be looked at and evaluated over time with regard to what the actual barriers are. The interest rate is probably one of the barriers and perhaps the publicity it has received has prevented people from looking to access the funding but there are an awful lot more barriers in place. Many small businesses do not have the level of paperwork required to consider the loan. There is also an item with regard to de minimis aid and whether an enterprise has received previous supports. I do not know what impact this has on the ability of Microfinance Ireland to lend to a small business but perhaps it is a barrier that prevents businesses from going further with an application. All of this needs to be looked at. The number of businesses applying to the fund needs to be increased significantly for it to have a genuine impact.

As an aside, I was looking at the criteria for qualifying for the loan and it is interesting to see that illegal economic activities are barred. I wonder why this even had to be included among the criteria. It is good that they are barred but I wonder why it has to be there.

I would not want to have vertigo up here; there is a pretty steep fall. I wish the Minister of State, Deputy English, the best of luck in his new role. I know he relishes a challenge and I sincerely wish him the very best of luck and I look forward to working with him. I had expected the Tánaiste to be here. The first time I met the Tánaiste was in Kinsale prior to the election and I photobombed him for the purposes of getting a bit of publicity. It seems to have worked. We were standing in Kinsale, which is part of my constituency, and it was clear to see what a vibrant town it is. The success of Kinsale and other such towns is built on small, medium and micro enterprises, such as cafes, restaurants, beautiful bookshops and boutiques. Directly across the road from where we stood my first cousin has a flower shop. All of these small businesses are the heartbeat and backbone of what makes a town such as Kinsale work.

I am not sure whether the Minister of State, Deputy English, has visited that neck of the woods but these are exactly the type of businesses, towns and streets that we are looking to protect. When Covid is done and dusted and when we are finished, we need to be able to go back to towns such as Kinsale and ensure the doors of these businesses are still open. The microenterprise fund will play a vital role in this if we structure and administer it properly. The same could be said for towns such as Bantry, Bandon, Skibbereen, Dunmanway, Schull, Castletownbere and my hometown of Clonakilty.

Recently, I opened my constituency office on Ashe Street in Clonakilty, which is a gem of a street. It is not only picturesque but the businesses there are very innovative and creative. There are all different types of businesses. When I set up my office the first knocks on my door were not from constituents looking for issues to be addressed but the other neighbouring businesses and local businesses welcoming me to the street with open arms. This demonstrates the tight knit network of businesses in our towns and regional areas, including clothes shops, boutiques and other retail, and how they all look out for and support each other.

One of the specific remits of the Minister of State will be retail. These are the types of businesses we need to look after. We are all shouting about hospitality, restaurants and cafes, and we need to do so, but retail also plays an important role. They are all looking out for each other. Unfortunately, within a few weeks of setting up my office we had one of the first casualties of Covid as one of the businesses on the street shut its stores for the last time. The entire community on Ashe Street was heartbroken. The people were devastated because they had become very close and they had seen one of their friends close down. We can sense the worry and concern among the business owners on Ashe Street. They will bounce back and I am absolutely sure that somebody else will move into that premises but we need to do everything within our power to allay their concerns and make sure that these clothes shops, fashion shops, boutiques, cafes and restaurants can keep their doors open and are still there when we get a vaccine and can return to some type of normality. I am trying to demonstrate the importance of these microenterprises that employ fewer than ten people and I know the Minister of State is familiar with it. There are the backbone of our communities, towns and streets.

It is important that I take this time and opportunity to mention hospitality. Towns such as Kinsale and Clonakilty would not have retail industries if it was not for footfall. This is where we need to come in strongly with the July stimulus. The VAT rate has to be reduced. There have been repeated calls for this and I want to reiterate them.

The wage subsidy scheme has been an absolute lifesaver for these industries. I am speaking in particular about hotels. Perhaps they do not fit into the microenterprise category but it is important that we speak about how important the wage subsidy scheme has been for them to keep going. I was speaking to a hotelier this morning and they simply would not have their doors open if it was not for the wage subsidy scheme. We need to extend it and we need to prepare, unfortunately, for the potential of a second wave so that we do not leave businesses high and dry. We must be prepared and be in a position to extend the wage subsidy scheme if there is a second wave.

Bigger industries will have to apply for the working capital loan. As is the case with the microenterprise fund, there is great difficulty and businesses are finding it hard to stomach and swallow the fact they are dealing with 4% or 5% interest rates when they know that in Europe and internationally we are looking at zero or negative interest loans. We need to pass on the zero interest rate of which we are able to avail to the small and medium enterprises. I would like to ask the Minister of State whether there is any way the interest rates can be examined in terms of how the microenterprise loan is administered.

There is not just tourism in west Cork and we also have vital farming and fishing industries. They need to be facilitated through the microenterprise loan fund because there is an opportunity for them to obtain some relief. They are facing similar difficulties.

I also want to mention briefly the event sector because I hope to get an opportunity to contribute to tomorrow's debate on this. We all love going to gigs and I am sure that in the room where we are standing there have been some incredible and exhilarating gigs and events and we have all been to gigs just up the road in the 3Arena. It is not exclusive to Dublin. Where I am from in west Cork is the second rock and roll capital of Ireland. We have amazing venues such as DeBarra's music venue and Levis' Bar in the small village of Ballydehob, which has hosted some of the biggest names in the world. These venues are all incredibly nervous and on edge. They are not sure what the future holds.

They have contacted many of us with a list of their wishes. I will take the opportunity to read these out in order that we can take note of them because they fit into the microenterprise bracket of employers of fewer than ten people.

They are looking for the Covid payment and wage subsidy scheme to continue for events and arts workers - that is very important - at least until mass gatherings can reconvene, which may be some way off, if we are to be honest. They are looking for business grant support of 20% of the 2018 turnover for SMEs and events and arts sector workers. They are looking for bank loan and lease payment holidays to continue. They are looking for their insurance policies to be re-evaluated. That is very important because, obviously, with events not going ahead the risks are much lower, so that needs to be re-evaluated. Rent assistance and funding of an industry assistance programme to cater for mental health and well-being are incredibly important. Since this pandemic the arts community has really come together to look after one another's mental health, but there needs to be a properly funded programme for that. Reduction of the VAT rate needs to be seriously considered for arts and events workers. They refer to a break on commercial rates, and the recipients of the Covid payment to be eligible for other welfare supports, such as rent allowance.

This is the first time in history, to my knowledge, that the arts and events industry has been through this, so we need to be there for those in the industry until mass gatherings can recommence. I will elaborate on this again tomorrow.

Every avenue over-66s look down, every corner they turn around, they face brick walls. They have been excluded from the PUP and cannot apply for the restart grant if they are not ratepayers. Bed and breakfast owners are a good example of this. They are excluded from the enterprise grant because the €1,000 grant is available only to those coming off the PUP, but they could never avail of the PUP. Furthermore, they may not necessarily apply for loans such as this, so we need to make them eligible for the restart grant.

I was talking to a local LEO company recently. Microfinance Ireland has been in touch to say the money has gone. That re-enforces the importance of passing this legislation. Microfinance Ireland is telling the LEOs to stop sending businesses to it until more funding comes. The interest rate, as I have already said, needs to be looked at. Finally, there is approximately a 60% or 70% approval rating, from what I can gather. Is there a way we can increase that approval rating?

I thank the Minister of State for listening.

This is a straightforward Bill. We are talking about cash flow and working capital for businesses. We all welcome this legislation and see its necessity. We all come from places that are absolutely reliant on SMEs and microenterprises. These are the people we know in the community who provide employment to other people in the community. I do not need to go into the domestic and global hit that businesses and we as a society have taken. We need to ensure we can come out of this, and the only way we can do so is by supporting those businesses that were viable before the pandemic. Some people and businesses were dealing with difficulties beforehand. As some other Deputies have stated, a solution will never be found in a banking sector that is utterly reliant on profit. That is fair enough from a business point of view, but the sector is not able or willing to do what we need it to do at this point.

We have had difficulties with the restart grant. A number of people could not qualify on the basis that they have not paid rates. A significant number of people found the grant was not sufficient to get them back up and running because it was based on the rates they had paid. While we have had some solutions for people who are self-employed, there are still difficulties. It is straightforward: the money is just not enough for the businesses to wash their faces.

Sinn Féin has tabled an amendment to this legislation to deal with microfinance loans but, really, the power lies with the Minister of State, Deputy English, the Tánaiste and the Government. It comes down to the fact that it is about interest rates. Many have already mentioned this. We are talking about people sometimes having to pay interest rates of 4.5% or 5.5% or sometimes higher. People at times have to go to loan sharks and are charged extortionate rates. The fact is that if people need to get money to keep their businesses going, they will be willing to do that, but it is not the support they need. We definitely need to look at grant aid for specific businesses. If we can draw down loans from Europe at a negative interest rate, and if we are now looking at the possibility of a Europe-wide recovery and fiscal stimulus, we need to ensure we can get adequate and fair access to such moneys and provide them to businesses as they need. Some of that will be grant aid. Many businesses will not be able to reopen. They are caught in certain situations. I think other Deputies mentioned the fact that we have people in the arts sector looking at no possibility they will be able to operate major gigs or anything like that in the near future, so we will have to have bespoke solutions.

The big thing is that we need to ensure we are able to give people interest rates as close as possible to 0%. We need to ensure that the risk assessment is streamlined, particularly when we are talking about businesses that were viable beforehand, so we can foresee that these businesses will be viable into the future. We have to protect them now. It will be a lot more costly if we let these businesses go to the wall, if we do not introduce a stimulus and if we do not catch them before they fall. It will cost a hell of a lot more to create new jobs and put new businesses in place. If we do not pay to keep these businesses open, we will pay through social protection payments and other costs. That is before we even talk about the societal damage that letting them fail may cause.

I spoke last night to a woman who spoke about making an application. In fairness, I think people will only commend the local enterprise offices and the work they have done. She said, however, that while the repurposed Brexit loans were welcome, when she tried to apply she found that the payback mechanisms and interest rates were a lot worse than when she just went and found her own credit through banks, which is far from perfect. A huge amount of her cost is from a small hairdressing business. In fairness to her, she carried out works on it from the point of view of being able to operate best practice as regards physical distancing. This was combined with the added cost she has of ensuring that everybody is healthy and maintains cleanliness, which is absolutely necessary for infection control. Such people really need to be helped out.

Throughout this island, this State, we have towns such as Dundalk and Drogheda that need this kind of support. If we do not have it, a huge number of people will hit the wall, and the impact that that will have on all of us will be spectacular, so we need to stop it before it starts. We need to streamline the risk assessment and ensure for loans such as this that we can give people interest rates of as close to 0% as is possible. I am leaving this with the Minister of State, Deputy English, and the Tánaiste. They have the power to bring this to Cabinet. We need to ensure it happens. This is the reason more people have not applied for these loans. There are other difficulties. The fact is that this just needs streamlining. It is as simple as that. Combined with that, we need to ensure that the July stimulus programme contains an adequate response.

We need to accept that different resources will be needed for different business sectors of society. Some people will not be looking at full reopenings and will be looking only at partial work or no work into August, September, October and beyond. We need to ensure they do not go to the wall. These businesses are the people within our community who employ other people within our community. We need to back them. If we do not, we will be headed for something far worse even than what we dealt with back in 2007 and 2008 and right through what people term the age of austerity, which we certainly do not need to go back to. What we need to do now is ensure we give people the working capital to operate the businesses that were viable beforehand and will be viable again. We need to ensure that employment is maintained and that we can put our society back into action.

If that requires that we get the proper resources and supports domestically and from Europe, that needs to be done. We also need to tackle the other issues that have already been mentioned in relation to the insurance fiasco that businesses are dealing with and the fact that we need banks to play ball.

I join my party colleagues in welcoming this Bill to the floor of the House and I express my support for the amendments tabled by Deputy O'Reilly.

I will take this opportunity to raise the issue of SMEs in my home county of Clare. Tourism is a large seasonal employer in County Clare, particularly in west Clare. Many of these businesses are small, family-run operations and operate mainly in the summer months when the industry is at its busiest. These businesses, along with many self-employed tradespersons, transportation companies and other microbusinesses, are struggling to cope as the country reopens post Covid-19. As the Minister is aware, the tourism sector across the island has taken a major blow this year due to Covid-19 and the travel restrictions. This has place between 6,000 and 8,000 seasonal jobs at risk in County Clare alone. This and Monday's announcement that Shannon Airport is looking for redundancies and pay cuts among its staff, as well as the imminent closure of Moneypoint power station, have placed a dark grey cloud over the county. Large-scale unemployment in the county is a real possibility.

A recent survey carried out by Ennis Chamber of Commerce in the middle of the pandemic found some startling numbers for the SME sector in County Clare. One of the major issues for businesses was the lack of support they were receiving from their insurance providers. This will not be a surprise to this House as the matter has been raised on several occasions. A total of 48% of respondents in the survey answered "No" when asked whether their insurance had been co-operative during the crisis. That figure is just not good enough. When asked to predict their losses going forward, 33% of respondents indicated their business losses would be between 25% and 50%, with a further 31% indicating the losses would be between 50% and 70%.

I have been told stories of grant applications being refused because they came in an hour after the deadline on a Friday evening. These SMEs have, in many cases, reduced their staffing costs to save money. This often means that administrative staff are still on furlough and the business owner is working full days before having to head home to complete the paperwork later in the evening. This is why these applications need to be simple and easy to access and complete. They need to be free from red tape and they cannot have long processing times. While it is welcome that Microfinance Ireland has been processing applications during this crisis, we need to ensure that this continues. Loans provided via Microfinance Ireland are calculated on interest rates of between 5.5% and 6.5%. How will this be of assistance to any SME facing major issues with cash flow? It is astonishing. Bank of Ireland, for example, is advertising loans to SMEs for a much better rate of 5.48% in some cases. While these loans are seen to be an easier route to finance compared with the banks, these interest rates are not competitive. For this reason, we must ensure the rates are kept as low as possible so these companies can afford to repay loans without taking on any more crippling finance they may not be able to afford down the line. At a time when the Government can borrow at 0% interest and sometimes even at negative interest rates, it is time we used this access to low interest rates to pass this on to our SMEs at the most affordable rate possible.

It is safe to say that this is a major difference of repayment amounts for a company that is already struggling to stay afloat. In a small business, this could be the difference between rehiring a part-time student and not doing so. As much as anyone else, students are dependent on these posts over the summer months to help support them over the college year. This is yet another group that is forgotten about. Canada, for example, announced at the end of April an emergency student benefit for students who have seen summer work dry up and do not qualify for their version of our pandemic unemployment payment, PUP. While it was welcome that students with part-time jobs could qualify for the PUP, this does not cover all students. While I acknowledge the Tánaiste's comments on youth unemployment, we must ensure our young people do not get left behind as we re-image post Covid-19.

Some self-employed persons, such as plumbers, carpenters and bus and taxi operators, found themselves out of work, many of them for the first time in their lives, and started to draw the PUP. Now, as the country reopens, they are being offered small jobs here and there. The problem for these people is that they must sign off the PUP if they take even one day's work. Therefore, it is not practical for them to take such work. Being self-employed means they are not entitled to claim casual jobseeker's payments which would allow them to sign off for the days they got work.

With so many people out of work or on reduced wages or hours upon returning to work, there is significant hesitation about completing home improvement works. For tradespeople, this reduced workload could continue for some time. These people are also being forgotten. There are families contemplating whether it is a good or bad idea to sign off and take the risk. They are worried what will happen at the end of all this when the PUP stops. They have other halves who cannot go back to work because they do not have the childcare facilities available to them to do so should both need to work on the same day. Many of these family-run companies have been around for years and many of them weathered the financial crisis of the 1980s and the crash of the Celtic tiger in 2008. They have never experienced anything like the current uncertainty and the inability to know what will or will not happen.

I also call on this Government to put in place a strong stimulus package to allow SMEs to bounce back post Covid-19. This package needs to be bold and radical and needs to be something that will work. These SMEs are the backbone of our economy. Recent OECD reports suggest some 92% of businesses in this State have fewer than ten employees. That clearly shows that microbusinesses are the heart of our economy. Over 70% of our workforce is employed by SMEs. If that does not show the need for a real stimulus package, I do not know what would.

As discussed by my colleague, Deputy O'Reilly, when she spoke on the Bill yesterday, Sinn Féin proposes that repayments on these loans be paused for at least 12 months. Businesses that were struggling with cash flow problems even before the onset of Covid-19 need these breaks if they are to be viable. We need to follow countries like the UK, which is providing similar stimulus packages at more affordable rates of repayment. We need to support these businesses, not cripple them with further debt as they try to reopen.

I congratulate the Minister and wish him well in his new role. It is a great honour and responsibility. Trying to get the balance right between saving lives and opening up the economy is going to be difficult and challenging, and we have to strike that balance.

Microenterprises and SMEs have experienced shocks that are putting their very existence in doubt. I heard John Moran on "Morning Ireland" last week or the week before say that €6.5 billion of funding for SMEs was announced, but only €100 million was drawn down. As my colleague, Deputy O'Reilly, said yesterday, many of these supports are inaccessible. Businesses have contacted me about the restart grant, which has been mentioned a number of times this morning and was mentioned in yesterday's debate. In many cases, they were approved for these grants weeks ago but have still not heard anything. This will soon become known as the Government of announcements because it makes announcement after announcement with very little delivery on these announcements. This will undermine the July stimulus plan and the announcement made on that.

I will give an example of an announcement on which there has been no delivery. In early May, the then Minister announced a rates waiver for certain businesses, which would allow them to claim back the rates they had claimed over the same period last year. Unfortunately, SMEs have heard nothing more to date. I have been contacted by a number of small business owners who are all in the same boat. They all have a serious shortage of cash flow and anyone who has been involved in business will know that cash is crucial to any small business.

They need this rates waiver. They need the breathing space. However, the council has not processed the waiver. It does not know the criteria and is waiting on the Department to provide instruction. The problem for small businesses is that they are still waiting. For two months, SMEs have been waiting. For two months, the council has been waiting to hear from the Government. Without this support and other supports, the businesses in question may have to close. The margin is that fine. They are balancing on a knife edge and they need everything that they can get.

Last week, I asked the Tánaiste the following questions:

Can he say why, two months on, the Government has not informed Dublin City Council of the three-month rates waiver for SMEs? Why has the largest council [Dublin City Council] ... not been updated on a scheme announced two months ago? Will he confirm that there will be no rowing back on the waiver scheme and that SMEs will receive it?

Last week, in response to those questions, the Tánaiste stated:

We informed the world that rates were being waived for companies that had to close for that three-month period. We ... have to consider extending that waiver. I do not know why Dublin City Council has not been formally informed but I will check that out.

They are still waiting. They still have not heard anything. The SMEs have not heard anything. The local authorities have not heard anything. That was a week ago. I have been in touch with the chief executive of Dublin City Council and he has informed me that the introduction of the rates waiver is awaiting decision by the Department on the details of the scheme. Despite intensive pressure from the local authority sector, no circular has been issued with details of that scheme. It seems that those in this Government and that which preceded it have been making announcements and then sitting on their hands. What is happening in the Department that the Tánaiste does not know that the rates waiver has not been delivered two months after it was announced?

As already stated, the Tánaiste indicated last week that he announced to the world the rates waiver scheme. However, the Department has done nothing to make sure that it is delivered. This delay in deciding on the scheme is unhelpful to both SMEs and local authorities. The local authorities need to know the criteria for the waiver. They need to know who is eligible and who is not. They need to know because they themselves need to budget. I ask that the Tánaiste and the Minister of State ensure that the local authorities are notified of the criteria for the rates waiver scheme and that it is issued as a matter of urgency. Otherwise, the Government will become known as the Government for announcements.

Go raibh maith agat, a Theachta. An bhfuil aon duine ar thaobh an Rialtais ag ofráil? Gan aon duine ansin, glaofaidh mé ar an Teachta Denis Naughten.

The Acting Chairman is doing well up there today. We will take note of that.

I welcome the opportunity to speak on this legislation and I congratulate the Minister of State on his appointment to this particular Department. I have no doubt that he will do exceptionally well there. I wish him the best of luck in the Department.

The big focus for many of us is local business. These are the companies that are not exporting. They are not big American multinationals but they are the lifeblood of the economy in places right across the regions. These companies employ 58% of the total workforce, or the total number of people who are paying tax. Many of them have been badly hit as a result of Covid-19 and it is a considerable challenge for them now to try to redesign their way of operating.

As the Minister of State will be aware, in my previous life as Minister I actively promoted a Government scheme called the trading online voucher in order to try to get businesses to start trading online. I commend the Government on increasing the grant rate in this regard, from 50% up to 90%, and there has been a phenomenal take-up of that voucher. The take-up has been a phenomenal for a number of reasons. First, businesses and businesspeople were not working. They had time to carry out a little more research than would have been the case when there were working day to day in trying to keep money coming through the door and many of them researched this trading online voucher. The fact that there was a 90% grant absolutely made it attractive. However, what has been most frustrating is that this grant has dried up. The reason it has dried up is because the funding is not being made available, through the Department of Communications, Climate Action and Environment, to the local enterprise offices. The offices have already drawn down their full allocation for this year. A supplementary allocation was given to the local enterprise offices for the trading online voucher but all of that was drawn down immediately. Even counties such as Roscommon and Galway, for example, which would not be the biggest counties in terms of SMEs, have waiting lists of people who have gone through the training process, have been approved for a grant and are now waiting for that grant to be paid.

We cannot allow this to continue because these businesses need to redesign what they are doing. They need to reinvent themselves and their doing so should not be dependent on a very small amount of grant aid that is being made available. That single investment of up to €2,500 could be the difference between a company staying afloat or not and redesigning how it delivers for its customers. For very little money, we can have a dramatic impact on the viability of many businesses across this country.

I accept that we are talking about providing credit. There has been much debate about the interest rate for that credit, but here is something that is a phenomenal success. The data has shown that anyone who has availed of the voucher in the past has seen their number of employees increase. This is an absolute no-brainer and yet Government is holding this scheme by the neck and not allowing it to grow because it will not put a small amount of money into it. It is farcical to talk about an economic stimulus in three weeks' time if we are holding every business that wants to redesign itself by the neck and saying that it cannot grow and develop because we are not prepared to give it the €2,500 grant. The same applies to microfinance. It is all well and good but, as the Minister of State knows well, many businesses out there do not want to borrow. Here we have an opportunity to incentivise the redesign of how they deliver their business with a small grant and yet we are not prepared to give them that grant.

In addition, we cannot even make the online course available to them in order that they can do the training. The decision has been taken that we will strangle this particular scheme now and will not let people do the online course so that they would be eligible for the grant. The studies have shown that 50% of people who do the online course find that they already have the existing infrastructure in place, they do not need to develop a new online trading platform and they can utilise the tools they have at present. We are strangling those particular businesses as well because we are not giving them access to that course. These are the basic fundamentals that can have a significant impact tomorrow morning on redesigning our economy post Covid and allowing companies to survive.

The reason I am so animated about this scheme is that the figures relating to the analysis that has already been carried out show that this is probably one of the most successful grant schemes ever introduced in the State.

The figures I will give are pre-Covid-19, brought up to date using research carried out roughly to give the current figures based on the growth in online trading. On average, pre-Covid-19, Irish people were spending €21,000 every minute online. The difficulty is that €14,000 a minute of that money was being spent on goods and services outside of Ireland. Straightaway, a huge market is available there to Irish businesses if they can start trading online. Roughly one third of Irish businesses are trading online, so there is a great opportunity to grow that area, and about one fifth of businesses are selling online overseas. There is a massive opportunity to meet domestic demand and to start to trade internationally, without having to go through an Enterprise Ireland office in France, Germany or somewhere else. This is small money to start getting businesses trading online and thinking about new opportunities for growth.

Pre-Covid-19, about two thirds of people in this country were purchasing goods and services online. Naturally enough, that has increased dramatically during the Covid-19 crisis. Figures show that 90% of people will research a product online before buying it. They may not buy that product online, but they will research it online. From analysis of Irish people, what is interesting is that they will pay more to buy a product locally rather than internationally. The reason is that the quality of a product is guaranteed. If there is a problem with the product, it is easy physically to bring it back to a local business rather than having to put it in the post and send it halfway across the world.

People are prepared to buy locally online. The difficulty is that we are not giving those businesses the opportunity to have their shops open online and that is because the Government has decided that the quota has been hit for this year, regardless of Covid-19, and those businesses will have to wait until next year to start trading online. Yet, we will spend the next couple of weeks bringing in new legislation, schemes and initiatives that will be full of bureaucracy and red tape and will take months to implement and of which businesses may not then avail. The online trading voucher scheme, however, has been a phenomenal success, but we are not prepared to put in a small amount of money to transform businesses right across the country. I appeal to the Minister of State, therefore, to get the finger out and ensure funding is put in place for this scheme. It has been a great success - a proven success - and it has the ability to transform absolutely the delivery of services in this country.

While I am discussing the trading online voucher scheme, until now businesses such as restaurants were not allowed to avail of it. I know of one local business in Roscommon town, The Good Place cafe, which has developed its own app. It has been a phenomenal success during the Covid-19 crisis and has allowed people to order and pay for their products online and collect them at the door. If that business has been able to stay above water by making an app available, surely we should be facilitating other businesses and services to do the same thing. The focus has to be on trying to keep people in employment and the biggest challenge in doing that will be the services sector. Again, for a small grant of €2,500 we can keep four, five or six people employed in these businesses and yet we are not prepared to release the money to do that. I hope that before the end of this month we will see the money being provided in a substantial way, not piecemeal or drip fed, to allow the trading online voucher courses to continue and allow people to draw down those grants as quickly as possible.

The second issue I want to raise concerns the 138 different State agencies that taxpayers are funding to support small businesses. We have 35 Government agencies, 31 local authorities, 49 local development companies and 31 enterprise offices. All of them are providing some type of support to SMEs. Is it any wonder that businesses are confused about the supports that exist and are available to them? Every opportunity I get I actively encourage businesses to go on the www.supportingsmes.gov.ie website, access the small business tool, put in the details of their business and quickly find out what supports and grants are available. Not enough businesses, however, are filling out that online tool. We need to start working with the businesses that are not doing that. The Government will advertise, but advertisement has not worked to date. The Government will use seminars, but seminars have not worked to date either, because the people whom we need to use that online tool are the very ones who will not attend those seminars.

In fairness to the Government, there is a huge range of supports, including grants, advice and access to capital in various forms. I will make a suggestion to the Minister of State, however. As he knows, the LEADER companies across the country are winding down and the funding available to the rural development Vote in the Department of Agriculture, Food and the Marine is also winding down. We have a huge cohort of staff there who have great skills in working with small, indigenous businesses. I suggest we redeploy those staff, and any other staff within Government agencies who may be surplus to requirements at the moment as a result of Covid-19, and that they go individually, door-to-door to these businesses, sit down with them, fill out the online SME tool and support those businesses in applying for the various grants and supports available.

I suggest that because I think this is the single biggest weakness we have now. We can bring forward all the legislation we like in the next weeks and months to support businesses, but the ones that are going to come for help are the ones where it is now too late because they are already about to close their doors or are not prepared to reopen them. Staff in the LEADER companies across the country should be going to those businesses and knocking on their doors. They should sit down with those employers or self-employed people, go through the SME online tool, fill it out with them, identify what supports are available and assist those businesses in applying for and drawing down those supports.

The accessibility of these supports is a fundamental problem. We have a listening ear among businesses, but they do not know where to start. Many of the people involved may not be tech literate, yet these are the businesses we need to ensure are able to survive post-Covid-19. Loans are fine and I welcome this legislation. There has been debate regarding the interest rate being charged, but my and the Minister of State's engagement with businesses across the region has shown they do not want to get into further debt. Many of those businesses cannot afford to get into further debt and many are looking at an uncertain future.

They are weighing up whether they should open their doors. They are also wondering whether they should re-employ the same number of staff and how to lay off staff. A phenomenal number of businesses are getting human resource advice on how to lay off staff.

Yet we are not prepared to spend a very small amount of money on informing people that there are supports, that advice and resources put in place by the Government are available to them as businesses, and that we are prepared to work through those with them and give them the advice they need. Do not wait for those businesses to close their doors. Do not wait for them to knock on the door. Let us get out there and meet them face to face. Let us sit down with them and fill out those online tools. Let us assist them in applying for the various supports that are available, and there are many. The Minister of State will be amazed at the number of businesses that will go to the wall in six months because they did not avail of the restart grant or the rates waiver because they were unaware of them. We cannot afford to do that. We cannot afford to have people become unemployed because they did not access all of the available supports.

New legislation is welcome and we in the Regional Group will assist Government in bringing it forward. However, let us utilise what we have at the moment. Let us support our existing businesses and dedicated and loyal employers to avail of the financial supports already in place. Let us maximise the utilisation of those in the short term, and then explain to them how they can grow and develop their business with these new incentives.

Deputy Danny Healy Rae is sharing time with Deputies Michael Healy Rae, Nolan and O'Donoghue. You seem a long way away, Deputy.

I am very far away but I am still here anyway. I congratulate the Minister of State, Deputy English, on his new post. I wish him well. I had a lot of interaction with him when he was at the Department of Housing, Planning and Local Government. I hope we will continue to work positively on behalf of the people we represent.

First, I have to declare that I am a small publican in a small rural village. Publicans around the county of Kerry, and indeed countrywide, are very concerned about comments made by the new Taoiseach, Deputy Micheál Martin. They are wondering if pubs will be allowed to open on 20 July. In that vein, what is the difference between somebody having a meal and a pint in a restaurant and someone who comes after having his or her meal, who can only afford the price of two or three pints, and who cannot get in anywhere for a pint? That does not make sense to me. Pubs should be open now the same as restaurants-cum-pubs. They are regulated and always have been, and over the years they have provided a massive service to communities, especially rural communities. Now, sadly, they are closed, and it is in doubt whether they will open. What difference is it to have the meal in the pub or to have it before coming to the pub? It should not be any different. It only makes sense where there are lots of restaurants in urban areas or where there are crowds, and we saw there were crowds in Dublin, and people are queuing up to get in. We know that when only half of the places are open, more people will go to places that are open when they cannot got to places that are closed. People make sense of what is done, but what is being done does not help stop the coronavirus one iota.

I want to talk about the VAT rate for the hotel and tourism industries, which have been calling for a reduction for many weeks and months now. The former Minister of State, Deputy Griffin, said there should be no problem in reducing it but he did not do it. I must remind him that he was the Minister of State involved in raising it from 9% to 13.5%. I call for it to be reduced to at least 5% to help these people who are on their knees.

Bus operators and drivers and taxi drivers and owners are on their knees, and we need give them help. Some of them are afraid to come off the €350 pandemic unemployment payment because if they try and fail, and it is very doubtful whether they will succeed, they cannot then get back on the payment. Something needs to be done for the people who will try. I ask that the temporary wage subsidy scheme be extended to include seasonal workers who were not working in January or February.

I must mention our new Minister, Deputy Cowen. His case should be closed now because he paid the price, he paid the penalty and he has said he is sorry. What I am more interested in now is what he will do as Minister with responsibility for agriculture and how he will deal with all the issues.

One issue we must deal with is the fair deal scheme for farmers, because it is not fair now, and even the Bill that is proposed is not adequate. Will the Minister ensure that the value of the farm is disregarded and that the scheme will apply only to the residential house on the land, as is the case for everyone else throughout the country? The value of the farm should be disregarded. Where a young fellow values his farm at just €400,000, the sum he will have to pay under the three-year cap on the value of the farm could amount to €80,000 on top of that €400,000.

I am sorry. I am eating into someone else's time.

I remind Deputies that we are talking about the Microenterprise Loan Fund (Amendment) Bill. There are a lot of important things to talk about, but if we could focus on the Bill, which is the subject matter before us, it would be kind of helpful.

I wish to speak to the Microenterprise Loan Fund (Amendment) Bill because it is important. We, as Members, are elected to represent our constituents from all around the country, and I, for County Kerry, support the Microenterprise Loan Fund (Amendment) Bill, quite simply because every method of finance that is directed, particularly to our SMEs, is important at this critical time. I am here today to represent the business people of Kerry - the farmers, fishermen, small operators, and whatever type of people who are in business and are trying to keep, create and sustain the jobs they already have, keep their families and themselves in gainful employment, or get them back into gainful employment.

It is important, in speaking to this Bill, that I mention the important role our mainstay banks, credit unions and post offices have to play. Every institution that has anything to do with finance must co-operate and work with our small businesses and do everything to ensure they will be able to get up and running again. For far too long the doors have been closed. It is through nobody's fault. It had to be done. The wheels of industry have stopped rolling. We want desperately to get these businesses up and running again.

On the issue of our credit unions and the important role they will play over the coming weeks and months, the regulatory levies imposed on them have gone up 264% in the past four or five years. That is totally unfair and wrong and should never have happened. I cannot understand why regulatory fees should have gone up by such an enormous amount.

Our post offices must be supported because these are institutions of the State that will be important in revitalising our small businesses.

We are charged with working here for the next number of weeks to ensure that the July provision will be rolled out and will be a positive measure, and to ensure that all the money Ireland can access abroad is brought here and put into various schemes in order that the economy can get going again. That is very important.

I want to emphasise that at this time small businesses want grants rather than loans. Many of the small businesses we are trying to support already have loans that they can longer sustain or carry. They need grants and assistance. I compliment and thank the previous Government for putting in place the wage subsidy scheme and the working capital loan scheme. I wish to thank in advance the new Government for keeping them in place. We are desperately relying on the Minister of State and others, including the new Taoiseach, to support our small businesses.

As has been stated, I am worried about the Taoiseach's comments. I want to put on the record of the Dáil that the Taoiseach should not paint all of Ireland with a Dublin brush when he is considering what to do over the coming days and weeks. He, more than anybody in the world, should know that there is a world beyond the Red Cow roundabout. I want him to think of that when he is making any decisions. With the permission of the Whip, I will propose an amendment to section 120 of the Bill. I will discuss this matter with the Whip. It is an important amendment and shows that when decisions are being made the areas affected should be looked at in isolation rather than in terms of the totality of the country as happened before.

Deputy Carol Nolan lives beyond the Red Cow roundabout.

I want to begin by wishing the Minister of State every success in his new role, particularly as, now more than ever, it is very important to get businesses back up and running. I ask him to ensure that as many of our SMEs as possible survive. I welcome the opportunity to speak on this important Bill.

As we know, microenterprises are the beating heart of the local economy. To get that heart pumping again, we must ensure that the Government and local authorities get back to basics. They must remember that well over 90% of all of the trade in the State involves SMEs and microenterprises with fewer than ten employees. In April, I asked the Minister of State's predecessor, the current Minister for Employment Affairs and Social Protection, Deputy Humphreys, if she would consider implementing a nationwide shop local campaign to encourage people and communities to support local businesses because there is, as we know, a need now more than ever to make sure that our businesses are adequately supported, helped through every step and made aware of the schemes that exist in order to ensure their survival.

Each year we run the fantastic Tidy Towns competition. It would be great if there was something similar at national level for towns which have contributed the most to bring about a genuine shop local spirit. As chair of the retail consultation forum, the Minister of State will be acutely aware that Covid-19 has brought particular challenges for small and large retailers across the State. That is why I was somewhat taken aback last week when he announced that the projected gross expenditure for the Department in the original Estimate was €970.9 million. That is a lot of money, but, as he noted, it represented an increase of only €21 million on the 2019 Revised Estimates allocation. Is he certain that his Department will have sufficient resources to deal with the scale of the problem that exists for microenterprises?

Section 6 seeks to make provision that Microfinance Ireland may borrow money from a promotional financial institution, but that the aggregate of any borrowings at any one time shall not exceed €100 million. That is a significant sum of money, but do we believe it will be adequate to fulfil the task that lies before us? As the Government has acknowledged, the unprecedented circumstances of the pandemic have resulted in a swiftly evolving landscape for enterprises. This will mean that it must keep the supports provided under review and utilise the appropriate mechanisms to adjust and amend the supports and their timeframes accordingly. This is vital.

We have to create a space in which the voices of local retailers are heard, and not just heard but acted upon. As I said, everything needs to be done to ensure that they are supported and helped in their struggle for survival. Small businesses are being lumped with levels of debt that are unsustainable in the short term. This matter needs to be examined. Many owners of small businesses have told me that they do not want to incur debts and would instead prefer supports.

We know from the most recent report from Microfinance Ireland that to the end of December 2019, 346 businesses have failed and 2,085 loans were drawn down. If those were the circumstances which pertained in 2019 prior to Covid, we can only anticipate how much worse things will be from here on. It was also recently reported that investors in Irish banks in which the Government holds large stakes are nervous about the sector and about facing high levels of bad loans if they continue to lend to small businesses without the types of credit guarantee schemes that have emerged elsewhere in Europe. Small businesses need guarantees that applying to access funds will not be the straw that breaks their backs. They will need more than warm words, rhetoric and easy money put before them. They will need assurances that if they try their best to retain employment in local economies that they will not be punished but rather supported. I will end on that note.

The importance of the Bill cannot be underestimated. Some 1.5 million people in Ireland are employed by the SME sector, which needs monetary help in order to remain viable. I understand the priority that needs to be given to increasing this fund. Compensation needs to be provided for the rebate of fixed costs and the losses endured by SMEs during the Covid-19 shutdown. The system needs to be simple to operate. An SME accountant can verify the loss of revenue and expenditure during the pandemic. The process can be administered through Revenue.

We need to discuss the issue of clarity regarding the rates charged for borrowing. It should be noted that the current stimulus package is not working. Only €100 million has been drawn down from a package of €6.5 billion. Why is this the case? The answer is that it is too cumbersome. It is not just me saying this; it has been echoed by the Central Bank, chambers of commerce throughout Ireland and KPMG. The rates charged should be related to the cost of fund with a minimum administration charge. The cost of loans needs to be as close to 0% as possible and there should be no repayments for a year.

The current process is far too complicated. The SME sector was a casualty of the Government's request to close. The policing of loans and rent should be monitored by way of staged payments. If debtors are to be paid off, they should need to provide proof that they have been paid. In simple terms, if an SME owes money to a local firm or business and it cannot pay, that will lead to a configuration effect and two companies will close down. Money must be redirected now.

Forty per cent of businesses in Limerick will collapse if compensation is not provided. Businesses are so busy trying to reopen they do not realise how serious the cash flow problem is. They are sitting on the cash. If they do not pay their creditors, creditors too will collapse. The Government needs to support businesses now or it will end up paying out more on the dole. Limerick has a city but it also has a rural county which is very dependent on small and medium enterprises. Confidence will follow.

We need this amending legislation enacted otherwise all of our businesses will close. Is this what we want to see happening? There are businesses working to reopen but the credit controls previously in place no longer exist and suppliers are seeking funds upfront before the businesses can reopen. This is not how we open our businesses. In other countries, businesses are being visited and consulted on what government can do to help. This week, I learned that three publicans in my area will not reopen because they cannot see a future in the business. Yesterday, I visited a pub in Kilmallock where I had lunch, but without a pint. This pub has put in place all of the required social distancing measures while retaining all of its staff.

We need to get funding to businesses now to protect cash flow going forward. There is a simple process by which this could be done. The funding could be provided through Revenue and processed by the accountants therein. We need to stop complicating the issue. We need to engage with businesses on how we can help them to reopen and get our employees back to work and then they will support us going forward.

Debate adjourned.