Deputy Jim O'Callaghan has outlined the stark numbers that have presented with Covid-19. We have faced an extreme challenge. It is appropriate to note that in fact has been the case throughout our history. I refer to famine, invasion, occupation and economic struggle. That hardship is recognised. I expect the Covid-19 pandemic will, unfortunately, cause a very significant economic difficulty for this nation. The challenge we face is of a different type than we are used to throughout our history. The challenge of tackling Covid-19 will require the State to act in ways it has never acted before. We have risen to the challenges of this situation, both in terms of the response of individual citizens and the State's response by means of public sector workers, from hospital porters and doctors and nurses, up to and including Members of the Oireachtas who passed emergency legislation some months ago for the purposes of ensuring that citizens were supported through this process during the lockdown.
Unfortunately, it does appear the struggle will continue for some time. The economic fallout from the virus will likely long outlast the impacts of the virus itself. As we are all acutely aware, Ireland's business community has been hit hard in recent months and this scene has been replicated across the world. The global economy now faces the challenge of a generation. The spectre of a second wave of the virus in the autumn and winter has sown scepticism and caution within the business community and international markets. It is in this light we can recognise the need for clear and effective domestic legislation to support businesses and people through this economically turbulent time. Thousands of families across Ireland woke up this morning filled with worry, as their livelihoods have been severely curtailed in recent months. We will have to wait, and still may never know, the full extent that this period has had on the mental health and well-being of so many people in our country. For most, the sacrifice of jobs and livelihoods were made with grace, dignity and understanding, understanding that these sacrifices were made to protect the lives of the vulnerable in our community and to protect people they may never meet. Together, we flattened the curve and are doing our best to keep the situation under control. However, as society and the economy have begun to reopen, the risks to the future financial viability of many businesses in Ireland are becoming exposed and pose a real threat to our long-term economic health.
Small and medium enterprises, SMEs, play one of the most significant roles in the economy, employing approximately 1 million people prior to the pandemic, driving new innovation and advancing our contribution to every field of endeavour. Their impact on the success of this country cannot be overstated. I am, therefore, pleased that since the earliest phases of the pandemic, supports for SMEs have been made available and continue to be adapted to reflect the economic reality of this crisis. This Bill will result in the implementation and development of the largest credit guarantee in the history of the State, accurately reflecting the magnitude of the issues in front of us. Such measures, along with important amendments to company law legislation and the grant schemes available, will provide SMEs with a stable environment in which they can navigate their way through this crisis.
The availability of, and access to, stable lines of credit may prove to be a significant factor in the survival of countless businesses, reaching into every sector of our economy and touching every village in Ireland. While it may not be possible to protect every business and job, we can limit our exposure to the worst ramifications of the global economic downturn. By acting now and implementing the necessary changes to give SMEs breathing space, we can weather this storm and emerge from the crisis in a position of stability that will allow us to regain our growth and take advantage of new opportunities.
For many years, Ireland has been an attractive destination for foreign direct investment, FDI. This source of revenue and jobs has undoubtedly contributed to the transformation of our economy and our island. However, in a global environment of uncertainty, we must give pause to consider, rightly, the long-term health of the economy. We have a strong foundation of SMEs and this, combined with an attractive and open system that supports new companies being launched and expanded in Ireland, can secure continued growth into the future.
The Covid-19 pandemic has demanded changes within our society and not all of these changes can or will be reversed. The nature of work, long debated over recent years, has been shown to be more adaptable than we might have ordinarily thought. Working from home and improved work-life balance have been shown to be possible and to be a viable arrangement for many businesses. Helping SMEs adapt to these and other changes help the whole of society and can ease certain costs SMEs and employees endure.
Developing a flexible and innovative economy and business environment can provide Ireland with a competitive edge over other nations when we, as an international community, overcome the impacts of Covid. Creating innovation hubs, increasing programmes to enhance the financial education of SME owners, drafting effective national SME policies and action plans, as well as supporting a significant increase in the digitalisation that SMEs have clearly shown appetite for in recent months, based on applications for the trading online voucher scheme, will deliver real change to our SME sector. I believe that a renewed approach towards SMEs can benefit all of society, helping, in effect, to stabilise the present but plan for the future and better days.
Ireland has the potential to make significant gains in the years ahead. No longer bound by geographic or industrial might, Ireland finds itself competing in a global economy, driven by progress in innovation, the digital economy, medical advancements and environmentally friendly technology. These sectors will see an ever-increasing number of jobs and revenue streams in the decades ahead. Through a young and educated workforce, we have the ability to provide the right environment for businesses and start-ups to release the full potential of our people, helping to drive a new era of financial and economic success. None of this will be easily gained, nor will it be possible to achieve in the absence of a vibrant and healthy SME sector. Diversifying our approach and ensuring SMEs and entrepreneurs have the supports they need to thrive will be to the long-term benefit of everyone, lifting our society to new heights and emerging from this time of struggle with a positive story to tell future generations.
As was mentioned by Deputy O'Callaghan, the unemployment rate is at 22%. It was a lot higher. Hundreds of thousands of people in the State are still being supported through the wage subsidy scheme and the pandemic unemployment payment, PUP. Those decisions were made by Members to the betterment and improvement of society as a whole.
The decisions the House will make in the coming weeks and months will shape the economic future of the country for years to come. It is imperative that we send a message to existing SMEs and young entrepreneurs that the Government and the House supports them on every step of their companies' journey from their beginning, through an approachable system that fosters company growth, to ongoing support through business development grants and to credit support should those businesses experience difficult times. Providing certainty to our business community will result in Ireland having a better future.
Some of the difficulties with the previous scheme are well known to the business community. Given the changes made in 2012, certain aspects of the scheme have been a little bit slow to be taken up by the business community. I have long believed a business-led simplification of the credit guarantee schemes available through the State should be made. While I accept, of course, that our financial institutions must bear some of the risk of State-backed supports to the SME sector, I wonder whether there are lessons we can learn from recent years, in respect of the success rate of individual companies drawing down the credit guarantee schemes available, to ensure this enhanced scheme with a €2 billion limit does what Members want it to do. This is something worthy of consideration.
We must consider a number of aspects of the Bill and associated legislation, particularly as September approaches. One of the discussions that took place last night with the Minister for Children and Youth Affairs on a motion tabled by the Sinn Féin party was on supports for the childcare sector. This is a prime example of parents who might want to go back to work and who will avail of their children returning to school for the first time in six months when they start in September. If a child is unable to attend school because of a cold, a respiratory short-term illness or a sniffle, and is not allowed into the classroom because of certain arrangements, what of the parent trying to run a small business or who is an employee in a small business? What protection will these individuals have in the context of their employment rights? Should they have to take additional time off? Many parents throughout the island have run out of annual leave. There are associated considerations to be made by all of us in the House. While I am certain the Bill will pass, I am not certain we have the time left in the Dáil schedule to consider all aspects and implications of the Covid-19 pandemic on employment rights and the various supports that have to be provided across the board throughout all sectors.
I welcome the Bill. I have long been an advocate of altering the system we have in place for the purposes of making it easier for businesses to draw down on it. However, I recognise that certain financial institutions will review an application to the credit guarantee scheme or other State support scheme and apply what I believe to be difficult criteria, which involve companies being refused even if they are granted by the Department's process. Unfortunately, this leads to the type of uncertainty for businesses whereby they might not be in a position to keep their doors open and retain the 1 million people who work in the SME sector. I look forward to the speedy passage of the Bill.
I would like to take this opportunity to acknowledge and congratulate Deputy English on his appointment as Minister of State at the Department. I am certain he will bring the same zeal he brought to housing to this Department. I wish him and the Minister well in their endeavours.