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Seanad Éireann debate -
Wednesday, 28 Mar 2012

Vol. 214 No. 10

Small Business: Motion

I move:

That Seanad Éireann:

notes with grave concern the difficult economic position faced by many of those engaged in small business at this time;

notes the need to make more supports available for those who are self-employed;

proposes that the Government consider the adoption of a number of measures specifically to support small business and those who are self-employed, to include:

(a) addressing the difficulties with late payments for those contracted to provide goods and services to the public sector;

(b) opening up the rules on tender and procurement again to enable a wider range of firms and businesses to seek public contracts;

(c) the provision of greater levels of social protection, including protection in the event of illness, for those who are self-employed; and in particular for those whose business fails leading to a collapse of income;

(d) addressing high levels of local authority rates;

(e) enabling company directors to invest money from their private pension funds into their businesses; and

(f) ensuring increased levels of access to credit and finance facilities for small and medium enterprises.

I welcome the Minister of State, Deputy Perry, to the House. It is a privilege to move the motion. I welcome, in the Visitors Gallery, a number of representatives of the Irish Small and Medium Enterprises Association, Small Firms Association, Dublin Chamber of Commerce and local chambers of commerce, including the Letterkenny and County Laois chambers. I will be parochial and give a special welcome to my colleague from the Carrick-on-Suir Business Association, Seamus Campbell, a good Letterkenny man who supports Finn Harps.

When a retailer opens his or her shop door in the morning he or she is at once a worker, a business person and an employer. I wish to debunk the myth that the Labour Party is anti-business. The majority of my Labour Party colleagues in the Seanad are either directly involved in business, come from a business background or are from families who own a business. My mother ran a greengrocer's shop for many years, while my father bought bread from my grandfather, a baker, and established a bread round in south County Tipperary. He remained self-employed for many years.

Social democrats across Europe, especially in the Scandinavian countries, have been to the forefront of business and business opportunity. Europe has some of the greatest economies in the world, notwithstanding the global recession. That is proof positive that social democrats can also be business people who are pro-business, particularly pro-small business, as that is what we are discussing here today.

Unlike the banks, the Labour Party is open for business and open to business. We sincerely welcome the visitors to the Visitors Gallery in order that they can witness this debate which I hope will be of assistance to small businesses. In the last Administration the Labour Party served in, under the then Minister for Finance, Deputy Ruairí Quinn, the Labour Party and its Fine Gael colleagues in government created 1,000 jobs per week. When we left government in 1997, this country was on a sound financial footing. I will not go into the history that followed, we are all aware of what happened.

The Government so far has introduced an action plan for jobs and the Minister of State is directly involved in it. We aim to create 100,000 jobs in the next number of years. We aim to put €150 million into capital schemes for small businesses, to create a micro-loan funds scheme of €100 million for small businesses and we are already providing assistance and mentoring to small businesses across the country. The county and city enterprise systems have been turned upside down and Enterprise Ireland is now coming to the fore for the provision of services and employment opportunities in Ireland. We are doing a good job and we have only been in government for one year. There are, however, many other things that need to be done. This motion is about the issues that we see as Labour Party Senators who have listened, discussed and seen through our own life experiences the pressure placed on small businesses.

This motion is an attempt to focus the attention of Government on a number of specific areas. My colleagues will deal with the specifics in detail as we go through the debate. We want to see positive action on late payments and an open tender process where it does not cost small businesses to submit tenders, as is the case in Britain. We want to ensure there is social protection for the self-employed who, if they are sick, must rely on their savings to survive or, if they lose their business, have no social protection at all. The person who opens the door is a worker, but as he or she is also self-employed, he or she should be treated the same.

We want to tackle high business rates. I served on a local authority for almost 25 years and those rates are crippling small businesses, particularly in rural Ireland. We want to see opportunities for savings and pension schemes to be reinvested into one's own business or certainly into the general business world. Most importantly, we want to see real access to credit, not what we hear from the banks. Last year, despite what the banks said, the Central Bank reports that only €3.1 billion was made available to small businesses. This year the target is €7 billion and we want every cent of that to be available to small businesses. The Government has put that in place and we want to ensure it can be drawn down. I spent an hour with an accountant on Monday and he told me of five cases where the bank offered the loan but the terms were so prohibitive that not one of his clients could take it.

We welcome the efforts of business in this country. Chartered Accountants Ireland has made free business mentoring available to struggling small businesses. Is that not socialism at work? I think it is. It is the social democratic attitude to help a fellow person who is struggling. We have also seen at local level strong businesses mentoring new and up and coming businesses. We have seen 30,000 civil servants retiring in the last few months, some of them at 50 years of age, who have collateral and funding and who want to start small businesses. They have good ideas and we need to encourage people to put the money into starting businesses and creating employment.

We acknowledge the problems that have been outlined by ISME, the Small Firms Association and Dublin Chamber of Commerce that there are delays of up to 120 days in payments, which is unsustainable for any small business. The lack of a social welfare safety net is a major problem for small businesses, as are the difficulties in the tendering process, the high costs for energy and transport and the resistance of banks to lending. We recognise all of these problems. Our target and that of business in this country should be that most of the €14 billion per annum put up by Government and local authorities for tendering should be kept in this country. That equates to 11.5% of GNP, a huge amount.

During this debate, my colleagues will outline in detail how the Labour Party feels these issues can be tackled and how together with the business organisations and community, the worker can remain as an employer and we can work together in small, medium and large businesses.

I welcome the Minister of State to the House and acknowledge our guests in the Visitors Gallery.

Before I commence my contribution I want to say that I had hoped that we could add to the goal of helping small and medium businesses in these constrained times. I had hoped that we could discuss some of the measures that we Labour Party Senators think might go some way towards finding solutions. It would be easier to discuss these ideas, however, if we had some Members from the Opposition here to listen to what we are saying. I am very disappointed with the turnout. I hope that this debate can be taken in the manner in which it is intended and not used as an exercise for Government bashing and I trust that my colleagues on the other side of the House, when they arrive, will indulge us in this.

To underscore the importance of this sector, we note that SMEs account for 99% of enterprises and 68% of employment. We have seen the economy shrink by nearly 20% in four years, we have seen unemployment rise by nearly 300,000 in the same period and we have seen businesses starved of finance. If we are to recover, and we will recover, the SME sector has a vital role to play in that recovery. We have seen welcome growth in export revenue but the domestic side of the economy remains flat. Without growth on the domestic side, we will not achieve sustainable levels of employment or a meaningful level of progress.

My colleagues will outline some of our ideas but I will concentrate on an issue which has received widespread comment recently, namely, allowing directors of companies have access to their pensions in order to support their businesses. We have structured the motion in the manner outlined to tease out the implications of this suggestion. There is a certain attraction in this proposal. If a director of a company has built up a substantial pension fund and now finds that his business is facing challenges in accessing finance, why should that director not be allowed to use a portion of his pension fund to support that business? It is a sensible and simple option but in life few things are simple and in politics few things are sensible.

One difficulty that becomes apparent when we examine this issue is the idea, which is a core issue with regard to pensions and the theory underpinning the provision of pensions, of risk diversity. Best practice in this regard says that one's entire pension fund should not be invested in one sector of the economy or in one geographical area. The risk should be spread across a range of sectors and industries and even a range of countries. We can imagine what would have happened if the pension industry had decided during the boom that property in Ireland would yield a good return or, worse, that shares in Anglo Irish Bank would. What if we had invested a substantial portion of our pension funds in such areas? Thankfully, we did not. Diversity of risk is very welcome in this area.

We must be informed by the expert view in this case. That view clearly points in the direction that the proposal might not achieve the outcome we hope to achieve and that the entire assets of a business owner, that is, his business and pension, would be exposed to risk if we followed this course of action. However, there is scope to develop and further examine the merits of this proposal. We should examine the issue of pension fund investment in a more strategic way. There are €72 billion in Irish pension funds and approximately 19% of these funds are invested in Ireland. The Irish Taxation Institute has proposed that we should find a way to incentivise the industry to invest more in small and medium enterprise. It suggests that a 5% investment would result in a fund of €3.5 billion being made available for investment in this sector.

The main responsibility of pension fund trustees is to maximise the benefit and return to their members. We must find a way to make it an attractive proposition for managers of pension funds to make this decision. I do not believe we can legislate to coerce pension funds to act in this way, nor would it be desirable. I believe this must be done through the taxation system. I am aware that a great deal of work is being done in this area in the Department and in some private sector institutions. We expect a working paper to emerge in the near future which might give expression in further detail to some of the ideas I have mentioned.

Another area where the pension funds could play a vital part in national recovery is through investment in high potential start-up enterprises. These are enterprises that employ ten people or have a turnover of more than €1 million and have export potential. It is noticeable, and ironic, that the main seed fund and venture funds in Ireland appear to be risk averse. Several business ideas have failed due to the scarcity of investment or risk money. Enterprise Ireland's annual report shows that it has €15 million to invest in seed capital. Again, if we can find a way to incentivise the pension funds to invest in this area, it would make all the difference for many entrepreneurs. Even a 0.1% investment would make €72 million available. This is minuscule in the general scheme of things but imagine what the most imaginative and innovative entrepreneurs in this country could do if they had access to such a fund.

I could speak all day on this issue, but I doubt the Acting Chairman would allow that. I will conclude by asking the Minister to give consideration to some of the ideas I have outlined. I hope to speak personally to the Minister or his officials in the next couple of days.

I move amendment No. 2:

After "at this time" in the third line to add:

"—criticises the Government's ongoing failure to address the lack of credit available to SMEs.

notes that the Government has completely abandoned its pre-election and programme for Government promises on addressing upward only rent reviews; and

further notes that the Government parties, the Labour Party and Fine Gael, have a control of the majority of rate setting local authorities across the country."

I welcome the Minister of State, Deputy John Perry. I am fascinated by the contributions of the two Senators. Is it due to feeling guilty that they put down this motion? They are in Government. The issue I wish to address is access to credit, which Members have heard me discussing on numerous occasions in the past six months. I do not know why the Senators cannot exert their influence on their partners in government on the issue of lack of credit for SMEs.

On the Order of Business this morning we spoke about the disarray in the Government regarding the DEIS schools and its lack of leadership in dealing with the household charge. Fianna Fáil supports the charge, and has supported it from the start. I paid the charge immediately. However, the lack of leadership by the Government on this issue is pitiful and it has frightened people throughout Ireland. It is chaotic. The Minister for Social Protection, Deputy Joan Burton, is saying one thing, that the charge can be paid in a post office, and the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, said two weeks ago that people liked to get a bill. I find that confusing. Then the Minister of State, Deputy Lucinda Creighton, said that the Government had handled it badly.

In some ways the Taoiseach is making great progress. I compliment him on his visit to China where there are outstanding opportunities for Irish companies. The opportunities there are awesome. However, at the same time, on the issue of the lack of credit for small and medium-sized companies, the Government produced the action plan on jobs. As a business person, I find paperwork and a long report ridiculous. I want the Government and its Labour Party members to walk the walk, not just write reports. They should demand a trajectory for securing money from the banks.

The Minister of State, Deputy John Perry, is an outstanding proponent for small business. He is putting in a huge effort to attend regional meetings throughout the country and to speak to companies. His heart is in the right place and he knows from where I am coming on this issue. However, businesses are finding it practically impossible to access loans or proper credit facilities to enable them to protect existing jobs and create new ones. The absence of credit is causing businesses to reduce their workforces or even close down.

The Government must take action to guarantee increased credit to struggling businesses. I am anxious to hear what the Labour Party Senators, who are due to speak later, will say in response to my comments on the lack of access to credit and why the Government has not made it available. As the Minister pointed out in his report on small business, there are almost 200,000 small businesses in Ireland supporting almost 700,000 people. A significant number of these firms employ fewer than ten people. Many trade on international markets but there is huge potential to improve their exports and to create employment.

At the beginning of March I heard the Governor of the Central Bank, Patrick Honohan, speak at a conference in the Central Bank on small and medium-sized business and I wondered why the Minister for Jobs, Enterprise and Innovation and the Minister for Finance do not listen to him. He said that Ireland was the most difficult country in the eurozone for small businesses to access credit, and that credit was not flowing as freely in Ireland as it was in other European countries. He stated, "Credit conditions for SMEs are tougher in Ireland than anywhere elsewhere in the euro area both in terms of cost and availability." He went on to point out that Irish small and medium-sized businesses were the second least successful, after those in Greece, in obtaining credit, according to an EU survey on access to finance in the euro area. At that conference, the Central Bank found that credit conditions were substantially less favourable for Irish companies. The conference examined factors such as likelihood to be rejected for a loan, the size of loans, the level of collateral required to secure them and the commission, fees and interest rate charged. All of these were substantially less favourable in Ireland than in the average euro area.

On 12 March, ISME reported that 91% of companies had stated that banks were making it more difficult to access finance. Some 92% of SMEs say the Government is making no difference or is having a negative effect on lending to small and medium enterprises. ISME's chief executive, Mr. Mark Fielding, said: "We must put an end to the fiction that bailed out Irish banks are functioning properly ... access to credit is abysmal, the application process is getting longer and businesses are not being told their rights." Senator Landy drew attention to the representative of ISME in the Visitors Gallery. I do not know why the Senator is not mortified and embarrassed. Mr. Fielding continued his comments by saying "the banks are simply the living dead. They restrict credit lines, delay decisions, miss deadlines and generally hinder progress."

On many occasions in this House, I have told the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, that there is a crisis in the economy. On the one hand, we know that demand is falling because consumers are not spending, while those who have money are saving it. The retail sector is flat but we need to keep small and medium enterprises going. I find it amazing that the Government side is so blasé about it. I am constantly amazed that Government party Senators are not putting pressure on the Minister for Jobs, Enterprise and Innovation and the Minister for Finance in this regard. I look forward to hearing what the Minister of State will have to say about this.

How many times have we heard the micro-finance and loan guarantee schemes being announced? They were in the Fine Gael manifesto. I understand why Labour Party Members want to get their credentials right and say they are for business. I never thought they were anything else. They do not have to prove that to me. In government, however, they are not putting pressure on the Minister for Finance and the Minister for Jobs, Enterprise and Innovation to get credit made available. They should stop listening to the banks and listen to businesses instead.

I second the amendment. I thank the Labour Party for instigating the debate, which is very useful. I also thank Senator White because she knows more than most people about the challenges facing small businesses. I wish to address a number of issues in this debate and I hope that, if they are not within the Minister of State's remit, he will refer them on. The Labour Party motion mentions the provision of greater levels of social protection, including protection in the event of illness for those who are self-employed and whose business fails, leading to a collapse in income. I, for one, do not wish to harp on about business failures but it is a reality that many people face because every week there are more of them. While we do not want to emphasise failure and wish to celebrate success, we also want to recognise the reality.

A number of years ago, when the boom turned to bust, many people were badly caught out. This was because they had high incomes on paper in 2007 or 2008 as tradesmen, including block layers or plasterers, and then sought the dole when they had no other income. Social welfare officials examined the previous year's accounts which showed that they were doing really well and thus failed a means test.

At the time, the former Minister, Deputy Ó Cuív — for whom Senator White has great time, as do I — straightened out procedures in the Department of Social Protection concerning the self-employed. He acknowledged that it was quite a complicated process to analyse the sort of accounts that would be presented to social welfare officers by self-employed people, particularly if they had bought an investment property that went wrong. A system was put in place, however, whereby social welfare officials were to look at the accounts and the position that pertained at the time of the application. Some progress was made in that regard.

In recent weeks, however, I have met self-employed people in my clinics who are now out of work. They are effectively being torpedoed by community welfare officers and social welfare officers who say their income is too high to qualify for the dole. They are seeking last year's accounts and other material that is not relevant to those people's current situation. I understood the situation to have been addressed by Deputy Ó Cuív when he was a Minister. At the time, I noticed improvements in it. The former Minister produced a complicated document on the complex process of examining these accounts.

Has there been a policy change in the Department of Social Protection on this matter? Has the Department changed the procedures to slow down applications or prevent people from getting money? That is my strong suspicion. I know it is happening with regard to the carer's allowance and the disability allowance. There is a deliberate slow-down and, in fact, a departmental official told me that. Is the same happening with respect to self-employed people? Are they slowing down applications to stop money being paid out where it should be paid?

I know of one case in my constituency of a self-employed person who is now unemployed and, due to his financial problems and the difficulties he is having with the Department of Social Protection, it is leading to mental stress and illness. Senator White is an expert in that area and I am sure she has seen it in this context many times. The problem is not just that the mental illness is devastating for him and his family but also that it is preventing him from resuming business activities because he is mentally unable to do so. In addition, no financial support is being offered for the basic, daily human essentials that social welfare is supposed to provide.

Is there any way in which the procedures applying to the self-employed can be simplified, while acknowledging that the situation may be complex? I know social welfare officers are under severe pressure but they should be trained to deal with self-employed applicants. It should be recognised that when a person closes down their shop, they are not likely to have much of an income. They may have had an income one or two months ago, but if the shop is gone, the likelihood is that there is no income. They are not hiding some secret source of income from selling cigarettes around the back of the house. That is not happening.

A change of attitude is required in the Department to treat such people more fairly. It would give them some basic assistance which one would hope would keep them from the onset of mental illness. They may then begin to think of resuming in business, creating employment and furthering the economy. I wanted to raise that point while accepting we should also be looking at success and encouraging people in this regard. Nonetheless the plight of self-employed people who no longer have work is a reality I have increasingly encountered in my clinics in recent months. I am surprised because I thought such attitudes had been eliminated from departmental thinking.

The Minister of State is welcome to the House. I agree with Senator Byrne because I have many friends in that scenario. He is right to say the situation has improved but it should not regress to where it was.

It would be wrong of me not to reply to Senator White, for whom I have the greatest respect. The business model that was applied here from 1997 to 2010 certainly did not leave much money in the country or in the banks. It is very difficult trying to sort that all out.

I have been self-employed for 26 years, have been at the coalface and know exactly what it is like. Nobody can lecture me on what it is like in the small business sector because many of my friends and colleagues have been in the same situation.

I am glad to have the opportunity to speak on this important matter, the role small businesses can play in our economic recovery. The ability of small businesses to succeed and grow will underpin our potential for job creation and prosperity, particularly as they are embedded in local communities. The Government's recent action plan for jobs and the comprehensive report entitled, The Rise of Small Business, published this year by the Minister, outline the Government's commitment to ensuring the SME sector is supported and allowed to develop in order that it would realise its full potential.

In excess of 200,000 small businesses employ an estimated 650,000 people. Small businesses have always been the backbone of our communities and I welcome the spotlight that has been shone on them by the Government's programme, starting with the appointment of the Minister of State, Deputy John Perry.

Those involved in the small business sector are willing to take risks and commit themselves. They are willing to put in their own funds, take on a lease and seek bank funding. They also recognise that there will be local authority charges in the form of rates and water services. They know there are certain costs associated with taking on one or more employees, but they take the risk. It is because they want to make money but also because they want to play their part in providing services and employment in their own villages, towns and cities.

We have all spoken to small business owners who talk of the job that runs for 24 hours a day, seven days a week. That is because they take the job home with them. In the current economic climate the focus is on encouraging people to become entrepreneurs by starting their own businesses or supporting existing small businesses. This Government has given them a voice.

I agree with Senator Mary White on the need for credit. A number of elements are covered in the motion and I will address some of them, particularly the need to access credit and finance facilities for small businesses which continues to be a major obstacle for existing businesses and those who want to start their own business. It is welcome that Mr. John Trethowan who is fronting the Credit Review Office is on the board responsible for the action plan for small business established by the Minister of State, Deputy John Perry. It is important that he hear at first hand about the difficulties people involved in business are experiencing in negotiating funding from their bank. The Credit Review Office was established to provide an effective review process with an independent opinion if and when credit applications are refused by banks. The review process will review banks' decisions to review, reduce or withdraw credit facilities. The process is initiated by the borrower and it is important to note that there is no other authorised channel where anyone can intervene with a bank and in its relationship with its client. I see from the latest review from Mr. Trethowan's office, published last month, that in 54% of cases in which the Credit Review Office adjudicated on a decision of a bank not to lend or to withdraw credit, the bank's decision was reversed; therefore, there is a positive outcome. The services of the office are available to customers and it is certainly putting itself out there and making its services known. It is important to note that the two pillar banks are also obliged to inform customers about the services of the office.

I acknowledge that not all small businesses are viable and that not all credit applications can be met. All requests need to viewed against a backdrop of the economic feasibility of a particular business. However, it is encouraging to read in Mr. Trethowan's report that he is determined to ensure a business with potential gains access to credit. He has consistently pointed out that overly rigid lending policies continue to be a source of concern for him and this continues to be the case, according to the latest review. We all agree with this. I certainly agree with Senator Mary White in this regard.

In its recent action plan for jobs the Government committed to developing a temporary targeted partial credit guarantee scheme and a micro-finance fund which would have a positive impact on small business. The partial credit guarantee scheme will place Irish small and medium enterprises on a competitive footing, relative to their international competitors who often have the opportunity to avail of loan guarantees in their own countries. I look forward to publication of the legislation surrounding the partial credit guarantee scheme which is being designed.

I note in the action plan for jobs that the partial credit guarantee scheme will be reviewed at the end of the year. This is important, because often such schemes are established and set out without ensuring a follow-up to see how they are operating. In a recent submission to the Joint Committee on Jobs, Social Protection and Education, Enterprise Ireland spoke about the support it was providing for SMEs. It was heartening to hear its officials speak about the work they were doing with the banks. Staff of Enterprise Ireland have been seconded to the banks to inform credit decisions in the modern sectors and markets because we hear, anecdotally and factually, that the banks do not have the necessary expertise, as they focused their energies in the past ten years on making profit from property, which is no longer sustainable. These staff can inform those who are lending to businesses such as those involved in food technology, medi-services, green technology and many more about the value of these businesses and how they can operate in European and international markets.

The motion also notes the need to address the high level of rates payable to local authorities. Anyone who has ever been a member of a local authority knows the valuable role of commercial rates in balancing the budgets of local authorities. However, it is important that local representatives and managers of authorities are aware of the difficulties small businesses face. There is a point beyond which a small business cannot operate. I was pleased to note that the action plan for jobs stressed the need for local authorities to exercise restraint in this regard. A commitment was given to accelerate the programme for the re-evaluation of commercial premises. I have come across a couple of such cases. This would provide a basis to adjust the burden of commercial rates in many local authorities. Local authorities are always encouraged to exercise restraint in setting the level of commercial rates. I look forward to the contribution that will be made to local authorities by the household charge and from the, soon to be introduced, property tax. No one is happy about paying the charge, but income will be gathered and delivered to spend on local facilities and services, which must be welcomed. The charge has been particularly welcomed by Chambers Ireland which represents small businesses, as it recognises the need to ensure the financial burden is shared in communities.

The plan also mentions the need to ensure local authorities consider the impact of development contributions on small business and competitiveness in general. This is something I brought to the attention of previous Ministers. Development charges set at the height of the boom are no longer viable for many small developments. In many cases, the high levels set have discouraged businesses from proceeding with extensions or similar works.

Local businesses also welcome investment in the development of water services throughout the country and the proposed establishment of the national water authority. This will lead to greater transparency. For too long, businesses have suspected that they have been sharing the cost of domestic water services and moves to assist them, whereby one will pay for water on the basis of usage, will be more accountable. The Minister for the Environment, Community and Local Government has stated all houses will have a certain generous amount of water for which they will not be charged.

The issue of procurement and the facility of SMEs competing for procurement has always been to the forefront of small business associations and the people they represent in their communities. The Government has given a commitment to work to ensure small businesses are assisted. Advisers and mentors with specific public sector knowledge will advise and help firms to win more sales and procure contracts. Enterprise Ireland and the local authorities will highlight the opportunities for businesses and local SMEs and ensure more local businesses and SMEs register on the eTenders website to enable opportunities to be created for them.

I travelled the hills in February 2011 with a Fine Gael colleague, as we canvassed in the general election. He remarked, "There is a lot of negativity in Fine Gael." There is negativity everywhere, but we might just get it right as a Government. I firmly believe we will.

Before I call Senator Trevor Ó Clochartaigh, I must point out that the Sinn Féin amendment cannot be moved until the Fianna Fáil amendment has been voted on. Only one amendment can be before the House at any one time. Speakers may, of course, refer to the Sinn Féin amendment during the debate.

Thuigeamar sin agus coinnímid an ceart an leasú a mholadh níos déanaí, más mian linn sin a dhéanamh.

Cuirim fáilte roimh an Aire Stáit agus roimh an díospóireacht seo. Tá sé thar a bheith tábhachtach. Bímid ag caint go rialta faoi chúrsaí gnoithe, faoi dhaoine a chur i mbun oibre arís agus faoi tacú a tabhairt do chomhlachtaí beaga. Go ginearálta, tacaímid le cuid mhaith atáá rá ag Seanadóiríón Lucht Oibre. Tá cuid mhaith moltaí an-dearfach ins an méid atá siad a rá. Tacaímid leo ach beidh roinnt pointí le déanamh againn.

I welcome the holding of this debate. It is indisputable that the potential of small businesses must be exploited to the full if Ireland is to develop a sustainable and robust economy. We note that there are very good ideas in the Labour Party Senators' motion which we fully support. It would remiss of me, however, not to point out that while motions such as this are positive, if overall Government policy is focused on contracting the economy, we cannot expect small businesses to overcome it. If we are serious about giving small businesses a boost, we must come forward with a genuine plan to provide an economic stimulus. Austerity is not working for young people who are unemployed in record numbers and it is not working for small businesses. Sadly, I see nothing in the motion as it stands that reflects that reality.

The most glaring omission from the motion which is rectified by the Sinn Féin amendment is a call for the Government to reverse the VAT hike. I know the increase is being felt most acutely in Border areas, but small businesses everywhere are feeling the pain of this ill-thought out rise. Only last week the new figures released showed a contraction of the domestic economy. The Government must reverse the VAT hike to give small businesses and the domestic economy a chance. Senator Tony Mulcahy cited statements from Chambers Ireland. That body released another statement today stating, "The effect of the rise in VAT is now clear for all to see, with retail sales declining for the last two months following on from a rise in December 2011". Chambers Ireland urges the Government to think about the consequences the rise in VAT to 23% is having for consumer confidence and the struggling retail sector.

The Labour Party Senators correctly raise the issue of rates, but I am disappointed by the language used. "Addressing high rates" is easily said, but what does it mean? Sinn Féin is proposing a move towards a progressive rates system. Larger, typically non-indigenous, retailers can afford to carry a larger burden of the total amount collected in rates. This would allow some breathing space for smaller, usually indigenous, businesses and reverse the trend of small businesses and local shops closing down, particularly in rural areas.

In their pre-election manifestos the Government parties promised to address the issue of upward-only rent reviews, but this has not happened. This practice must be tackled, as it is stifling business and development. It is preventing people from developing small businesses, but it is not mentioned in the Labour Party motion.

The issue of credit is mentioned, rightly so. What is not mentioned, however, is that the banks are now, to a large degree, in State ownership. The Government should be using that leverage to compel them to begin lending to small businesses again. The Government also has in its power the expedition of the promised partial loan credit guarantee scheme and micro-enterprise credit scheme. These are practical steps which would bring immediate practical benefits to small enterprises.

It has also been brought to my attention that the Central Bank is putting in place a deleveraging scheme with the banks which is putting pressure on them and not allowing them to lend to smaller enterprises. It is stifling the banks' ability to do that. The Minister for Finance could examine the way the Central Bank deleveraging scheme is having a detrimental effect in the short term. The other side of the coin is the fact that the banks do not have a problem overpaying their chief executive officers and other high ranking staff in the banks. The €300,000 paid to one executive in the Bank of Ireland would give a good kick-start if divided up between ten small businesses, not to mention the other perks such as health club membership and other benefits that are still being paid for with the support of taxpayers' money being put into the banks. The issue of dealing with late payments is also a crucial one. Small businesses need certainty on when they can expect to get paid. The public sector and, critically, NAMA, must shape up. A strict regime of prompt payment should be brought into being.

The Government should also seek to ensure that being self-employed does not mean being left without a safety net if things go wrong. This should include allowing them to avail of social welfare benefits. The current system doubly punishes the self-employed in difficult times. The system must be changed to allow self-employed people to invest and work with the knowledge that the social welfare net is available to them if the worst comes to the worst.

We have seen an increase in exports but it must be noted that it is mainly driven by the multinationals. If we are to grow the economy we must focus on small and medium enterprises, SMEs, to ensure they are able to export. One of the factors that is stymieing them that we have discussed on a number of occasions is the cost of fuel. The Minister for Finance has not addressed the fact that the cost of a litre of petrol and diesel has increased so much in recent months. We had an opportunity to change that last week but when the Minister was in the House I did not see any Fine Gael or Labour Party Senators jumping up and down and saying that needed to be done. However, it does need to be done.

We have also seen tens of millions of euro squandered by the Government. Money was available from the European Union to retrain workers let off by Dell, Waterford Crystal and people in the construction industry but it was handed back without being used. That is absolutely disgraceful. We must get people retrained in order that they can find gainful employment.

In its pre-election manifesto the Labour Party promised a strategic investment bank. Where is it? The local and community development programme, LCDP, used to provide services to people, in particular individuals who wanted to set up their own business. We have seen severe cuts in these areas, for example, of up to 35% in the community and voluntary sector, and the LCDP is one of those programmes. It is stifling the supports that were available to people on the ground who would set up small and medium enterprises. We also heard of a plan to subsume county enterprise boards. I consider that a retrograde step. It will not help people who want to set up small and medium enterprises around the country.

In the Gaeltacht areas we have seen cuts to the capital grants of Údarás na Gaeltachta. That has meant that in Gaeltacht areas it has been impossible to keep the level of employment as it has been in previous years. The cut must be reversed in order that jobs can be created in the future.

One of the main problems faced by small and medium enterprises is being hounded by Revenue. That must be said because in previous years Revenue might have been able to show a certain amount of leniency but it is lethal in the way it is now following up cases and making sure that people have paid up by the deadline which gives people big problems from a cash-flow perspective.

Two groups were left out of the JobBridge programme, namely, single parents and people with a disability. There is a discrimination against them. I am aware of single parents in particular who want to set up their own business but were not able to avail of JobBridge in order to do that.

As we have consistently done, we welcome the positive ideas and we have provided some of our own. My colleague, Senator Cullinane, will further outline the Sinn Féin position. Go ginearálta, ba mhaith liom fáilte a chur roimh na moltaí atá déanta. Is mian linn cur leo. Is é sin an fáth go bhfuil leasú curtha chun cinn againn.

I welcome the Minister and all our guests in the Visitors Gallery. In line with what Senator Landy said about Labour Party Senators being involved in business, as I was born and bred in a small retail shop in a rural area — my parents are still running it — I know a little about small business. I do not claim to know everything but I have opinions on certain issues relating to business.

I will speak on three aspects of the motion. The first relates to opening up the rules on tendering and procurement to enable a wide range of firms and businesses to seek public contracts. This is an important issue. Under EU law we are making it easy for foreign companies to come to this country and get big contracts. We do not seem to be able to compete with them, in particular on major road projects. One could ask what is the material gain for us in doing that. There is no material gain.

"Identifying Opportunities for Sustainable Public Procurement", is a document that was produced by ClientEarth. It outlines the importance of ensuring sustainability criteria to achieve the most economically advantageous tender. It suggests that in any tender process it should not be just about the cheapest price. For road projects the Spaniards and Turks will offer the cheapest price and they will have their own money but in such a tendering process one must also build in whether there is a locally based company, if the company is a rate payer, and how many people are employed locally. If and when a local person gets a contract he or she will employ people and take them off the dole. They will be paying taxes in this country and there will be an economic advantage. That must be built into any future tendering processes for major works.

The second part of the motion refers to the provision of greater levels of social protection, including protection in the event of illness, for those who are self-employed and, in particular, for those whose businesses fail, leading to a collapse in income. I am a long-time campaigner for the self-employed who have no rights in the event of their becoming sick or unemployed. When I ran for the Seanad election it was the No. 1 item on my campaign card. When I ran in the previous election the same was the case. As I have worked in that field for 28 years, I can understand the problems such people have. Following consultation between Labour Party Senators and the Minister for Social Protection, Deputy Joan Burton, we hope to find a resolution to the matter as soon as possible by means of a voluntary contribution that will entitle the self-employed to get disability benefit in the event of illness rather than the current means-tested payment for which they would probably not qualify.

I wish to refer to the recommendations of the advisory group on small businesses on commercial rates. The group said that although rates are generally a relatively small proportion of business costs for many businesses, they can be particularly burdensome for some enterprises. That is the truth. I have called on numerous occasions in this House for a national review of commercial rates. Some time ago a pilot scheme was carried out in three local authority areas in Dublin. The outcome was a 35% reduction in rates for those local authority areas. The Valuation Office says because it only has 12 or 14 staff it does not have the resources to address the issue but there is talk of outsourcing valuations. That should be considered in order that the matter will be dealt with soon.

Ridiculous situations arise across the country. I am from County Roscommon. Monksland is a large area in the county on the River Shannon adjacent to Athlone. The rate per square foot in the thriving town of Athlone is €52.27 and the rate in Monksland across the River Shannon is €74.34. There is a difference of €22. Why would anyone consider setting up a business in Monksland with such a rate? This is not something local authorities can deal with as they can reduce their rates by 1% or 2% if they can find savings for the benefit of small businesses but they cannot find savings of 22% or up to 35%. The solution must be found at Government level by putting a national review in place. The advisory group on small business also said that potential savings of €511 million could be found through local government efficiencies. I ask the Minister of State from where those efficiencies are to come and whether they will be passed on to the ratepayers, because it is vital that they are. The Minister of State, Deputy Perry, and I have spoken about rates and are agreed on one matter, that we should possibly consider a two-tier rates system — one for the blue-chip companies and one for smaller businesses. As I have stated repeatedly, I cannot see the logic in a small business, which employs one or two persons and has a rates bill of €4,000 or €5,000 that it simply cannot pay, closing and putting the two employees on the dole at a cost of €42,000. There is no logic at all in that. There must be a better way. If the local authority were to forgo the rates, there would still be a saving of €38,000 to the taxpayer.

I have always stated, as I did a year and a half ago in Roscommon when Mr. Mark Fielding was present, that we should also look at the social welfare budget to create jobs rather than keep claimants at home. If, as I stated, it costs €21,000 a year to keep a person on the dole and we wanted to create 100,000 jobs by offering €10,000 of that €21,000 to an employer to employ somebody, we would saving €1.1 billion per year and create 100,000 jobs from which employees would pay tax, charges, etc.

On tourism and the hotel sector, many hotels are struggling. There was one in my home town of Ballaghadereen employing 40, but as I told the Minister of State previously, it had a rates bill of €40,000 a year and a water rates bill of €30,000. It was not able to pay that, as a result of which it closed and 40 people went on the dole at a cost to the taxpayer of €840,000. Why is there not an agency to deal with this to save money? If that rates bill could have been forgone, we would still save €750,000 to the taxpayer.

NAMA is concentrating far too much on the UK market, and I have said as much in the House previously. From speaking to auctioneers and estate agents, I am aware that they have been in contact with NAMA to buy properties at a modest price for those who are willing to set up in business and NAMA is dragging its heels on this. Many months later, NAMA has not signed on the dotted line. There are people waiting to set up business and we are not doing anything about it as a Government.

I agree with Senator Byrne regarding the self-employed, but it was Fianna Fáil that put the self-employed on the dole. When that party had an opportunity in recent years, it never looked after them once. Now the Senator is blaming us for the mess his party created.

I am not. I am saying that what the former Minister, Deputy Ó Cuív, brought in does not seem to be in effect.

From 1997 to 2008 the workforce increased from a little under 1 million to 2.2 million. I presume that happened by some act of God that had nothing whatsoever to do with Fianna Fáil. There are still 1.8 million employed despite, or in spite of, all the difficulties facing those who are unemployed. Even the loss of one job creates its own distress, both for the individual and also for his or her family. Not only that, it also trickles down into the local community.

My friend and colleague, Senator White has been consistent in her criticism of what she believes to be the lack of credit being made available to SMEs. A rather interesting exchange took place about two weeks ago in this House. As a member of the British-Irish Parliamentary Assembly, the economic affairs sub-committee met both ISME's Mr. Mark Fielding and the representative of the Small Firms Association which, I believe, is attached to IBEC. As I said to Senator White following the meeting, we came away more confused than informed. Mr. Fielding, for whom I have the highest regard, was able to cite specific examples of firms which were in extreme difficulty and were not only failing to get credit but also having their overdraft facilities converted into term loans, yet the Small Firms' Association stated that all the Government targets on bank lending had been met. The Minister, Deputy Bruton, was in the House and he also made the same statement, which was challenged by Senator White because of anecdotal evidence. Perhaps the Minister of State, Deputy Perry, who I trust will forgive me my bad manners in that I should have welcomed him to the House at the outset of my contribution, might have a view on that. He has hit the ground running and is doing the best job he can in difficult circumstances. I wish him continued success in that regard.

There seems to be some confusion. There is evidence being cited that small firms are not getting credit and, on the other hand, there is what is being said by everybody else, including the Small Firms Association, whose bona fides I will not question but which sits on a Government-sponsored task force and which maybe has gone a bit native in terms of parroting the Government line. I do not doubt for one minute that the figures being supplied by the banks to the Government are in any way to be impugned. It is the manner in which these figures are collated.

It was pointed out that it was probably more cost-effective for a small firm to go onto a term loan than to continue with an overdraft, but surely the Minister of State, Deputy Perry, who himself comes from a small business background, would appreciate that all businesses need some form of cashflow to survive, particularly as the seasonal nature of a number of firms requires that they need it at certain times of the year, and that seems to have been closed off to them.

The motion refers to "opening up the rules on tender and procurement again to enable a wider range of firms and businesses to seek public contracts", with which we would all agree. There was a reaction when the Minister of State, Deputy Brian Hayes, first referred to the possibility of centralising public procurement contracts. Referring, for example, to stationery and other basic elements of small and medium-sized business, but as it applied to local authorities, he said it might be more cost-effective to have a more centralised form of procurement. The point was made at the time that if the Government were to go down that road, laudable and all as it may seem in theory, the reality is that small local businesses would not benefit. For example, where a local authority gives preferment to small local businesses for a wide variety of services it provides, there would be a danger if it were to be centralised to the point referred to by the Minister of State, Deputy Brian Hayes, that local businesses would suffer and jobs would be lost. The Minister of State, Deputy Perry, might address that question of procurement. What is the sentiment in Government in this regard? Is some form of central procurement being proceeded with, notwithstanding that we all agree it should be widened to include as many firms as possible?

It goes without saying that we would all support the view that those who are self-employed should be given some form of social protection. While I accept political charges across the floor as being part and parcel of life in this House, the question relating to the protection of the self-employed did not arise during the Celtic tiger years as we were building an entrepreneurial class in this country because people were doing well. It is quite obvious, however, that within the 450,000 unemployed are those who built up businesses in good time which have gone to the wall through no fault of their own because of the economic downturn. By the way, the downturn does not apply only to this country, which we need to keep repeating. It is a European and worldwide problem following the bank crisis of 2008, which was year zero in terms of the economic downturn. If that had not happened, the history of the past four years might be a different narrative. Having said that, given that it is germane and pertinent, there should be some acknowledgement of the financial distress in which the self-employed find themselves when their businesses have gone to the wall. It is an issue now where it was not an issue previously. Even in these straitened times, I would hope there would be some way the Government might look at this area in order that it would be able to provide some financial comfort for the formerly self-employed and their families.

On the question of local authority rates, the Minister of State, Deputy Perry, and I discussed in recent years the possibility of setting up a bank similar to the Industrial Credit Corporation, ICC, which primarily existed to help small businesses. There were ideas circulating in the Department and from the Minister of State with regard to creating a risk capital financial institution or other financial outlet to underwrite venture capitalists with sound business ideas. This idea would have been borrowed from a number of countries, not least Taiwan, in which the Minister of State did excellent work as chairman of the Ireland-Taiwan Parliamentary Friendship Society during his tenure. He might have views on whether that idea is being progressed or whether there are others to provide some protection through a venture capital financial institution to underwrite those with good ideas. I am not talking about difficult projects in this context.

There is a further issue which I raised with the previous Government, although I accept it is probably a non-runner in these straitened times. There are a number of family-owned hotels, particularly in the west, that are in need of some refurbishment. Despite the excellent initiatives taken by the Government to try to improve tourist numbers, the west is suffering, as the Minister of State is aware. While tourist numbers are rising, the increase is mainly in Dublin and the west is not gaining to the extent it should, despite its excellent infrastructure. Is it possible to consider the introduction grant aid for the refurbishment of family-owned hotels to make them more competitive?

I welcome the Minister of State, Deputy John Perry, as well as the representatives of the business community in the Visitors Gallery, particularly those from Letterkenny Chamber of Commerce who have made their way here today from County Donegal. Anyone who knows anything about business in the Border area will know there are extra difficulties being encountered as a result of the sterling-euro exchange rate and the differences in VAT rates, although the difference in the exchange rate is the bigger issue, as I know from talking to people in County Donegal.

The issue of VAT has been raised in the debate. A differential of 1% or 2% in the rate of VAT will not make or break a business, given the difficulties in getting businesses up and running. Like Senator Tony Mulcahy, I have been in business for 27 years, since I was in my early 20s. The 1980s were difficult, with interest rates running at 18% or 19%, whereas they are 2% or 3% today. Nonetheless, running a business is more difficult today.

SMEs are the ones which will get the country back on its feet again. They are and have been the backbone of the economy. A small, family-run business will be the last to give up; it will fight to the very end. That is the tradition in Ireland. People who set up their own business do not do it by chance but through determination and the business is generally passed on through the generations. The small business community has kept the country going and is employing hundreds of thousands of people.

I do not have to convince the people in the Visitors Gallery of how hard they work from Monday morning through to Sunday night. Those who work a five-day week do not appreciate their jobs. When a person is self-employed, it is a seven-day week. Many spend their time complaining about the Government and the current situation, but those involved in business do not have time to do this. They come to work in the morning and might have one minute in which to complain before having to get on with their business and getting through the day.

In recent years people often budgeted on an annual basis, but because of the way the economy has gone, many businesses are now budgeting on a monthly basis, which shows how difficult is the economic environment. Anyone involved in a small business knows he or she just has to get on with it as he or she cannot depend on somebody else to look after it.

Help from the Government is needed. I served as a member of Donegal County Council for 11 years and of Letterkenny Town Council for 17 years and every year the rates issue was topical. I have always said that in County Donegal the rates base is too small and that the pressure is on the business community which is suffering more than it did in the past. The rates base has to be extended. While I am open to correction, I understand 39% of all local government funding comes from commercial rates. This cannot be sustained.

In recent months I have heard speakers with a political agenda say, "Do not pay your household tax,""Let somebody else pay it,""Europe will pay it," or "I do not want to pay it." However, a small shop employing, say, two family members and a couple of others might be paying €3,000 or €4,000 just to keep the door open. At the same time, a person living next door in a private house worth more than the business might be refusing to pay the €100 household charge. The public must realise that if the small business community continues to suffers, jobs will not be available for their children, friends and neighbours.

Like most people, I have no difficulty in paying the €100 household charge. However, the funds must be spread throughout the country, as the business community is getting smaller. I assume, when rates were formulated 150 years ago, it was necessary to have a business premises, as people did not have laptops and cars then. Today there are many who are doing well in business but who do not contribute to the community through rates because they do not have a building. We must re-evaluate the rates system.

There are other anomalies which the Minister of State might address. I have experienced the following. When a town council or county council brings forward a motion to grant a reduction in rates for new businesses, the law does not allow this to happen. The county enterprise boards, of one of which I was a member for several years, can give grants to small businesses provided they do not interfere with others conducting the same business on the same street. The county councils should be able to do the same after examining how the normal market operates. If a building is left empty, the council concerned should encourage people to take it over. In many cases, in which rates are owed on a building, the next tenant is liable for them, which is unfair. If the system was run in a businesslike way by people such as those in the Visitors Gallery, many of these businesses would be operating again. If councils gave a 50% or even a 10% reduction, these properties would be opened again and there would be activity on the street. There is nothing worse than driving through a town and seeing "To Let" signs, boarded-up windows and paintings on windows to hide the fact that a building has been closed. We should examine anomalies such as these in order that a town council could, in certain designated areas of a town, give a rates reduction to new businesses, provided they are not interfering with a similar business in the town. There are many who want to get involved in business and as has been said, there are some 400,000 unemployed. Many people just need an incentive and an extra push from the Government to get involved. When that happens, more jobs are created and the cash starts to flow.

It will be the small business community that will bring the country out of recession, as it has done in the past. I wish those involved good luck in the future and ask the Minister of State to act on my requests.

I welcome the opportunity to make a few points on small business. I also welcome my constituency colleague, the Minister of State, Deputy John Perry. We are very proud in the north west to have a local representative as the Minister of State with responsibility for small business who, as Senator Paschal Mooney said, is doing the best job he can in difficult circumstances.

I have read the motion and the amendment. It is welcome that Labour Party Senators are bringing forward a number of issues that require attention and there is little with which one can disagree in what has been said so far. I wish to raise a number of issues. As one who is involved in small business and as a representative of small business for many years in the chambers of commerce movement, I welcome the Chambers Ireland and the Confederation of Irish Industry who are here to listen to the debate. As often happens it is a shame that the important points made here will not be covered by the media as its gallery is empty while the Visitors Gallery is full. We are used to that in the House. The organisations behind us could do worse than highlight the fact that these important issues are being ignored by what is a selective media.

On the issue of commercial rates, the method of local government funding by consecutive Governments is consistently flawed. The template was simply to wait and see what comes from the local government fund, take it away from what is needed for the year, and divide it out across the business community. That was fundamentally wrong and affects the livelihoods of many, particularly in the more difficult economic times. There is a need for an ability to pay clause, where people can take a holiday from the payment of rates based on economic concerns for a period, to return in future, albeit those figures may add up. In certain circumstances down the line we could look at rates forgiveness. That is necessary given that doors are closing as a direct result of not being able to pay the rates bills which would have arrived in many counties during the past week.

There is no incentive to go into business, engage one's mind or have the entrepreneurial spirit and take that risk as we have seen throughout the economic downturn. People have mentioned the lack of social supports for those who have taken the risk, irrespective of how many they may have employed or the contribution they may have made. That is wrong and the Government must take action in that regard.

On the matter of rates and the Border counties, Senator Jimmy Harte would have mentioned a number of issues in that regard. It is not a level playing field for the Border counties. We have a different set of rules in Sligo, 35 miles away, a different minimum wage, a different VAT rate and a whole series of different regulatory parameters which is wrong. As many of our agencies insist on being the best possible Europeans they tender across the Border which is frustrating for operators on this side of the Border. There is a case to be made in this respect. I wrote a report some years ago and circulated it to councillors in the Border counties calling for a 25% or 30% rebate on commercial rates for people retailing in those areas. Obviously the sterling exchange rate was at a particular level that perhaps made the position worse than now. We have had the VAT increases. Other Senators mentioned that Chambers Ireland had pointed out that was a particular concern with the continuing softening of the retail area.

The issue of upward-only rent reviews is one of particular concern. There was much commentary on the matter by the Government parties in advance of the election but that appears to have gone off the radar given that the Attorney General is examining the issue or that it cannot be done. Today in the other House, Deputy Dara Calleary tabled the Landlord and Tenant (Business Leases Review) Bill 2012 which has been submitted for selection to the Ceann Comhairle. The Bill proposes to deal with this specific issue. As the Minister for Finance, Deputy Michael Noonan, accepted the Central Bank and Financial Services Authority of Ireland (Amendment) Bill 2011 yesterday which provides for publishing the names of financial institutions who treat customers poorly, I hope the Government will embrace the Bill with both arms and make it its own. If the Attorney General has any particular issue with it, amendments can be made on Committee Stage.

In certain parts of the country State authorities and agencies have properties leased to businesses at higher levels. In areas such as Killybegs businesses are renting from port authorities. The Minister could do worse than instruct the agencies to examine the market and albeit that a legal lease is in place at a higher rent, to voluntarily enter into a reduced rate in that regard.

The issue of procurement is a major bone of contention. I do not like us having to be the poster boys of Europe when it comes to procurement. I often use the example of the ushers who serve the Houses of the Oireachtas so well. For many years the ushers' uniforms were manufactured in Sligo by a particular master tailor who was asked if he would continue the work at the same price for a couple of years until a tender process could be arranged, and he lost the tender. So be it, the tender was based purely on price. It is ironic that the uniforms are now manufactured in Belgium and supplied by an Irish agent.

In the German Parliament one will not find a civil servant driving a vehicle other than a Volkswagon, Mercedes or a BMW. I do not think that is in their employment contract or that there are not individuals who have preferences for other models, it is not the done thing. I would like tenders broken down and a specific focus put on how we can ensure, while being good Europeans, we facilitate a process legally that supports industry in Ireland in the first instance. I do not think that deducts from our pro-European stance. We must be more clever in how we do that. In Ireland, the capital city being the key administrative centre where much of the business is done, State agencies can also focus a little more on the support of small businesses. I have said previously that I doubt if any of the legal advice supplied to any Government, State agency or local authority is from a company that is not located between the Royal and Grand canals.

I am aware of an aspect of IBRC which in wishing to procure auctioneering services — I declare an interest as I am an auctioneer — issued a tender process where only those with national distribution could apply. If one was to examine the tender and somebody in the industry was to advise on it, that tender was written for one successful applicant. We need to be much more inclusive and prepare tender documentation and a procurement process that makes it possible for an auctioneer, solicitor or accountant in Buncrana to have equal opportunity for success as KPMG, Grant Thornton Ireland or whoever in Dublin. That has not been done adequately by countless Governments or by this Government. As the Minister of State's heart is in the right place I trust he will take some of the issues on board.

I welcome the Minister of State, Deputy Perry, to the House and invite him to address the issue as briefly as possible.

I welcome the opportunity to speak to the Labour Party motion and thank the Senators who tabled it. I am conscious of all the contributions made. The small business sector is very important to the economy.

The Government is acutely aware of the importance of the small business sector and its potential for generating employment. Our challenge has been, and continues to be, where to target our best efforts and financial supports and interventions to best effect. As stated by numerous Senators, there are almost 200,000 small businesses in Ireland, employing more than 650,000 people.

The action plan for jobs and the small business sector published last November reflects many of the issues of concern to small business that I have highlighted to the Government as Minister of State with responsibility for this area. The action plan takes on board a number of recommendations from the advisory group for small business, which I established when I was appointed. Given the importance of the small business sector and the need for the €90 billion domestic economy to grow in conjunction with the exporting economy, we must ensure the action plan includes a focus on these vitally important areas. Senator Landy and others referred to the importance of the sector and the issue of access to credit, which I will deal with shortly. Senator Gilroy referred to the pension fund and diversity and those issues will have to be addressed. Senator Mary White also referred to access to funding. The Government has ring-fenced funding by the two pillar banks.

I refer to the difficulties with late payments for those contracted to provide goods and services to the public sector. Since 2009, Departments have been improving their respective payment times to assist the cash flow of businesses and they are obliged to pay their suppliers within 15 days of receipt of a valid invoice. The 15-day prompt payment rule was introduced by the Government on an administrative basis. Departments are required to report quarterly to my Department on their performance in meeting this target. To date, ten sets of quarterly returns have been published on my Department's website. The returns for the final quarter of 2011 were published on 29 February. These show that between 97% and 98% of invoices were paid within 15 days for that quarter. The ongoing publication of these composite returns by my Department provides clarity on the performance of individual Departments in meeting the terms of the Government decision.

As part of the commitments in the EU-IMF programme for Ireland, the 15-day prompt payment rule was extended beyond central Departments and rolled out to the Health Service Executive, local authorities, State agencies and all other public sector bodies, excluding commercial semi-State bodies, in respect of valid invoices received on or after 1 July 2011. These new reporting arrangements should ensure all Ministers will be able to monitor the performance of the bodies under their aegis and will enable them to address issues with bodies that are not meeting these obligations. There has been criticism in the media in the past few days of payments by State agencies. Small businesses experiencing difficulties in securing payments should, in the first instance, approach the Department or the State body concerned. Failures to comply with the initiative can also be brought to the attention of the relevant Minister with responsibility for the ongoing concern.

A number of Members referred to opening up the rules on tendering and procurement again to enable a wider range of firms and businesses to seek public contracts. Public procurement can be an important source of business for local enterprises. In general, SMEs' flexibility and ability to respond speedily to requirements can be advantageous in competing for local contracts. Within this context, the procurement guidelines from the Department of Public Expenditure and Reform require public bodies to promote participation of small and medium-sized enterprises in the award of public contracts. The guidelines set out positive measures contracting authorities must take to promote SME involvement in a manner consistent with the principles and rules of the existing public procurement regulatory regime. They also highlight practices to be avoided because they can unjustifiably hinder small businesses in competing for public contracts.

I attended an event in Kilkenny a number of weeks ago for public contract providers and suppliers. It was an open forum and it was educational for those dealing with smaller contracts. The key provisions of the guidelines are: supplies and general services contracts with an estimated value of €25,000 or more are required to be advertised on the website, etenders.gov.ie; less use of restrictive tendering procedures and greater use of open tendering; ensuring the levels set by contracting authorities for suitability criteria are justified; and subdividing larger requirements into lots where this is practical.

The National Procurement Service, NPS, is supporting SMEs through its information and guidance strategies and works closely with the relevant stakeholders. In the past two years, there has been an increasing level of activity between the NPS and potential suppliers. The NPS collaborated with InterTradeIreland, Enterprise Ireland and Invest Northern Ireland to run a number of events titled "Upping Your Game". These events were well received by suppliers with 94% saying they were well prepared.

I refer to the provision of greater levels of social protection, including protection in the event of illness, for those who are self-employed and, in particular, for those whose business fails leading to a collapse in income. Self-employed persons are liable for PRSI at the class S rate of 4%, which entitles them to access long-term benefits such as State contributory pension and the widow's, widower's or surviving civil partner's contributory pension. Regular employees who have access to the full range of social insurance benefits, including jobseeker's benefit, pay class A PRSI at the rate of 4%. In addition, their employers make a PRSI contribution of 10.75% in respect of them, resulting in the payment of a combined 14.75% rate per employee under full rate PRSI class A.

Self-employed workers may establish eligibility to assistance-based payments such as jobseeker's allowance. They can apply for the means-tested allowance if their business ceases or if they are on low income as a result of a downturn in demand for their services. In general, their means will take account of their earnings in the previous 12 months in determining their expected income for the following year and, in the current climate, account is taken of the downward trend in the economy. As in the case of a non-self-employed unemployed claimant of allowance, the means of husband or wife, civil partner or cohabitant will be taken into account in deciding on entitlement to a payment.

The Minister for Social Protection established the advisory group on tax and social welfare last year to meet the commitment in the programme for Government. The group will, inter alia, examine and report on issues involved in providing social insurance cover for self-employed persons to establish whether such cover is technically feasible and financially sustainable. In addition, the actuarial review of the Social Insurance Fund, which is due to be completed in mid-2012, will examine this matter.

Addressing high local authority rates is an important issue which was raised by numerous Senators, including Senator Kelly. The Minister for the Environment, Community and Local Government is carrying out a comprehensive review of the rates. The Commissioner of Valuation, who has sole responsibility for all valuation matters, is conducting a programme of revaluation of all commercial and industrial properties throughout the State on a county-by-county basis. The purpose of the revaluation process is to provide for more consistent and up-to-date valuations for rating purposes and to assist in providing a more equitable distribution of valuations across those liable to pay rates.

The commissioner, in consultation with the Minister for Public Expenditure and Reform, has been reviewing various options for streamlining the valuation process and speeding up the national revaluation programme. In this regard, the Government recently approved the drafting of a valuation Bill to amend the Valuation Act 2001. There will be an ongoing debate with the Minister on this issue. Having compared the figures for 2011 with those for 2010, the annual rate on valuation, ARV, decreased on average between 2011 to 2012 by 0.27%. Of the 88 local authorities, 49 have applied the same ARV as in 2010 and 36 have reduced it. Two local authorities introduced an increase and the 2010-11 figures for Dún Laoghaire-Rathdown County Council are not comparable due to a revaluation of all commercial properties by the Valuation Office. Local authorities have been requested to exercise restraint in setting their 2012 ARVs.

It is recognised that the existing revenue base of local authorities is narrow by international standards. This was a consideration in the introduction of the €200 charge on non-principal private residences in 2009. While these are difficult economic times for many businesses, Senators will appreciate that local authorities play, and must continue to play, a central role in delivering local services at local level. Local authority capital and current budgets, economic planning and development, and the provision of goods and services, as well as community infrastructure, feed into the communities that they serve. Local authorities have an important role in providing support both for the retention of existing jobs and the creation of new employment in their areas. Local authorities are being proactive in many ways in this regard. For example, business support units in each county and city council are providing a focal point for business and enterprise to engage with the local government system and smooth their path in setting up and managing businesses.

The Government will continue to impress on local authorities the need to continue measures to enhance efficiency with a view to minimising rates and charges for business. The Minister recognises many businesses are facing difficult economic times and will continue to keep all matters relating to rates under regular consideration in his Department.

The motion calls for, among other things, measures to allow company directors to invest money from private pension funds in businesses. The regulatory and tax regime governing the activities of supplementary pension provisions are designed to protect and encourage individuals' savings and benefits in order that they will have an adequate income on retirement. This point is fundamental to the understanding of the Government's position on the recommendation made. It might be expected that the trust deed to establish a pension scheme would normally set out the details of the power of trustees in the investment of the scheme's funds. General pension legislation does not specifically prohibit it. For this reason, the Minister for Finance has indicated he does not foresee changes being made to tax legislation which would facilitate proprietary directors to invest their pension scheme assets in sponsoring employer companies.

Ensuring increased access to credit and finance facilities for small businesses was mentioned by a number of Senators and is by far the most talked about issue in recent times. Irish small businesses are faced with the unavailability of adequate credit facilities. The initiatives taken by the Government to restructure and recapitalise the banking system are the principal response in seeking to make credit available. The aim is to restore the lifeblood of the market economy, that is, funding for lending and borrowing to help fuel business investments, run factories, buy machinery and equipment and pay wages. Generally, large firms in good financial conditions can obtain credit more easily and on favourable terms. In contrast, bank-dependent smaller firms have faced significantly greater problems in obtaining credit.

The Government has engaged in significant efforts to improve the credit environment for small businesses. It has imposed lending targets on the two domestic banks for three calendar years. They were required to sanction the lending of €3 billion in 2011, €3.5 billion this year and €4 billion next year. The Minister for Finance recently confirmed both banks had achieved their 2011 targets. The information is being independently assessed by the Credit Review Office. The Secretary General of the Department of Finance, Mr. John Moran, has embarked on a series of meetings. I met businesspeople in Limerick on Monday at a public meeting. There was a series of meetings and Mr. Moran will compile a full report. The Mazars report was also debated at public meetings.

It should be stressed, however, that the targets for the approval of credit have not been imposed for drawdowns and the Minister has no plans to introduce such targets. We are meeting and engaging with the banks on the issue of drawdowns, the ultimate test of any business. The fundamental point is that €7 billion has been ring-fenced for small businesses. A lot of companies which were viable are no longer so. There has been a shift from the management of businesses based on property to cash flow management. Many businesses have to meet different criteria in getting funding from banks. Many factors affect whether funding is drawn down such as changes in market conditions or company restructuring. In the recent Mazars survey of SME lending conducted on behalf of the Department of Finance the most frequently cited reason for not availing of approved credit was that it was not needed at the time. A lot of micro companies are not going to banks, as we have found at the meetings I have attended. Companies are not engaging with banks. Every second loan refusal appealed to the office of Mr. John Trethowan has been overturned. The code of conduct of banking has been examined and banks are obliged to give a lending report to the Credit Review Office within 15 days. It is important, therefore, that people engage with the banks.

My Department is taking action to address some specific market failures which will add value to the actions the Minister for Finance has taken. We will shortly introduce a temporary partial credit guarantee scheme which will be closely targeted at commercially viable, well performing companies which have solid business plans and defined markets for their products or services, thereby demonstrating their ability to repay loans. The scheme will support new companies, safeguard jobs and create new ones. As I have stated, Enterprise Ireland companies will have the highest level of exports ever this year.

The two pillar banks have now dedicated bank officials reassessing loans. The real crisis is in the micro-domestic economy. Banks need SMEs to make money and SMEs need the banks. It is in the interests of the two pillar banks to invest in profitable companies which will repay the money. The Taoiseach is determined to ensure the banks fulfil their obligations. They have been recapitalised and it is our job to make sure they meet their obligations. If Senators are aware of cases in which viable applications have been refused and if they bring them to my attention, they can be investigated.

Primary legislation to underpin the scheme is being progressed with the Office of the Attorney General with a view to its publishing in the coming weeks. The scheme is intended to address two distinct barriers to lending, namely, inadequacy of collateral and inadequacy of understanding the novelty of a business model. It will be targeted exclusively at companies which are unable to access credit.

Another priority for my Department and one that has a significant entrepreneurial focus is the introduction of a microfinance fund. If we are to maintain the strong Irish culture of entrepreneurship, we need to ensure Government supports are in place to empower people to strike out on their own and shape their own future. We acknowledge the difficulties which can be experienced by micro-enterprises in gaining access to finance at an early stage of business development.

There are many very good commercial ideas in third level colleges. To remove the barrier, work is under way in my Department on the establishment of a microfinance fund to provide loans of up to €25,000 for micro-enterprises employing up to ten persons. It is envisaged that the microfinance fund will go live in the third quarter.

Small businesses are not just a vital part of the economy, they play a critical role. Senators Denis Landy, John Gilroy, Mary White, Thomas Byrne and Tony Mulcahy referred to credit facilities. There is a common theme in all of the issues raised. Senator Trevor Ó Clochartaigh referred to rates reductions and rent reviews. The Bill tabled by Deputy Dara Calleary will be studied. Senator John Kelly referred to the issues of rates and procurement. I am sure the Minister for the Environment, Community and Local Government will consider the issues raised.

Senator Paschal Mooney referred to a lack of credit facilities for SMEs. Running a business is not just about credit, it is also about having the management tools required within companies. While credit availability is one aspect, business survival is not based solely on a bank extending an overdraft facility. Management expertise is required, as the marketplace has changed fundamentally. However, bank lending is an issue we are determined to address.

I encourage Senators to attend the meetings on public procurement held across the country. I welcome those present in the Visitors Gallery. The Small Firms Association, ISME and Chambers Ireland have all played a critical role on behalf of their members. I take Senator Harte's point in regard to local authority policy in terms of encouraging vacant units to be occupied by business. That should certainly be examined as part of each authority's management review. Councils have a level of discretion which allows them to facilitate a certain degree of derogation.

Senator MacSharry's suggestion regarding a rates holiday is a good one, as is the proposal regarding rent reviews. Of course, the opinion offered by the Attorney General's office must be taken into account. There is plenty of evidence that rents are coming down throughout the State. The bottom line is that any landlord faced with a choice between half rent or no rent will opt for the latter. These people are intelligent enough to recognise reality. We have 13,000 sq. ft. of retail space per customer in the State compared with 1,000 sq. ft. per customer in the United Kingdom. The buoyancy in the commercial rental sector in the boom years led to a situation where every town in the country is home to massive rental units whose capacity is way beyond what was ever needed. However, common sense is generally prevailing, with landlords opting for reduced rent in lieu of no rent.

On the procurement issue, I strongly encourage Senators to meet the management of the National Procurement Service. The impressive team has embarked on meetings throughout the State and has certainly changed the service's remit.

As Minister of State with responsibility for small business I will continue to ensure we have a supportive business environment in this country. I thank the Labour Party Senators for raising this important motion. As the saying goes, "No problem, no business". There are problems in every business and these are challenging times. I do not claim to have a panacea for all of the current difficulties. It is about safeguarding the viability of small business. Success is the new survival.

Survival is the new success.

It is about helping those who can, with the right support, survive and ultimately thrive. The Government is absolutely focused in this regard.

The key proposals outlined in the action plan for jobs underpin this supportive business environment. As such, I hope all Members will accept and support them. I am anxious to work with Senators and take on board their views. The Government has been very open and frank with the business community. Our concern is to empower business people, and we recognise that small businesses are the backbone of the economy. Part of that empowerment is reducing the regulatory burden on companies. The "think small first" principle is very important in this regard. Access to credit is another priority for the Government. In addition, we must ensure that people who have failed in business get a second chance. Honest entrepreneurs are entitled to that and we will ensure every possible support is available to them. Above all, the banks must fulfil their obligations. Instead of restructuring existing loans, they must offer new lending to new companies with new ideas.

I propose to share time with Senator Lorraine Higgins.

Several issues were raised which apparently attract a cross-party consensus. The first is the need for safety nets for self-employed people in the form of an entitlement to social welfare benefits. As Senator Mooney observed, we all accept that something must be done in this regard. The point, of course, is that nothing has been done thus far. Given the cross-party support expressed in this House, perhaps there is an opportunity for an all-party motion on the matter. It is no longer acceptable that people whose businesses do not work out are left with no support from the State.

The second issue is procurement, which we all accept must be opened up. It is not enough merely to have this discussion, from which many good ideas have emerged. The Government must take action now.

Access to credit is the third issue in respect of which we have seen a cross-party consensus that something must be done. The Minister of State is correct that access to credit is not the be all and end all for businesses, but it is certainly important. If a business is to grow and develop, funding is required. The deleveraging of the banks has had an impact in the form of, for example, curtailment of overdrafts for businesses and the inability of enterprises to borrow. We have gone from one extreme in the Celtic tiger years, when there was reckless lending on a massive scale, to the opposite situation now where there is precious little lending just when we need it most. The Government must address this issue without delay.

On the question of rates, Senator Harte made an important point in regard to businesses which do not operate from a building and do not make any contribution. These are the types of issues that must be examined.

I welcome the Minister of State and the members of the business community who are in the Chamber for this debate on the proposed introduction of supports for small businesses and the self-employed. I thank the Minister of State for his responses to the issues raised by colleagues. I intend to refer to some of the specific challenges facing the business community.

Prior to my nomination to the Seanad I was self-employed all of my life, as are all members of my family. As such, I am very familiar with the particular challenges facing the many business people who are striving hard to keep their boats afloat. I have experienced some of those difficulties at first hand. In particular, I highlight the utterly disincentivising situation in Ireland. Now, more than ever, we need people with an entrepreneurial spark and verve to feel secure in following their business dream. To that end, the current situation whereby one is prejudiced in terms of acquiring social protection following the collapse of a business must come to an end. How can we realistically encourage people to develop a business idea and seek out funding for that purpose if there is no safety net should things go wrong? Not only is this policy misguided, it is unacceptable in that it is utterly prejudicial to those concerned. I urge the Minister of State to liaise with the Minister for Social Protection in order to address this unfortunate anomaly in Irish law in order that entrepreneurs in this state can set about creating jobs without fear of confronting a uniquely Irish problem should their business plans go awry.

I urge the Minister of State to prioritise the implementation of the European prompt payments directive which will inevitably be transposed into Irish law in the coming years. This directive would give many businesses the legislative framework and protection required in order that Ireland can shift decisively to a culture of prompt payment. It will seek to reverse the trend of late payment by penalising debtors who delay via the introduction of interest charges and fixed penalties for those who fail to comply without further notice. The directive must not be limited in terms of application. It must apply to all businesses, including State bodies and multinationals that are in receipt of State supports. With 1,900 corporate entities being wound up in the State last year — this does not take into consideration partnerships and sole traders — this legislation is essential in encouraging greater confidence among business people and in affording protection to badly stung creditors who are operating in a very difficult marketplace.

An issue that has come to the fore in Irish life in recent times is that of access to credit and finance facilities. If businesses are to buck the unfortunate trend of years past, it is essential that this issue be addressed. While I welcome the budget announcement by the Minister for Finance, Deputy Michael Noonan, of a target of €3.5 billion in lending by Bank of Ireland and AIB to the SME sector, we must police that requirement more radically. I understand these banks are engaging in a horrible practice of withdrawing overdrafts and transforming them into term loans. This activity is masqueraded as new lending for the purposes of satisfying the requirements set down by the Minister for Finance. We must focus more radically on this behaviour and ensure we take into consideration the draw-down figures as opposed to loan approvals.

I propose to share time with Senator Colm Burke.

I welcome the Minister of State and the representatives of the business community to the Chamber for the debate on this Labour Party motion. We all recognise that small businesses are the backbone of the economy, employing more than 650,000 people in some 200,000 enterprises. We all welcomed the new jobs announced by various multinationals in recent months, but small businesses deserve to be the centre of our focus. These enterprise are located in Dublin and other cities and in rural communities throughout the State, each employing as few as one or as many as 20 or more staff. While they are very important, they are facing many problems. Consequently, I hope this motion will help to address some of those problems. The Government has proved it is pro-business and the Minister of State has pointed this out in respect of the micro-financing initiative, whereby money will be made available to small businesses employing up to ten people in local areas in the form of loans of €25,000 per year.

I believe credit to be the major issue affecting small and medium businesses or any business. When the banking crisis struck this country, it resulted in credit being unavailable. At the time, Fine Gael proposed the establishment of a State bank that would take charge of providing credit to small and medium-sized businesses, as well as other enterprises. Two domestic pillar banks are operating in the country and as part of the restructuring and recapitalisation of the banking system, the Minister for Finance, Deputy Noonan, recently imposed lending targets on them for the three calendar years up to 2013. They must lend at least €3 billion in 2011, €3.5 billion in 2012 and €4 billion in 2013 and unless these targets are met, the State bank will be back on the agenda.

I believe everyone has referred to the issue of rates and the Government is committed to a rates review. When a member of a local authority it was evident to me that the cost of water, both as an input and an output, was a major charge to any small business. I hope the establishment of Irish Water and the introduction of water metering whereby everyone must pay for water will help to lessen the burden on businesses in this regard. In other words, I hope businesses will no longer be asked to pay for everything. For years, local authorities have been relying on businesses, through business rates, to keep their services going. Nevertheless, Members of this House and the Lower House still object to paying a household charge of €100. This is a disgrace and if the tax burden is shared equally, small businesses will be able to make progress.

I welcome the Minister of State to the House and also the business people in attendance. As someone who has been self-employed for many years, I am deeply aware of the difficulties small businesses are obliged to face. My colleagues have touched on many of the issues already. However, I wish to touch on two issues. The first concerns an agency funded by the State that has removed a contractor from its list of approved contractors without any prior notice or without going through fair procedures. This is outrageous and the case is on my desk. A contractor was removed from the list overnight because of an allegation in respect of family members being involved. However, no complaint was made against the contractor in question and there is no evidence this contractor has done anything wrong. Despite this, he has been removed from an approved contractor list by a State-funded agency. No fair procedures were followed through and this is a clear case for a judicial review, which is the advice I have given. It is outrageous that fair procedure has not been followed through in this day and age.

The second issue I wish to raise pertains to insurance companies. I refer to cases whereby claims are lodged by businesses but huge delays arise in the processing of claims for damages experienced by businesses through flooding or fire. The process is prolonged ad infinitum to try to force businesses to accept settlements at values that are far lower than the level of damage done. This is an issue whereby insurance companies are abusing their position and Members certainly should ensure that insurance companies comply with the policies from which they have collected large premiums. I ask that this issue also be examined.

In order to facilitate the few remaining speakers, I ask Senators Whelan and Bacik, who are to share a slot, to so do within two minutes each.

I will do my level best.

I do not wish to go back over points that have already been made. I thank the Minister of State for what was a thorough, serious and genuine response to the contents of the motion. I also thank the stakeholders who have taken time out of their own busy schedules to attend this debate. While I acknowledge Members on this side are in government, they are not detached, removed or remote from the reality of life. I believe that having a detached Government is what got us into the present circumstances in the first place. The current Administration is grounded in reality and this debate is not simply about tea and sympathy. It constitutes a genuine attempt to engage with the small business sector and to act on its concerns. This motion is the first step in such a process. All good legislation and policy has its genesis in good ideas that are well crafted, properly communicated and then executed and there have been some highly positive and constructive suggestions made by Members across the House.

My suggestion is that the late payment legislation should be extended to multinationals. They benefit from a good tax regime in Ireland and while they provide important employment, this should not give them the opportunity to long-finger payment to small Irish suppliers. Consequently, they should be included within the aforementioned legislation. While I understand the transparency the Minister of State seeks to achieve, the reality is that late payment remains a serious problem. For most companies, the waiting period has gone past 70 days, whereas the average was only 52 days before the introduction of the legislation. Consequently, it should be extended to include multinational companies.

Departments are the worst offenders.

While there are many other points I would like to raise, I will conclude by noting one cannot have one's cake and eat it and one cannot run with the hare and hunt with the hounds. The only people paying for local authority services are those in the small-business sector. A property tax must be reintroduced to replace rates, which should never have been abolished. Those who oppose this are trying to have it both ways but that is not possible.

I welcome the Minister of State to the House and thank the many representatives from the business organisations who were invited to the House for taking the time to attend and for putting forward constructive suggestions and ideas to Members. All Members are highly conscious of the difficulties faced by small businesses and those who are self-employed in this difficult time. I am grateful to the Minister of State for setting out part of what the Government is attempting to do in this regard. It should be noted the Government's priority is to restore consumer and international confidence in the economy. All the actions and all the ideas that have been discussed should be carried out within that climate. I refer to two key ideas that are worth putting forward. One is a measure suggested by Dublin Chamber of Commerce, namely, to raise the threshold for the cash basis of accounting for VAT from €1 million to €2.5 million. I note Dublin Chamber of Commerce has put forward a detailed proposal in this regard. In addition, I support the idea suggested by others that the range of firms that can tender through the e-tender process for public sector contracts should be increased. For example, some of the tender requirements impose thresholds that are far beyond the reach of small and medium-sized enterprises in Ireland.

Many really useful suggestions have been put forward during the debate on this Private Members' motion. I thank all my colleagues who have contributed, as well as all the representatives who have attended the debate. As everyone is establishing his or her business credentials, my grandfather came to Ireland from Czechoslovakia in the 1940s and set up a venture that began as a small enterprise, namely, Waterford Glass.

The Senator's mother also was an entrepreneur.

I was only a lowly insurance clerk but what do I know about business? I thank the Minister of State for his most comprehensive contribution. I believe that Private Members' time for Government Members is much better served by the production of legislation, rather than simply discussing motions in the Chamber. I acknowledge that many good ideas have been put forward. Successive Governments, including the present Administration, can always do more for the business sector.

As time is short, I will limit myself to a couple of items. In his response, the Minister of State suggested that more than 98% of invoices were paid within 15 days by the public sector but there is absolutely no way this is happening. I do not believe anyone agrees with that point and the Minister of State should get his officials to provide him with the real figures in this regard.

Second, I refer to lending. While I acknowledge this also was the case under the previous Government, all Members are aware there is not a rat's chance in hell that AIB or Bank of Ireland will have hit their 2011 lending targets to the SME sector. It simply is not happening.

The other point not addressed by this motion and which is a glaringly obvious omission concerns business costs with the exception of rates. As for the latter, I am glad to hear that some of my colleagues on the Government side have realised they now are in government but I remind them that most councils are controlled by Fine Gael and the Labour Party. During the lifetime of the previous Government I proposed the reintroduction of the central government cap on rates. Such a cap should be reintroduced, there should be central government control on rates and models for rates should be considered, such as one based on turnover. In such a model, when a company is doing better it pays more but when it is not doing well, it pays less.

While simple measures can be taken, Members should not be fooled in any way by the banks about lending or by Departments claiming to pay 98% of invoices within 15 days, which is nonsensical. I will conclude by stating that one can talk about procurement until the cows come home and note that I produced a report for the Committee of Public Accounts during the lifetime of the last Dáil. However, the bottom line is there now is procurement for less, because the capital programme has been slashed in half and the schools building programmes have been slashed by €500 million over five years. One can procure all one wishes for half the amount that was available in 2010.

I genuinely wish the Minister of State well, as we all want businesses to thrive, but this cannot happen without addressing the matter of business costs. I have said before and will say again that increasing the minimum wage which those on the Government side have trumpeted and welcomed is a nonsense. It is a cost to business.

That is absurd.

It is a nonsense and will be proved as such.

Fianna Fáil abolished rates and got us into this mess.

Unless it is made easier and cheaper for people and businesses to operate particularly when they do not receive the credit which should be available, we can have these motions every day of the week and they will not make a difference.

The Government must walk the walk.

Unlike the last speaker, this has been a very positive afternoon's work. Already we have been given, thanks to our colleagues in Fianna Fáil, some hope that new legislation will be introduced to deal with the issue of upward-only rent reviews. The Minister of State has confirmed there is a review group dealing with the issue of social welfare benefits for the self-employed and there are clear guidelines on the amount of money the banks have available and are required to loan to the small and medium enterprise sector in 2012. Contrary to the comments made by the last speaker, there is still €14 billion available for procurement projects in 2012, a sizable amount of money that could be used to create much employment.

Senator Ivana Bacik's grandfather produced glass and I would like to think the glass is half full rather than half empty. We will follow up with the Minister of State on the issues on which we are not satisfied. The Labour Party group in the Seanad will pursue all these issues. All but one of us are new Senators and we are almost one year into the life of the new Seanad. This has been one of the key issues worked on by the Labour Party group and that work has come to fruition in this motion.

I thank everybody in the Visitors Gallery for persevering in listening to the debate for the past two hours. I acknowledge that a former Minister of State, Mr. Tom Parlon, was present for some of it.

Amendment put.
The Seanad divided: Tá, 15; Níl, 24.

  • Byrne, Thomas.
  • Crown, John.
  • Cullinane, David.
  • Daly, Mark.
  • Leyden, Terry.
  • MacSharry, Marc.
  • Mooney, Paschal.
  • Ó Clochartaigh, Trevor.
  • O’Brien, Darragh.
  • O’Donovan, Denis.
  • O’Sullivan, Ned.
  • Power, Averil.
  • Reilly, Kathryn.
  • White, Mary M.
  • Wilson, Diarmuid.

Níl

  • Bacik, Ivana.
  • Bradford, Paul.
  • Brennan, Terry.
  • Burke, Colm.
  • Coghlan, Eamonn.
  • Coghlan, Paul.
  • Comiskey, Michael.
  • Conway, Martin.
  • Cummins, Maurice.
  • Gilroy, John.
  • Harte, Jimmy.
  • Healy Eames, Fidelma.
  • Heffernan, James.
  • Henry, Imelda.
  • Higgins, Lorraine.
  • Keane, Cáit.
  • Kelly, John.
  • Landy, Denis.
  • Mulcahy, Tony.
  • Mullins, Michael.
  • Noone, Catherine.
  • O’Keeffe, Susan.
  • O’Neill, Pat.
  • Whelan, John.
Tellers: Tá, Senators Ned O’Sullivan and Diarmuid Wilson; Níl, Senators Paul Coghlan and Susan O’Keeffe.
Amendment declared lost.

I move amendment No. 1:

To delete all words after "Seanad Éireann" and substitute the following:

notes with grave concern the recently released GNP figures that indicate a contraction of domestic economy;

recognises that most SMEs are engaged in the domestic economy;

notes the need to make more supports available for those who are self-employed;

notes that access to credit remains a huge problem for SMEs despite the State now owning large shares in the major banks;

recognises that the policies being pursued by the Government are failing SMEs and the economy in general;

calls on the Government to replace its policy of austerity with one of stimulus and investment;

proposes that the Government consider the adoption of a number of measures specifically to support small business and those who are self-employed, to include:

(a) ending the upwards only rent regime;

(b) addressing the difficulties with late payments for those contracted to provide goods and services to the public sector including by NAMA;

(c) opening up the rules on tender and procurement again to enable a wider range of firms and businesses to seek public contracts;

(d) to develop clauses in public procurement contracts to promote the sourcing of local goods and suppliers and the provision of training;

(e) the provision of greater levels of social protection, including protection in the event of illness, for those who are self-employed; and in particular for those whose business fails leading to a collapse of income including allowing them to avail of social welfare benefits;

(f) addressing high levels of local authority rates, and looking at the introduction of progressive rates whereby larger and more profitable, typically, multinational businesses pay a fairer proportion of rates to alleviate the burden of , mainly indigenous, SMEs; and

(g) enabling company directors to invest money from their private pension funds into their businesses;

(h) ensuring increased levels of access to credit and finance facilities for small and medium enterprises including expediting the promised partial loan credit guarantee scheme and micro enterprise credit scheme;

(i) Reversing the unwise decision to increase VAT with is stifling domestic demand and creating differentials North and South.

I second the amendment.

Amendment put.
The Seanad divided: Tá, 14; Níl, 25.

  • Byrne, Thomas.
  • Crown, John.
  • Cullinane, David.
  • Daly, Mark.
  • Leyden, Terry.
  • MacSharry, Marc.
  • Mooney, Paschal.
  • O’Brien, Darragh.
  • O’Donovan, Denis.
  • O’Sullivan, Ned.
  • Power, Averil.
  • Reilly, Kathryn.
  • White, Mary M.
  • Wilson, Diarmuid.

Níl

  • Bacik, Ivana.
  • Bradford, Paul.
  • Brennan, Terry.
  • Burke, Colm.
  • Coghlan, Eamonn.
  • Coghlan, Paul.
  • Comiskey, Michael.
  • Conway, Martin.
  • Cummins, Maurice.
  • D’Arcy, Jim.
  • Gilroy, John.
  • Harte, Jimmy.
  • Healy Eames, Fidelma.
  • Heffernan, James.
  • Henry, Imelda.
  • Higgins, Lorraine.
  • Keane, Cáit.
  • Kelly, John.
  • Landy, Denis.
  • Mulcahy, Tony.
  • Mullins, Michael.
  • Noone, Catherine.
  • O’Keeffe, Susan.
  • O’Neill, Pat.
  • Whelan, John.
Tellers: Tá, Senators David Cullinane and Kathryn Reilly; Níl, Senators Paul Coghlan and Susan O’Keeffe.
Amendment declared lost.
Question, "That the motion be agreed to," put and declared carried.

When is it proposed to sit again?

At 10.30 a.m. tomorrow.

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