The Government is nothing if not consistent in its determination to apply neoliberal economic doctrine to dealing with the plight of the economy in its approach to trying to create jobs. That doctrine is pretty simple and has been applied consistently by the current Administration as it was by the previous Government, albeit with minor tinkering. However, the broad strokes of the policy the Government pursues to create jobs are the same as those of the last Government, namely, to keep taxes low on profits and wealth, to slash public expenditure on job creation, public services and infrastructure, to drive down pay and conditions for workers, to cut back on social welfare in a so-called effort to activate people for jobs and to gear all of the institutions of the State and the economy towards facilitating multinational corporations in the hope this will bring in significant amounts of foreign direct investment. I put it to the Minister of State, Deputy John Perry, that this policy has failed. I argue that it contributed significantly to the crash that has devastated the economy. Moreover, as the Government continues to apply it, it has failed to bring about any meaningful recovery in the economy. The Government trumpets with great fanfare every new announcement of jobs that results from foreign direct investment and everyone, of course, welcomes any job creation, particularly against a background of mass unemployment and emigration, as we have faced in recent years. However, even in the best of all possible scenarios, foreign direct investment cannot compensate for the damage to the domestic economy and the small to medium-sized enterprise, SME, sector, which the Government claims to champion. It cannot compensate for the damage the Government has done and is doing to the domestic economy and the aforementioned sector.
SMEs provide 70% of all jobs, while foreign direct investment accounts for 10%, which is high by international standards. The idea that gearing everything towards foreign direct investment and facilitating multinationals, that is, the big corporates and the major chains, will provide any sustainable, stable platform for economic recovery is ideological claptrap that has failed us disastrously. A change of strategy is needed to help the small to medium-sized enterprise sector and, frankly, decorative changes to the county enterprise board structure really will make little difference to the fundamental problems facing small and medium-sized enterprises and the domestic economy in general. An absolute reversal of the policies the Government has pursued is what is required. Wages must be raised to put more money back into people's pockets in order that they can spend it in the small and medium-sized enterprises that are on their knees and which are going out of business daily. Moreover, something must be done about the rates that are crippling small and medium-sized enterprises. They are completely regressive, in that they hit disproportionately small and medium-sized enterprise but let off the big multinationals and corporates which can well afford them. With others, I have stated repeatedly that a progressive differential rates scheme must be put in place in Ireland in order that struggling small to medium-sized enterprises will have rates applied according to their profitability, turnover and ability to pay, rather than essentially having a flat rates scheme that has a disproportionate impact on small and medium-sized enterprises. On the issue of upward-only rent reviews and rents that are impossible to sustain for many small and medium-sized enterprises, I note the Government's unwillingness to really tackle this issue. Presumably, this is because the banks and NAMA are now the big landlords and have no interest in reducing rents, while the Government is not willing to take them on on this issue.
These are the major issues and against that backdrop, I cannot discern how what is proposed in the Bill can make much difference. I accept that there is a certain rationale to having a co-ordination of local enterprise support at a national level. That is the single point on which I can discern a certain logic in the Government's proposals in the Bill, whereby instead of having 32 separate or discrete county enterprise boards, some form of national co-ordination of the effort to support and help enterprise can be put in place. While I can see the logic of doing this, I fear that what really is running behind this measure is a corporatisation of local development and support structures.
I fear this runs parallel to what this Government is doing in other areas of local development, particularly in the community development sector, where it is dismantling the localised, more democratic and community-based structures in favour of a corporatisation of support for enterprise and community development generally. Removing the democratic element, the input from local people, small business people and elected councillors, and moving it into the more centralised executives of Enterprise Ireland or the top management of the local authorities puts an even greater distance between people on the ground and the structures that are supposed to really engage with them at a local level and work out ideas, solutions and suggestions for promoting and supporting business at a local community level. By doing this the Government is putting them at a further remove.
That is not to say the county enterprise boards and all our local community structures have been absolutely wonderful and brilliant. Often they are labyrinthine and confusing, and I can see a case for streamlining them. However, I worry that this is a move in the wrong direction in that the streamlining may be just a corporatisation which will put things at an even greater distance from the people the Government is supposed to be supporting and helping. I worry, as I said at the beginning, that this is geared more towards facilitating the big corporations and multinationals rather than supporting small and medium enterprises. I have been very concerned about this and have received many representations about it. It is part of the same pattern as the Government's plans to bring community development structures under the local authorities and outsource community development and local employment services by open tender, which is absolutely crazy. I see a parallel between that and the talk of outsourcing social welfare, so-called labour activation, to private corporations, which could come in and tender for local employment services, threatening jobs and those services. This could potentially lead to a bizarre situation in which companies such as G4S, which provides these services in England, or multinationals from other parts of Europe might come in and provide local employment or community development services in Ballyfermot, Dún Laoghaire or Ballymun. That is crazy. I see a parallel there and I worry about the direction of this but I will, obviously, follow the debate.