John Perry (Sligo-North Leitrim, Fine Gael) | Oireachtas source

I compliment the Minister on the significant investment he is making in the area of communications, energy and natural resources. The schemes are commendable and very good for householders and businesses and job creation and retention. As Minister of State with responsibility for small business, I am acutely aware that the operating environment for small businesses in Ireland remains difficult. That is why the Government is completely focused on delivering practical measures to help improve and support the small business sector. Budget 2014 is another pro-small business budget and further proof of the Government's commitment to this important sector.

I am chairman of the departmental advisory group on small business. The group consists of representatives of the small business community from across the country. This group and the high level group on business regulation ensure that the voice of small business is heard at the very centre of government. The Action Plan for Jobs has delivered some key initiatives which have made incremental improvements in the business environment. Access to finance has been improved through initiatives such as the microfinance fund and the SME credit guarantee scheme. The available fund is €90 million and direct applications are accepted. The fund will be distributed through local offices. The stipulation to have been refused a loan by a bank has been removed. We are also examining the credit guarantee scheme. I know of a company employing 15 workers which got its start under the credit guarantee scheme, which is beginning to play a role and will play a greater role in the future.

We have also sought to tackle the issue of late payments through the transposition of the EU late payment directive into Irish legislation, the development of a single licensing application portal that will see 33 licences operated by 15 different authorities for the retail sector and the reform of the county enterprise boards through the establishment of new local enterprise offices. That went through Seanad Éireann today.

The 2013 Action Plan for Jobs also contains a number of measures specifically aimed at supporting the retail sector. These include a project to increase the number of small businesses trading online, as mentioned by the Minister, Deputy Rabbitte, and an initiative to streamline business licence application procedures. We have also set up an interdepartmental group on the retail sector, which has just recently concluded a consultation process with retail representative bodies, and it is currently assessing proposals and considering if we can introduce any further possible measures to assist this critical sector.

The action plan for 2014, which is currently being finalised, will seek to build on the progress already made and is set to deliver a suite of actions to support enterprise. Small and medium enterprises, SMEs, will continue to be a key element of this process, and a number of proposed actions are currently being examined, the focus of which will be aimed at supporting this vital sector of the economy. I am very happy the voice of small business has been heard and is receiving very specific attention in budget 2014. I am pleased that so many of the ideas and recommendations brought to the Minister for Finance, Deputy Noonan, through the advisory group on small business and the high level group on business regulation have been addressed in this budget.

Micro and small enterprises are a central part of our economy and their ability to succeed and grow underpins our future potential for jobs, growth and prosperity, as 98.5% of all firms are small and employ over 650,000 people throughout the country. Budget 2014 will enable the continued delivery of over €2 billion in new, non-bank credit schemes, targeted at the full range of businesses from micro-enterprises through SMEs to mid-sized Irish exporting businesses and high-growth technology firms. It includes the micro-finance scheme, credit guarantee scheme, the National Pensions Reserve Fund SME schemes, development capital scheme and the seed and venture capital scheme.

This Government is now also putting in place a major package of new supports for small business start-ups and existing small businesses. This package includes €3.5 million in additional funding for the county enterprise boards or local enterprise offices, LEOs, and a package of measures to support start-ups. This will help to support the expected creation of a further 4,500 jobs in 2014. This funding will further support the important role of the LEOs as a one-stop-shop for businesses, to be located in every community, and ensure that there are locally accessible supports available to nurture entrepreneurship - the theme of the budget - and promote the creation and maintenance of employment.

Further job creation measures included in budget 2014 include the retention of the 9% VAT rate for the hospitality sector in order to support and encourage growth in small businesses in the tourism sector, a reduction in the air travel tax to 0% from 1 April in order to encourage the development of new routes and follow on from The Gathering and anti-fraud measures to protect compliant business from unfair competition by tackling the shadow economy.

The Minister also announced a package of measures aimed at supporting start-ups and growing businesses, including the Start Your Own Business scheme to encourage individuals who are long-term unemployed to start their own unincorporated business. With this, people will be able to avail of a two-year exemption from income tax, up to a maximum of €40,000 per annum, if they have been unemployed for at least 15 months prior to starting their own business. Capital gains tax relief will encourage investment in new business, which is very important, and the employment and investment incentive will be removed from the higher earners restriction in order to incentivise higher levels of investment in SMEs. There will be an increase in the threshold for the Credit Review Office from €500,000 to €3 million, meaning it can consider cases from the many businesses which are over the €500,000 figure. Cashflow in the small business sector will be supported by increasing the VAT cash threshold from €1.25 million to €2 million.

Building Business Capacity, a training and mentoring programme consisting of two days' dedicated off-site training with export mentoring support, will seek to enhance an SME's business and financial capacity with regard to understanding and utilising a broader range of financial products, as well as equipping them with the necessary tools to make a strong business case when applying for credit. The programme will be launched on a pilot basis with 1,000 SMEs. There will be an SME communications strategy to increase awareness of State supports among SMEs, and this will also ensure that there is a greater awareness among businesses of the soon to be relaunched credit guarantee scheme. There will also be a package of improvements in the research and development tax credit, aimed particularly at small Irish companies.

In spite of the difficult economic circumstances in which we find ourselves, Ireland has many strengths. The Global Entrepreneurship Monitor reported in July 2013 that 19,000 people started a new business in Ireland in 2012, and we want that figure to be even higher for 2013 and 2014. Through budget 2014 we will be able to provide continued supports for the small business sector, which is central to economic recovery, job creation and the development of the Irish economy.

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