Paul Connaughton (Galway East, Fine Gael) | Oireachtas source

I thank the Ceann Comhairle for the opportunity to speak to the Bill, which aims to secure the future of Ireland's small businesses via the examiner process. Although there are many laudable aspects in this proposed legislation, there are others that may well be impractical, given the short interval in which an examiner must work. That is why the Government is unable to support this legislation.

Deputy Donnelly has correctly highlighted the need to reduce the cost of entering examinership and is attempting to remove some of the current barriers to business that are causing otherwise viable companies to falter in prevailing economic conditions. Proof that the Government recognises the need to reduce examinership costs is contained in the Companies (Miscellaneous Provisions) Bill 2013, which would permit small businesses to apply for examinership in the Circuit Court, where costs are significantly lower. They may be up to a third lower. Although this is welcome, we should consider a structure that would suit even smaller businesses. For example, the legislation defines small companies as those with fewer than 50 employees and a turnover not exceeding €8.8 million. We should also consider providing a smaller framework for companies with fewer than ten employees and a turnover of less than €1 million.

As employment levels rise in tandem with economic prospects on the domestic front, these small or micro-companies need time to recuperate and build resources and capacity before re-engaging with debts. High rents are one reason small companies, as defined in the legislation, are seeking the protection of examinership, but the micro-companies of which I speak are also facing this problem. They are often dissuaded from entering examinership because of prohibitive, albeit reduced, court costs.

Problems with the Bill include the removal of obligatory court oversight and the prospect of allowing the examiner to assume the powers of directors if it is believed that directors are trying to stymie the examiner process. This would result in an examiner acting as judge and jury and would leave no avenue for appeal open to directors. Requirements that the examiner would report to the Director of Corporate Enforcement are unworkable and would effectively change the nature of examinership while broadening its remit significantly beyond what is currently intended.

Valued issues are raised in the Bill, including the need for a more effective rescue system for ailing businesses. However, small businesses are interdependent and allowing firms easier access to writing down debt would in turn damage many viable firms both now and for years to come. Similarly, the provision in the Bill that creditors should bear their costs is contrary to common law and would cause unforeseen and unwanted costs on many small companies whose debtors enter the examinership process.

This Government is committed to supporting job creation and helping companies of all sizes to survive the downturn of recent years and avail of opportunities as the economic climate - locally, nationally and globally - improves. Much of the focus of this Government over the past three years has been about reducing costs for businesses, with an emphasis on building an economy based on enterprise, innovation and exports. It is only through a focused enterprise culture that Ireland can prompt the innovation so necessary for companies of all sizes in today's rapidly changing economic climate.

The focus on jobs has been intense and efforts by the Minister, Deputy Bruton, and his Department have borne significant fruit, improving the country's competitiveness and placing all the necessary back-up infrastructure at the disposal of Ireland's export countries. Ireland has gained several places in ratings of world competitiveness in the past two years, which is proof that real steps are being taken to cut the costs of doing business in Ireland, and this is increasingly being recognised on a global level. A number of innovative measures have been put in place to allow small and medium companies greater access to finance, including the credit guarantee scheme and the micro-enterprise loan fund. To date, over €10 million has been approved through the credit guarantee scheme alone, which is a very significant injection of funds for companies which in turn has helped create and maintain over 650 jobs.

This Bill highlights areas to be addressed but the Government has set out the reasons it cannot be supported at this time.

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