Joe Flaherty (Longford-Westmeath, Fianna Fail) | Oireachtas source

I commend the Minister of State on his work on this. The Government has moved swiftly. It is an excellent and measured response. It is indicative of a fast-paced and reactive Department. Again, I commend him on his work.

I welcome the legislation. We have seen it first-hand at the enterprise committee and it will facilitate the creation of a €1.2 billion Ukraine credit guarantee scheme as part of a suite of additional measures to aid businesses through what is a particularly volatile and disruptive time for many of them. It is affecting every business, from local shops to SMEs to large producers. Many food producers and exporters are dependent on the legislation getting through as quickly as possible.

The amendment will allow for the establishment of a new Ukraine credit guarantee scheme with an end date of 31 December 2024.

I assume there will be capacity to review that date closer to the time. Loans can be made by qualifying finance providers under the scheme and can have a term of up to six years from the date of drawdown. That is to be welcomed by businesses.

The proposal will amend the loan guarantee scheme agreements from the 2021 Act, which will increase the limit of aggregate liability in respect of contributions committed from €50 million to €180 million. That is indicative of the scale of the crisis that many of these producers are currently facing and the reason we need such a response to the situation. The technical amendment was approved by the Government in September to facilitate designated Ministers engaging in future agreements with the SBCI for the delivery of EIB group-backed SME loans. This is particularly important in light of ongoing economic uncertainty and the need to promote resilience, investment and recovery. Those have very much been bywords for enterprise in Ireland, particularly in the export-led community. That is why, as a Government, it is critical that we stand shoulder to shoulder with these businesses at this difficult time.

The proposed Ukraine credit guarantee scheme will unlock up to €1.2 billion in low-cost unsecured working capital for SMEs, small and mid-cap companies and primary producers and allow them to spread the cost of an increase in input cost and disruption to supply chains while they move to new suppliers, absorb the cost of disruption and evolve their business models to become much more resilient. That is indicative of a can-do attitude within the Department of the Minister of State. He and his officials are to be commended on the fast pace at which they have responded on this issue. Similar schemes are available in other member states and the proposed scheme will reduce the interest cost for working capital for SMEs in Ireland in a similar manner.

A significant and ambitious credit guarantee scheme will assist lenders in providing liquidity to these companies but, more important, it will send a strong signal of support for and confidence in producers in Ireland. The Ukraine credit guarantee scheme will facilitate additional credit risk appetite from lenders to the SME market, maximising the ability of businesses to access appropriate finance at a time liquidity will be critical. It has the capacity to enable lenders to begin or continue providing urgently needed liquidity to businesses in every sector and region. That is the critical aspect of the scheme - the potential it offers for almost every business that is operating in a manufacturing capacity to access it. That, in turn, will enable them to sustain employment across the country. It also leverages the knowledge and lending experience of lenders with respect to their customers.

It is important to point out that the proposal is similar, in terms of loan type, tenure and credit amounts available, to the Covid-19 credit guarantee scheme, which resulted in more than €705 million in lending going to almost 10,000 businesses since it was launched in September 2020. In essence, we are going with a proven model that has worked and helped us through a previous crisis. We know the Department has the knowledge and expertise to ensure this will work. The loans under the Covid credit guarantee scheme have helped to maintain more than 81,000 jobs to date. The scheme closed for applications earlier this year in line with expiration of the underlying temporary state aid framework. Through the proposed legislation, the Government can now, in a widely available manner that proved effective throughout Covid, supply similar lending to businesses in need.

Significant progress has been made with the operator of the scheme, namely, the SBCI, and the on-lenders, to prepare for a rapid deployment of the scheme. The message we are getting from businesses and manufacturers is that once the legislation is finalised, they will need to be able to access this quickly. Similarly, businesses need to be able to tap into the energy scheme for businesses within hours of the Finance Bill 2022 being passed. They will need to be able to log on, register for the scheme and get their payments back for September and October. I am conscious that cannot happen without the Bill being passed but businesses are crying out for this to happen. I know I am straying off the subject but it is important that departmental officials and the Minister of State take back the message that those payments need to be issued within hours of the Finance Bill passing through these Houses because there are many small- and medium-sized businesses urgently hanging on and desperate to get those payments.

I commend the work of the Minister of State on the Bill. It has been an exceptionally busy time in his Department. He has faced the challenge head-on. I appreciate there was some prior knowledge in terms of the work that was done in Covid but it is indicative of Ireland as a country where we do business and are receptive to doing business but, more important, we support and stand shoulder to shoulder with people who want to do business. We are a progressive modern European nation that stands shoulder to shoulder with our European cousins at a time of crisis but it is important that we also stand shoulder to shoulder with our own people when they are suffering at a time of a crisis that is not of their making but results from a war on a European front. We need to make a strong statement in that regard and we have done so through our support for Ukraine but also, more important, with the decisive and impressive action to support businesses.

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