David Cullinane (Sinn Fein) | Oireachtas source

I welcome the Minister of State and the opportunity to participate in the debate on the SME sector and the SME envoy network.

I was part of a delegation last January from the Oireachtas Joint Committee on Jobs, Enterprise and Innovation. Six of us travelled to Brussels to meet officials and several Commissioners. We met one of the top officials who is heading up policy development for the SME sector. He was very complimentary of steps this Government has taken to help SMEs, although obviously much more could be done.

In 2007 the European Commission launched the Small Business Act, SBA, which the Council of Ministers adopted in 2008. This applies to all companies with staff of 250 or fewer. The Commission states that the Act “aims to improve the overall approach to entrepreneurship, permanently anchor the 'Think Small First' principle in policy making from regulation to public service, and to promote SMEs' growth by helping them tackle the remaining problems which hamper their development”. We all agree with, and aspire to, that approach and want to see action on it.

The SBA was reviewed in early 2011 and arising from this it was agreed that each member state would appoint an SME envoy working group which would work with the Commission and the EU representatives of the SME sector and the SBA advisory group. The priority areas for the SBA following the review were making smart regulation a reality for European SMEs; paying specific attention to SMEs’ financing needs; taking a broad-based approach to enhancing market access for SMEs; helping SMEs to contribute to a resource-efficient economy; and promoting entrepreneurship, job creation and inclusive growth.

I want to dwell on key areas where SMEs need more help and Government policy needs to improve. We have discussed legacy debt over recent months since Morgan Kelly gave a talk on its potential impact on the economy. My party has called on the Government to direct a section of Enterprise Ireland to provide a service for SMEs before they fall off the debt cliff. Enterprise Ireland should help these businesses to allow them separate the toxic element of their debt, normally property assets, from the functioning and profitable sections of their business. Just as people in mortgage distress need their loans restructured, SMEs need their debt to be re-balanced or put on hold. As long as the debt is a noose around the neck of an SME it is difficult for that business to expand and take on new people. If this does not happen with some urgency viable businesses will continue to drown in legacy property debt, they will haemorrhage jobs and there will be a significant brake on growth. These toxic elements resemble mortgage distress cases in that the debt needs to be restructured, written down, or parked, until the businesses can deal with it. Uncertainty about resolution is damaging recovery.

The State needs to actively promote the growing needs of crowd funding. The Oireachtas Joint Committee on Jobs, Enterprise and Innovation examined this by inviting experts in the field to give their view. In the sector’s short existence it has reduced the time it takes small enterprise to get loans and provide finance at a competitive rate. Several crowd-fund providers have engaged in the Irish market and a State-funding partnership with one or more of these would help accelerate the sector’s growth. The development must, however, be monitored. Crowd funding is innovative and exciting but unregulated. We know that lack of regulation is a problem.

Other important issues include access to credit and opening up public procurement. SMEs want big State contracts broken down, if possible, into small contracts that would enable them to tender for the work. Much has been done to support SMEs but upward-only rents remain a problem, which we have debated several times in the form of Bills proposed by Senator Quinn that were not supported. I will support any and all measures to support the SME sector because that is where the majority of jobs are now and will be created. It is very important for our economy. We should lend any support we can to help entrepreneurship and foster creativity, to make sure that if people have a viable business idea they get all the support they need to make that happen.