Aideen Hayden (Labour) | Oireachtas source

The issue of the treatment of small businesses by the banks has come up at this committee on a number of occasions. I note that there is a proposal concerning the idea of a State investment bank that would be specifically geared toward small and medium-sized businesses.

How have members of the representative groups found dealing with the Revenue Commissioners? To what extent have the Revenue Commissioners given consideration to the difficulties of small businesses?

We met a number of NGOs this morning and there is wide consensus about the problem but very little on where the solution lies. One could say there is complete divergence on the proposed solution. This morning it was not to cut spending and this afternoon it is not to impose tax.

There is consensus on the failure of domestic demand to recover. One observation made this morning was that to cut benefits further would have a very severe impact on the domestic economy because research shows that people on low incomes spend more of their income locally than those on higher incomes. There would be a serious adverse impact on the domestic economy were we to cut social welfare payments.

There was also wide consensus this morning on the need for stimulus in the economy, particularly on the need to focus on the construction sector. The emphasis this morning was on social housing. I notice in IBEC's proposals there is less emphasis on the need for a stimulus package and more on how to use existing taxation and VAT structures to stimulate investment. While this is not part of IBEC's submission, does it have any thoughts on how the money should be spent were the Government to engage in a €1.5 billion investment package as TASC suggested this morning?

I was interested in the reasonable consistency between witnesses on capital taxation, capital gains and capital acquisitions tax. I can understand why that might be an issue if one wants to have an active business and to roll over assets. CAT is an issue if one has a family business but surely IBEC is not proposing that the Government should reduce these taxes outside the business area. I am interested in what IBEC said about tendering and the idea of an Ireland rate of return in tendering decisions. I have personal experience of this and it is my opinion that State and semi-State companies do not pay enough attention to their role in spending money and the impact of that on the economy. In several State requests for tenders, RFTs, some of the impositions on small and medium-sized companies are very onerous in terms of levels of insurance and other matters. IBEC states in its submission that State and semi-State organisations need to be more mindful of positive outcomes of awarding tenders. Does it have any proposals as to how that could go further, apart from simply being more mindful? Does it have any practical proposals for Government as to how that could be achieved?

It would be useful if IBEC's organisations were to cheer on the welfare to work scheme. The Department of Social Protection will transfer the rent supplement payment to the Department of the Environment, Community and Local Government. The rents paid in the future will depend on an individual's income so that if the person starts earning, he or she will not lose a benefit. Maybe IBEC's organisations could cheer that on as a Government initiative.

On the double rent reduction, I do not entirely agree that businesses have not closed because of upward-only rent reviews. In my own area, Dún Laoghaire, I am aware of several businesses that have closed because landlords have refused to renegotiate rents and have left the properties sitting there. It is impossible to understand how a landlord can leave a property sitting idle when he or she had a good tenant. The double rent reduction option is interesting but I see it being difficult to administer. It flies in the face of tax certainty. It is very difficult to see how a business would prove that its ability to trade has been affected by this. One would need proof that somebody is paying a sum above market rent and so forth. Could the witnesses explain that further?