Mr. Neil McDonnell:

ISME thanks the members of the committee for their kind invitation to address the committee.

ISME first issued guidance to members and the public on the Covid-19 threat on 12 February. We have maintained a low-key, information-based and data-driven approach to the issue since then. The likely impacts of the pandemic on SMEs were clearly evident to us in early March. We set out three priorities at the start of the Covid-19 pandemic: an immediate working-capital liquidity solution for SMEs beyond mere debt finance; affordable access to an amended examinership regime for SMEs for those firms that would inevitably get into trouble; and an operational plan for rebooting businesses post lockdown. That operational plan needs to include rational and reasonable health, safety, and hygiene measures; clarity on the phases of return and reopening; and assistance for direct costs incurred such as personal protective equipment, PPE, consumables and cleaning.

The average small business owes €78,000 in trade credit to other small businesses. Without a workable liquidity solution, large amounts of this inter-company debt will go bad, with terrible implications for business and personal insolvencies. We have been consistent and clear about these requirements in our communications with the Taoiseach, the Minister for Public Expenditure and Reform, and the Minister for Jobs, Enterprise and Innovation. We have worked with others to amplify the voice of the small enterprise sector. I am delighted to note this committee has accepted submissions from the SME Recovery Plan and the Local Jobs Alliance.

The voice of the SME sector has not been heard throughout this pandemic. Some fault lies with those in the SME sector. Their voices are disparate and fragmented, and their representatives find it difficult to coalesce around agreed policies and themes. ISME is working to address this issue.

The greater fault lies with the State apparatus and an industrial policy that is fixated on the foreign multinational corporate sector. We have no issues with foreign multinationals, which are among some of the best customers of our SMEs. Our indigenous industrial policy must be fit for purpose and focused on those areas of greatest systemic importance to the Irish economy, to society and to the Exchequer.

The issue is particularly important in the context of the Government's response to the pandemic. Many of the missteps with the pandemic unemployment payment, the wage subsidy scheme, the trading online voucher scheme and the Return to Work Safely Protocol could all have been avoided if there had been formal liaison between the Government and small businesses. Unfortunately, SMEs continue to be a blind spot for the Government. It is hard to say why this is the case. Our interaction with the upper reaches of the public service and the Executive leaves little doubt as to their perception that big business is good and small business is bad, and that big corporations pay their taxes and small business owners fiddle their expenses. The figures in appendix 1 tell a different story. This is not merely anecdotal. It has been said to me by a senior trade union official and by a senior civil servant that the lower tax credit available to the self-employed and the USC surcharge imposed on higher-income self-employed people are justified by their ability to fiddle expenses. This is baseless and unsustainable. We are setting out a means to rectify these issues while repairing the State finances.

Finally, I say to members of the committee that while many of them may feel overwhelmed by the enormous challenges presented by the pandemic, this is a great time to be a legislator. Great turmoil brings great opportunity to address and repair problems that were ignored when times were good. We wish the committee every success in doing so.