Mr. Niall Cody:

I go back to March 2020, when the then Taoiseach announced the public health restrictions. At that stage, we issued a press release about suspending enforcement action and interest collection. From memory, I think it issued on 15 March 2020. The temporary wage subsidy scheme then came in with effect from 27 March. We had no idea what was coming. Our debt enforcement suspension in the debt warehouse scheme was legislated for with effect from 1 May 2020.

I recall the Secretary General of the Department of Finance asking me, after the wage subsidy scheme had come in, whether there was anything else we should be doing, and I said we had suspended enforcement action and interest application but that the legislation provided that we should do that. I said I had been thinking of the idea of debt warehousing, which was in my head as a safe mechanism to use, but we had no idea what was going to happen. We could not have used a process where businesses applied for debt warehousing and showed their individual need. More than 100,000 entities were in debt warehousing at its peak. The original temporary wage subsidy scheme was due to last for 13 weeks and we had no idea what would happen. The scheme lasted for nearly two years. The warehousing was extended when the war in Ukraine started and the cost of living peaked. That was for a year but we had no idea how long it would be needed, and it was subsequently legislated for.

The legislation was drafted such that any business that was dealt with in our business division, which deals with all the SMEs, automatically qualified for the debt warehouse. They did not have to apply for it but automatically qualified for it. Any large businesses, which are dealt with by our large-cases division, or medium enterprises, which are dealt with by our medium-enterprise division, had to make a business case to be eligible to join it. I recall looking at cases at the time where businesses that had shut subsequently went online and some of them actually increased their business over the lifetime of the process, but if they were eligible at the start, there is no mechanism to decide they are not eligible anymore. If a business has finance, bank debt and tax debt in the warehouse, it makes absolute business sense for it to work down its non-tax debt at whatever rate of interest and to benefit from that.