Oireachtas Joint and Select Committees

Tuesday, 27 January 2015

Joint Oireachtas Committee on Jobs, Enterprise and Innovation

Entrepreneurship and Related Issues: Irish Exporters Association

1:35 pm

Photo of Marcella Corcoran KennedyMarcella Corcoran Kennedy (Laois-Offaly, Fine Gael)
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I remind members, delegates and those in the Visitors Gallery to ensure their mobile phones are switched off for the duration of the meeting as they interfere with the broadcasting equipment, even when left in silent mode.

We will now begin as part of the rapporteur report a discussion with the Irish Exporters Association on women entrepreneurs, women involved in the technology industry, the skills needs and balanced regional development. I welcome Mr. Hugh Kelly, president of the Irish Exporters Association and chief executive of Associated Marketing Limited, and Ms Nicola Byrne, council members of the association and managing director of Cloud 90.

By virtue of section 17(2)(l) of the Defamation Act, 2009, witnesses are protected by absolute privilege in respect of their evidence to the joint committee. However, if they are directed by it to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or an entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable.

Mr. Hugh Kelly:

The Irish Exporters Association is the independent representative body for all Irish exporters. We offer practical help and support to Irish exporters under the following three main pillars: acting as the voice of the Irish export industry; providing practical knowledge; and connecting Irish exporters. We represent the whole spectrum of companies within the export industry, from indigenous SMEs to global multinational companies.

There is no sustainable employment without business and there is no business without the entrepreneur. It is the contention of the Irish Exporters Association that if we want to build a stronger indigenous economy, we need to foster greater entrepreneurship in Ireland. To encourage an entrepreneurial culture, we must acknowledge and reward the risk takers who have the ability and courage to step away from secure employment to become Ireland’s next entrepreneurs and future employers. These are individuals who are willing to invest their experience and energy in new ventures that offer many possibilities, including the very real possibility of failure. They are men and women who offer to risk their savings and, very often, mental and physical well being to venture outside their comfort zones in the hope of achieving something exceptional. Individual success inevitably leads to wider benefits for communities and the country. It generates employment and higher taxes for the Exchequer and delivers to those who might otherwise be unemployed a strong message that society needs and values them, too. The benefits of entrepreneurship are far reaching.

Most entrepreneurs are not solely motivated by money. If they were, we would have to characterise many Irish entrepreneurs as unsuccessful compared to their peers in the established corporate world. Among other things, entrepreneurs are motivated by the challenge and desire to make a difference, reach their full potential, provide employment, serve a happy customer and contribute to their community.

However, entrepreneurs have families and responsibilities and, like the rest of society, must eat, pay medical bills, house and educate their children and plan for their retirement. Starting a business carries significant risk to the individual. If the Government shares our belief in the importance and value of entrepreneurs and is genuine when it says it wishes to foster entrepreneurship, why does it support policies that fail to acknowledge those risks? Current policies send a very clear message to would-be entrepreneurs, and it is not always one of encouragement, support or appreciation.

In addition to all the inherent challenges to be faced in starting a business, entrepreneurs continue to be refused a PAYE tax credit. If they succeed, their marginal tax rate is 3% higher than that of the rest of society and they must pay capital gains tax of 33% if they try to realise gains. Our tax legislation encourages families to sell out rather than keep building on through the generations. If entrepreneurs' businesses stumble, they carry the full cost of redundancies, despite paying hefty employer PRSI contributions, and are provided with no safety net from social welfare.

If legislators really want to deliver sustained economic growth, higher exports and lower unemployment, they need to show, not just tell, our entrepreneurs, risk takers, business owners and employers that their efforts are truly appreciated and valued. The penalties suffered for being an entrepreneur and an employer in Ireland are not only unjust but dangerously undermine one of the very important foundations of wider economic development. These issues affect all entrepreneurs. I will hand over to my colleague, Nicola Byrne, who will talk about how these and other challenges affect female entrepreneurship in particular.

Ms Nicola Byrne:

We are not short of data about entrepreneurship. Reports are coming from every corner and every angle. Given that members have copies of our presentation, I will speak off script. I am a high profile female entrepreneur. I established 11890 in 2006 and before that I had other small businesses. For example, I did all the advertising on Eircom telephone boxes. During that time I have raised three children, now aged 10, 12 and 16. I have continued to work and now, again, I am stepping into the face of entrepreneurship and feel like a start-up again with our new product.

The challenges for women are completely different from those of men. While I was running those businesses and was pregnant, as the leader of the project it was a minefield trying to take on staff who could hold the fort while I was away, or even believing I could afford staff while I was away. The Government has many policies, such as the latest Momentum scheme which encourages other entrepreneurs to start businesses to take long-term unemployed people and turn them into entrepreneurs. This is where my debate on entrepreneurs begins. Why do we want entrepreneurship? It is a word which embraces much and which many do not understand. Do we want people who cannot find a job to work for themselves? Is it because people have a desire to be innovators and want to work for themselves? The male-female issue does not catch us at the beginning, rather it is the reason we want people to be entrepreneurs.

According to the lip-service, people become entrepreneurs because people believe they can work for themselves and do better. However, for some people, after this recession, there is no choice and entrepreneurship is the only path open to them because no employment matches their skill sets and they need to be retrained and given an opportunity to go back out and work. While the Momentum policy of taking lots of entrepreneurs off the long-term unemployed lists is brilliant in one way, if there is no other funding available to an unemployed person the guaranteed way for him or her keep all benefits is to become long-term unemployed and stay with his or her long-term benefits for two years after having successfully completed the course. This is not an equal treatment of entrepreneurship. A person who leaves a job and sets up a business gets no benefit, reliefs or rewards for the risk. Yet we have policies to take a different section of society, turn them into entrepreneurs and fund them to the tune of €40,000 per year.

I have been on the board of the local enterprise office, and the enterprise boards before that, for a long time. I also sit on corporate boards. We see a large female participation rate on enterprise boards and yet the reality is that we still see 60% to 70% of these businesses set up by men because they are export growth. For the Irish Exporters Association, that is a perfectly valid remit for the enterprise boards. The reality is that women coming into these enterprise boards want to set up lifestyle businesses and not all of them want to export. There are no supports for them on the ground. They set up lifestyle businesses because we have the babies and need nine months out to bring a child into the world and then we need time off afterwards to bond with the child and be with it. The reality of modern family life is that mammy is still the centre of family life. We cannot have mammy the entrepreneur and mammy the full-time carer. It is not realistic because, unless one has an amazing family that is willing to support entrepreneurial adventures, we cannot achieve it. There is no child care that suits the hours I work. I leave for a week to go to the United States because the reality is the business needs and there are 70 jobs at stake. I must find child care that suits the father's lifestyle and my lifestyle in order to make it happen. I get no help and no support. If we want female participation, we will have to address this.

For every job a female creates, she does it as a last resort. The evidence shows the last thing women do is recruit. It is hard enough being responsible for oneself and we force ourselves to recruit thereafter. The supports women need are not necessarily financial but could come in many ways. There is a huge amount of mentoring and there are so many things open to me as an entrepreneur. Enterprise Ireland, the Irish Exporters Association, the British Irish Chamber of Commerce and others offer support and facilities. There is a huge amount of networks available but none of them get to the fundamental point that I need help and support with my children when I am away. It is a reality that is obvious but often we talk around it by pointing out the good crèches. Tax breaks are available to crèches but not to the parents. There are facilities for children to be minded in formal, 9 a.m. to 5 p.m. arrangements but in the modern 24 hours a day economy those hours do not suit. I cannot have a crèche closing at 6 p.m because I might not get home until 10 p.m. I need a different environment and I need to be able to employ people in the environment who are formal child care workers and not in the black economy. I want to be able to recognise them and support real jobs rather than taking my family and friends and support an economy that exists elsewhere.

I have suggested looking at the local enterprise offices and committing to export businesses. It would be of great support to be able to widen the net rather than turn away applications from people who want to open hairdressers or lifestyle businesses in their communities. We cannot turn people away when we are the place of last resort. There are no banks and there is nowhere else to go other than family and friends. There is no State support. Other than the Government running a dual system of encouraging the long-term unemployed back, while retaining their benefits, people who walk in and want to genuinely set up have no incentive to do so. A phrase mentioned to me early in my career was that big risks require big rewards. Everyone in the economy, after the boom we have just gone through, assumes an entrepreneur is off making gazillions in Silicon Valley. Technology is only a tiny piece of this. As a woman in tech, I find it frustrating that, although I do not programme, without technology we could not have created the unique product we have. We are the only people in the world to have written software to do things where we are doing it.

I do not have a degree in technology, nor do I need one. There are enough resources in the community for female entrepreneurs to be able to employ the talent they need. What I need as a female in tech is not to be told that I must do an IT degree and mathematics. We need universities and support in technology but not necessarily in coding. We all have CoderDojos and we are trying to encourage young girls. I have two girls and one boy and they are not interested in going into a room of men and coding.

It is not their environment. It is not where they want to be. It is not where I want to be. My skills are people, human resources and sales.

Women's skills do not necessarily reflect the mathematical nature of men's skills, and we should not be trying to create a community of female technology entrepreneurs. I have female friends who code. They are not the majority of my female friends. My female friends are going to the National Digital Research Centre, NDRC, which has a fabulous concept that teams them up with a programmer. All the skills they need are met but they do not have to be the source of those skills. We have to consider that women’s role in technology is not as it has been traditionally seen, that if every girl had a science degree and a technology degree they would all be coders and the world would be brilliant. That would be forcing square pegs into round holes. As soon as we recognise this we can embrace the talents women do have. Every piece of technology needs a sales person. Every piece of code requires somebody to sell it, negotiate it, and recruit the staff. There are many skill-sets around this that we are not harnessing in women. As long as we keep throwing money at coding and trying to force women into technology in a way that suits a traditional model it is time to change that model. It is time to stop trying to compete with Silicon Valley and bring out one woman in every 100 and say there is one woman who can code and do this. There are plenty of ways to work in the technology sector that do not require this skill-set.

I would like to see a broadening of skill-sets in the universities. Start recognising there are many support services that degree courses could be built around. The fashion at the moment seems to be the more mathematics, science and coding courses we can get our hands on, the better. There is no sales degree course, unless there might be one in Dublin City University. There is no direct sales course for women in technology that we could start to harness. These are real ideas that we could implement very simply. Female participation could be increased not by the current narrow definitions but by putting women into technology and into a sector where they can be part of the game but not the game politicians see and have been building policies towards.

My daughter will go for higher level mathematics. She is struggling to sit in that class. We barely got her through junior certificate higher level mathematics. She is staying in that course because we were warned that with 25 extra points even if she gets a D in her honours maths that is far better than an A+ in her pass maths. We are rewarding the wrong policies for these young women. That is the case from education through to employment. We do not recognise that women bring a different set of skills to the game. They are not necessarily the skills on the table before the committee. I have many very successful female entrepreneurs as friends and colleagues. Our problems are unique but not to women. They are unique to each business as we face our challenges on the road ahead. We do take on probably more than we should as females. Our genetic make-up is flawed. Our mothering nature will always mean that we are more likely to drop our job and dash home to our children because that is way we have been built, not because that is the way the world has decided it will be. It is my choice. Yet, policies reward the wrong behaviour, so at junior and leaving certificate levels the points system encourages us into something. Why not give 25 extra points for English? A command of the English language is useful in a sales job. Why did we take mathematics? It is because we are building a world that is trying to create programmers and people who think technically.

When we get out into the business world and employment, as an entrepreneur I compete. I lost a staff member recently to a very big multinational. This staff member was a key part of our organisation but Oracle doubled her salary. As an entrepreneur I cannot afford to compete in that world. Multinationals in this country have a lot tax breaks and I have to compete in that market. I am part of the world they exist in. I am sore that they get lots of tax breaks and rewards for creating employment and I get none. I am penalised with an extra 3% in universal social charge, USC, if I break €100,000 in my salary. I am penalised for no pay as you earn, PAYE. If I fail, I get no tax benefits and there is no social welfare net to catch me. I am sore about that. If I had been an employee and chose to take myself out of employment and put myself into entrepreneurship the best route to market is to remain long-term unemployed so that I can maintain my benefits for a further two years to encourage that entrepreneurship.

At every point it has been designed for me to fail as a female. Politicians have done nothing with consistent policies to take it from one end of the game to the other to encourage me to want to work for myself. Yet, in not doing so, the skills I possess may never reach the market. All the women in the generations before and behind me have been met with policy after policy with no joined-up thinking except for men and it is a different world. It is as if we had two standards with one for the behaviour we are trying to get. It is like trying to get orange juice out of an apple and honestly politicians are failing and failing miserably.

What I am suggesting today - I would be happy to take questions - is that we actually go back to the beginning to the school system and we work from education right through to employment. Members recognise that in the real world, as an entrepreneur, I compete with multinationals. They get all the breaks; I take all the risks. They get all the rewards and I get all the pain. When they fail they lose nothing - they lose faceless money. When I fail, I lose everything. I lose dignity. I lose respect. I lose my confidence. I lose everything. Starting again in this country once one has failed is not the easiest place in the world. So until politicians start to reward my risk as a female and introduce work policies from beginning to end, women will not to participate in that. They will opt to stay an employee in a safe job with a multinational and we will lose all the innovation and job creation that goes along with that.

Photo of Mary WhiteMary White (Fianna Fail)
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I thank Ms Byrne for that. One could hear a pin drop in the room when she was speaking. I know Mr. Hugh Kelly from his oration at the Irish Exporters award gala dinner. He is an excellent public speaker. I thank them both; it was really fantastic. My colleagues and I are looking forward to working with them both and also with Mr. Simon McKeever.

When Connie Doody and I started Lir Chocolates in 1987 in no time at all we came up against this thing about the multinationals, particularly in the years from 1989 to 1992. Multinationals were paying huge salaries to people coming from the food industry and from universities. We could not compete with those salaries. I identify with Ms Byrne completely. I am talking about the late 1980s and 1990s. We could not compete with the salaries the multinationals were offering to food graduates.

The downside was that we were getting a second or third tier, who could not do it as Connie and I could do it. So we ended up doing all the key management functions ourselves because we could not afford to pay the high rates that the multinationals were paying to super-duper people. We had to do everything ourselves and that is why we had to work 24/7, but it was a pleasure.

I got a thrill seeing a person getting a job, thriving in it and developing social skills. I saw with my own eyes the human tragedy of unemployed people coming to us. There was huge unemployment then as we had up until recently. There was 40% unemployment in some parts of the country in the 1980s.

We ran a matriarchal company. We interacted with the staff. They worked as hard as we did. If we saw one who looked a bit tired we asked, "Do you want to go home?" We had a woman's way of doing it. That was the very positive aspect. However, we definitely could not recruit people into management functions who could do it as well as Connie and I could because we could not compete with the multinationals' salaries.

Photo of Peadar TóibínPeadar Tóibín (Meath West, Sinn Fein)
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That was a very powerful presentation from which I have learnt a lot. My first question is on general exports. I have read that Denmark has ten times more exporting companies, both FDI and local, than Ireland has even though it has a similar economy. I ask the witnesses to cast some light on that.

The witnesses are right that FDI is given a competitive advantage in this State over indigenous businesses.

That is a policy-driven outcome and has not happened by accident.

I agree with Mr. Kelly that risk aversion is rewarded in this country to a certain extent through the lack of social protection for sole traders, especially. Most people who evolve as entrepreneurs do so having started out as sole traders, who are even more exposed. Has the Government in discussions with the IEA given a reason for not creating the safety net for the self-employed that PAYE workers have? I regularly meet people in my clinics who say they would not want to be self-employed again because they were toasted previously and there is nothing for them.

With regard to child care, can Ms Byrne point to an EU model? Would this involve the provision of 24 hour care? Child care is provided 24 hours a day in some states and if people work shifts or difficult hours, they can avail of this.

Capital gains tax is an important issue for self-employed people. There are two types - employment-related and speculation-related. Can they be separated in order that the Government could promote the lower employment-related tax rate?

One of the major arguments is that the State is incentivising individuals to go down the technology route. A reason for this is the major staff shortages worldwide in technology companies. Ireland can compete in this area because other countries cannot provide people for those roles. Traditionally this was one of the reasons we incentivised students to progress through technology. I acknowledge Mr. Kelly's comments about a points advantage for, say, English but while that benefits the individuals who receive the education, it may not necessarily lead to the challenges faced by the IDA when technology jobs are attracted to the country being addressed.

Mr. Hugh Kelly:

I am no expert on this but I understand the reason for the differences with Denmark is the tax issues we have raised, which do not disincentivise the market. Linked to that and the capital gains tax question, it is also my understanding that in Germany, for example, where they have managed to build a fantastic family business culture, a business of any size can be passed on without suffering a penalty. That is not the case here.

The Government has not given a commitment regarding the safety net. I have not come across any mention of that.

As an employer, at one stage I had 12 staff and three were on maternity leave. I was, therefore, down 25% of my staff. Female entrepreneurs come out of the experience of working for other people. I hate to say it and most people do not say it out loud but there is a worry as a small business about taking on women who may have children. One wants to be supportive of the family. I have a family and I understand the role my wife plays and how important it is to the family but the lack of support for businesses with ten or fewer people when staff go on maternity leave - which is for a long time and this is positive - is a significant difficulty for the owners.

It is an extra challenge when one competes against much larger employers who have the resources to sustain and weather gaps that result from maternity leave. It is an important challenge that must be overcome. If some businesses do not take on female employees it will cut off the future supply of female entrepreneurs.

Ms Nicola Byrne:

I shall answer the questions in a different order by first dealing with the query on capital gains tax.

In terms of capital gains tax, it was assumed that entrepreneurs earn enough to pay the tax. One cannot make that assumption because 50% of entrepreneurs here barely cover salaries for their organisations and capital gains tax is not the place to start to provide help. The assumption relates to the old myth that entrepreneurs make so much money that they can afford to pay capital gains tax. One does not have to separate taxes between speculation and employment. A problem will not arise because there are so few entrepreneurs in that bracket. The big four accountancy firms can fix it for the Government but in the real world all the small accountants prepare accounts for small businesses.

I suggest help is provided by way of tax in the PAYE system. I also suggest giving an employee grant for every employee taken on which might allow an entrepreneur to pay oneself. Typically, an entrepreneur pays everybody else first and themselves last. The chance of earning enough to pay capital gains tax is low. By the time one has paid back a bank loan, paid PAYE, and paid employer's PRSI and everything else on top of that there is nothing left to pay capital gains tax on.

If the Deputy was referring to large entrepreneurs that employ 150 people or more and make money - which are few and far between in this country - then I would say, "Fine, you are in the right bracket". For the entrepreneurs that I am talking about, very few of them will make it into that bracket.

The definition of technology is too narrow. Government policy says we cannot attract jobs but it should dig down to what those jobs actually are. I reside in EastPoint Business Park and can see every multinational around me. I work in the heartland of Enterprise Ireland, which is located in the midst of all of its employers, and know there are not too many female coders even in such a place. For the ones that are there, the definition of technology has become so narrow and comes down to coding. It means that all the ancillary skills that I would deem to be technology have been written off into some other category as marketing, branding, public relations or whatever. The definition of technology is too narrow and is the Government's mistake in terms of future jobs.

The next item is 24-hour child care and supports. The problem with Ireland is that we have a very small population. Before I came in here I read in a newspaper that Ireland has one of the highest fertility rates in Europe at 1.99 and that Germany's fertility rate has hit 1.6 or 1.4 but is declining even though it has one of the best child care systems around. The issue is a tiny bit more complex. The fairest way is to sort it out at each family's level. Everyone's circumstances are unique so it would be fairer to give people the money and let them decide what kind of child care suits them best. It comes back to giving help to the individual at source.

Ireland's small economy would not suit a one size fits all child care system. It would not suit the small business owner in Tullow who has no child care facility available. It would also be unfair to say that someone like me, who lives in a large urban area, has a choice of child care. One must bring the measure right back down to the individual. It would not be difficult to link child care provision with maternity leave. In this country once a birth is registered one is sent the children's allowance so everything is connected. There is nothing to stop the Government saying: "We know a child has been registered because we have sent social welfare and children's allowance." There is nothing to stop the Government linking a child care payment because it knows that a person with a child needs to care for it. If I can prove I employ people then the Government may be able to increase the allowances thereafter. If a payment is given at source then a person can choose how to handle child care. The Government would not be giving me money for nothing; it would be giving me money because I can prove that I want to create jobs and to employ people.

We must dispense with the mentality that entrepreneurs avoid tax, live in the black economy and do not do anything. There is a professional category of entrepreneurs. Whether they are sole traders moving into creating employment or not, it is easy to find out the information, particularly for female entrepreneurs. The Government will know when a female entrepreneur has a baby so it is not difficult to follow the system along. The system is well capable of doing so at this point with the technology that is in place throughout government and it is not a mystery.

The other queries were covered by Mr. Kelly.

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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I thank Mr. Kelly and Ms Byrne. We nearly have the document written. Mr. Kelly and Ms Byrne have put into words what many of us believe, but then it goes to officialdom. Perhaps we might bring them back when the officials are before the committee. Mr. Kelly challenged us to show, rather than tell, how good we were. What exporting country does he see as being the model for sustaining entrepreneurship and providing support for start-ups?

I agree absolutely with the views of Ms Byrne on there being no support from local enterprise offices for what she termed lifestyle businesses. The argument relates to displacement. If I was to set up a company called 118901 beside Ms Byrne's company with the support of Enterprise Ireland and so on, she could justifiably say it was unfair competition. The same applies to other industries. What is Ms Byrne's view? Would she let the market win?

We have made this point before, but I am keen to tease it out a little. Ms Byrne said there was no such thing as a sales course or a course in selling available in Ireland. Will she expand on that statement? Is there nothing on offer in the institutes of technology on how to sell?

Ms Nicola Byrne:

I know of one course that has emerged recently in DCU and understand one college is offering it. I know this because I went looking to see if I could send staff members to attend such a course. I was trying to recruit sales staff and looking for a course that would offer me a channel or pipeline. I went on an exploratory mission to see what I could find, but there was nothing available at degree level. Recently, a course has become available as an add-on or an adjunct. There are numerous modules, in which sales is included, but there was nothing available focused on selling. It is just one of those things in a nation like ours which relies on exporting its people, as well as services. As we all have them naturally, there may be an assumption that we do not need to learn such skills or qualify in any meaningful way. I will look up the exact details. This was the case one or two years ago and it is my recollection that there is only one degree course which is run in DCU. I could be wrong and things might have moved on subsequently, but at the time there was no sales course available. I was fascinated and a little shocked to learn that it was not a skill we associated with degrees. It is a skill that is necessary in every business. I had thought the most obvious thing in the world would have been to provide such a degree course.

Deputy Dara Calleary referred to displacement. I do not think it is displacement. What happens is that we have people who have no job and no ability to create employment. The market could sustain some fair competition. It is said the best way to set up a business is to take an existing business and do it better. That is the rule of thumb. If I was in a room full of people learning about entrepreneurship and asked whether they should invent something, I would tell them to take an existing business and do it better. The idea is to open a shop next to another or a hairdressing salon next to another because that is what constitutes market forces. Setting up a new business in a field ten miles away from the nearest business is not the solution; we need to create healthy competition. If we are to stay competitive and keep prices down, the more competition we can bring to the market, the healthier it will be.

I do not think it is unfair. However, it is unfair to build a nation in which there is no equity or humanity so as to leave people unemployed and at home without dignity or telling them that there is nothing we can do for them and that they should figure it out for themselves. We should respect the fact that we can actually share the country together, as opposed to leaving a cohort of society disadvantaged, unemployed and sitting at home. Many people would have a go at something if the risk of failure or losing the dole and so on was not as great. If that were the case, we would have completely different behaviour, but that is a personal view.

The third question was about exporters. I will allow Mr. Kelly to answer that question. I will pass on the hard questions posed.

Mr. Hugh Kelly:

In Europe, Denmark and Germany are generally looked on as good models, while in Asia we think of Singapore. We need to draw a distinction between entrepreneurship and sustainable entrepreneurship. The Irish have proved that they are entrepreneurial. We need only consider all of the entries in the BT Young Scientist competition and so on. We are entrepreneurial and great inventors. The problem is sustaining it. The problem is not in selling or giving it away to multinationals; we should instead be the inventors. I am keen to see Ireland become a country in which we can build a business, pass it from generation to generation and provide long-term employment, rather than one in which, if a person is fortunate enough to have equity in an idea, he or she will get to the point where his or her primary concern is the rate of capital gains tax on its disposal.

I prefer to see one incentivised to keep it.

I also wish to comment on sales courses. I, too, have struggled to find anybody with good sales training. There appears to be a believe that we have the gift of the gab in this country and there is not much more to be taught. It is a science, especially as we move forward with the use of technology. There is a cultural issue with getting people to go on sales courses. I recall when I eventually saw such a course launched, it was a sales management course. It was as if everybody was above a sales course and it would have to be a sales management course. We must have selling courses. I give credit where it is due to Enterprise Ireland in terms of export selling. It runs some excellent courses in export. I believe they are called "Excel at Export Selling" sales courses and they are very good, but we must conduct such courses for selling domestically as well. The same science applies. The courses through Enterprise Ireland are only available to indigenous Irish exporters and their staff.

Photo of Feargal QuinnFeargal Quinn (Independent)
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I thank Mr. Kelly and Ms Byrne for their presentation, which was very interesting. Ms Byrne speaks with a powerful voice to express herself very well. I was a little concerned to hear the comments that there were tax breaks for multinationals, but not for nationals. Will she elaborate on this and explain it? Certainly, I got a jolt when the Minister, in the middle of the Budget Statement, referred to the different tax rates and said that the highest tax would be on the self-employed. It appeared to be a discrimination. It is almost telling people to stay with their nine-to-five jobs because there is a discrimination against them should they open their own business. That is something we must confront.

The other matter that jolted me was at the beginning of Ms Byrne's contribution. When she said that women have babies and families and men do not, was she suggesting there should be a positive discrimination against men or in favour of women? I am not sure if it is the case but there appeared to be a danger that she was saying that.

Ms Nicola Byrne:

I will cover the universal social charge, USC, because that is the one I almost took personally. Over the years our business has gone from 110 jobs to approximately 70, and there are many part-time workers included in that. When the USC was announced, I thought the Minister must be kidding. It is as if he segregated a part of society and said: "You have worked your butt off for eight years and you might get to the point where your salary might just barely tip that". Then I thought of my 26 year old employee who might go off to earn close to that figure as an employee for a multinational. However, I have taken all of this pain and risk, but the Government goes out of its way to create a category that targets just me. I thought, "You must be kidding me".

The Government's policy is for the IDA to bring multinationals into the country. We seek to put packages and deals together to entice them to this country to create the jobs. We need all of that and I am not seeking that we discriminate against it. I do not wish to have anybody remove anything we are currently doing. However, the Government must be realistic. It expects 10% to 15% of people to employ themselves in this country - there are 700,000 people who work for themselves - and that is a large amount of the population. It has basically told them that there is a tax just to attack them if they earn more than €100,000 and are working for themselves. At the same time, the IDA is going abroad and bringing in business with millions of euro worth of tax breaks and lower cost premises, on the basis of a guarantee of 2,000 jobs. One must wonder why one has been discriminated against. One is a citizen, one has paid taxes all one's life and one has done nothing but work. One pays tax into the tax system, pays one's VAT returns every month, pays one's PAYE and so forth, then the Government introduces a special section just to get at that person. I have a big issue with all the Government's policies to tax self-employed people. It is not just USC, but a rake of things such as no pension, no health cover and no unemployment benefit after it all fails. I do not understand the reason for it.

With regard to positive discrimination, I would love to tell the Senator that I am equal to a man.

I would be the first to say I am, but I think I am even a little better. The reason I say this is I have three kids and believe I can do something no man can do and that this is quite special. This is not because I chose to be the female, but because I am a female. It was not a choice; I was born this way. I believe this is a gift I have been given. I cannot change my nature. I would love to say: "There is my child. Please breastfeed it." I would love to hand it over and let somebody else do it, but that is not possible in the real world.

I believe I need a little positive discrimination that recognises it is not that I do not have the brain capacity to be a super employee, super entrepreneur or super mother, but that I have made a choice to try to do something a little different and to push my limits out a little further, a by-product of which is that I create employment. I would like to see some positive discrimination because I have taken the effort to take that risk and would like some reward for that. I would like it to be acknowledged that I am not a multinational and that from nothing, I have had a payroll for 70 people for the past eight years. I would like this to be acknowledged in some way. Therefore, I would like some positive discrimination.

At the beginning of this meeting, I was not advocating for that, but now that the question has been asked, I believe all females would like some positive discrimination. That would be very nice.

Photo of Michael MullinsMichael Mullins (Fine Gael)
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I join in welcoming Mr. Kelly and Ms Byrne. This has been an interesting exchange and it is important they attended this committee to highlight some of the issues we should focus on. I support them strongly in their grievance that self-employed persons would be penalised if they earn more than €100,000 while somebody who works for the State or a company and earns a salary of over €100,000 is not discriminated against in the same way. There is no reason this should happen and it is certainly a disincentive to people becoming entrepreneurs. We want to do everything possible to promote entrepreneurship and to encourage as many people as possible to take that risk.

Following the collapse of the construction sector, many of those who had taken risks and employed significant numbers of people found that following the collapse of their business, their employees were in a position to get social welfare while those who took the risk and put their livelihoods and resources on the line got nothing from the State unless they were almost destitute. After being means tested some of them got some employment assistance, but if their spouses were working, there was a limit to what they could get. This issue needs to be addressed.

The witnesses mentioned there was no support through the LEOs for lifestyle businesses, but pointed to the fact that somebody on social welfare who was starting a lifestyle business would have their social welfare payment protected for up to two years. Can they suggest how that anomaly might be addressed or how it could be dealt with?

Ms Nicola Byrne:

I am not sure. There are so many solutions that I am not sure one solution would fit all. With the MOMENTUM programme, the Government is doing a superb job and hats off to it on that. The people involved are incredible. For many of those who were involved in construction who have found themselves unemployed, this is their opportunity to go back and follow a dream they have always had. These people are motivated and determined to create employment for themselves.

With regard to people who want to work for themselves and to make that worthwhile, the reason the situation is more complex for women is that if they are home with their child, whether a single mother or not, and decide they want to return to work, the complication of child care has a particular effect on that person.

They have been at home and have to make a significant choice. Going back to work without a safety net and losing all benefits immediately is not viable. Bills have to be paid. For males and females, it is very difficult and if one does not put a safety net in place, people will not show innovation and will continue to live in a welfare context that encourages them to stay in it rather than to leave. The solution is a mix of child care services, tax reliefs and supports. It is not a simple solution because people who have jobs and whose taxes are going towards paying for this may look at it in a very negative way. They will say they have taken jobs all their lives and taken no risks but now see their tax money being taken to pay for the person mentioned. However, everyone would benefit as a member of society. When there was full employment, we had a vibrant and rich economy. If we could recreate it, the tide would rise for everybody.

There is a danger that after the Celtic tiger, we have castigated everyone, not just those who took silly risks. Not everyone went off on the construction lunatic risk tangent. There were some very hard working people who, through no fault of their own, lost their businesses because of the downturn in the economy. We cannot brandish that one brush across everybody's failures. There are different types of failure and different reasons for it. The problem is for people sitting on the outside having never taken a risk in looking at what they consider to be all of these cowboy entrepreneurs. They often risk everything for us, but they are branded in the same way when it is not true. There are some really amazing entrepreneurs who were hurt and never had the chance to take their talents back out again as there is no safety net and no way to put them back out. A multidisciplinary approach to solving the problem is required.

Photo of Marcella Corcoran KennedyMarcella Corcoran Kennedy (Laois-Offaly, Fine Gael)
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I thank Mr. Hugh Kelly and Ms Nicola Byrne for their contributions which will be very helpful to Senator Mary White in drafting her conclusions when completing her report. Obviously, we will all have an input into it. I thank the delegates for attending to represent the Irish Exporters Association.

Sitting suspended at 2.52 p.m. and resumed at 2.53 p.m.