Paudge Connolly (Cavan-Monaghan, Independent)

My son has just discovered that; it was one of the big shocks in life.

Small and medium sized companies were among the most adversely affected by the current low threshold figure, so this Bill is significant to them. The raising of the audit exemption threshold to €7.3 million will considerably lighten the regulatory burden on small and medium sized business that currently must conduct an annual audit, which is costly in terms of both time and money. It will also help to improve life for businesses and investors by dispensing with the need for red tape. Nevertheless, it does not dispense with the necessity to maintain good day-to-day books of accounts, as required by company law. It is important that records will continue to be kept for future examination.

Small and medium sized businesses are the driving force of the economy and one cannot overestimate the importance of a healthy business sector. Recently, when examining the type of employment available in my constituency I found the emphasis had shifted from small companies producing for the domestic market to firms producing goods for export markets. Approximately 55 companies in counties Cavan and Monaghan export to world markets, with 30 of them located in the former and 25 in the latter. Between them, the two counties account for 10% of exports by domestic companies, as opposed to overall national exports.

Companies in counties Monaghan and Cavan beaver away, quietly doing their business on the world market. Both have some large players, for example, Combilift Limited in County Monaghan which operates across the world and Quinn Life in County Cavan, household names that have moved into the world market. We should be proud of them, especially given that the local economy used to be dominated by small furniture companies, small farmers, etc.

Recent changes in the business sector in my constituency were achieved without much assistance from Government agencies and can be attributed to people taking a chance. I bump into people who tell me they have been in Shanghai, Bangkok, Australia and many other places marketing their products, getting out on the world stage and doing business. If that is the case in my constituency, I am sure it also applies to other constituencies. Many of those who operate successful companies have experienced a couple of company failures in the past. It is important that the House acknowledge these people.

The House should also spread the word that my constituency is an attractive location for investment. The people of both Cavan and Monaghan have a strong work ethic and are not afraid to take a chance. Outside companies should also be aware of the constituency's good transport connections, with access to open roads, ports and airports. For example, it takes me approximately 90 minutes to travel from my home to Dublin Airport, a commutable distance, particularly when one considers the length of time it can take to cross Dublin by car. South Monaghan can be reached from Dublin Airport in 45 minutes. On the Northern side, we also have access to Belfast's airports. We should shout about these advantages.

Small businesses will be assisted by the provisions of the legislation because they will not be required to employ professional accountants to audit their books at the end of each year. By nature, an accountant will examine a company's turnover and submit a price based on the time required for his or her audit, the level of turnover and other factors. Accountants also like accounts to be well prepared and maintained. As treasurers of clubs and so forth will agree, they, too, must have their books done by professionals. It is in the best interests of small companies to ensure their books are correct, meticulous and up to date.

Mandatory dematerialisation is another positive aspect of the Bill which will be welcomed by small business. The new provision makes it mandatory to hold in electronic form stock transfer forms and share certificates. This is the way forward. In a modern and progressive economy such as this and given its exposure to the global economy, it is essential to maintain and improve our competitiveness. Holding Irish securities in electronic form will be instrumental in reducing the costs involved in share dealing and should increase our competitiveness in this area.

To meet the challenges posed by the increasingly globalised and competitive world markets it is essential to maintain competitiveness. We must protect the interests of the small indigenous companies which drive the economy and, where necessary, change laws to keep them intact.

Many Irish equities are listed on Irish and United Kingdom markets. The greatest possible degree of harmonisation in dematerialisation in both markets would be in our national interest. It is vital that the Irish market is not placed at a competitive disadvantage with the UK and that electronic processing of Irish equities is carried out in line with best international practice. In other words, it is in our national interest to bring our auditing processes into line with those operated in the United Kingdom, our closest neighbour. Britain may be a close competitor but we have a good trading relationship and depend on it to take a significant amount of goods and services produced here. We must, therefore, work closely with the UK on these matters.

The elimination of paper share certificates will have a series of beneficial effects. Trading will be processed in seconds and dependence on snail mail will be removed. It will also improve Irish competitiveness in trading securities, considerably reduce the costs involved in paper trading and bring practices here into line with current UK practice.

The Bill also makes provision for the amendment of the Consumer Information Act 1978 to permit the temporary appointment of a director of consumer affairs. Legislation to establish a new national consumer agency was promised for 2005 after the Consumer Strategy Group recommended the creation of such a body in May of the same year. This provision is an ad hoc, stop gap arrangement and will result in consumers losing out on their rights. It is unfair to ask consumers to pay. I hope the establishment of a national consumer agency on a statutory basis will not be further delayed.

A further feature of the Bill is the provision to allow for the transposition of the European Union transparency directive. Directive 2004/109/EC relates to the exercise of voting rights by shareholders of companies, having registered their office in a member state and whose shares are admitted to trading on a regulated market. It will facilitate the cross-border exercise of shareholders' rights in listed companies through the introduction of minimum standards and ensure that shareholders, irrespective of their place of residence in the European Union, will have timely access to complete information and simple means to exercise voting rights at a distance.

I welcome the Bill, which will serve to improve the environment for business and share trading. It meets the needs of small business and investors and, as such, I support it.

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