Martin Brady (Dublin North East, Fianna Fail)

I thank the Minister of State for bringing this important Bill before the House. I congratulate him for placing the emphasis on small businesses because these usually become large businesses. We have many examples of this in the Oireachtas, such as Senators Quinn and White who started in a small way and now own major businesses. In Deputy Connaughton's constituency, Mr. Pat McDonagh of Supermacs gave a talk to members of the Joint Committee on Enterprise and Small Business when we visited Ballinasloe. It was interesting to listen to him speak about the problems he encountered along the way.

The joint committee visited Ennis a few weeks ago and we met with people who set up small businesses. One person who started employing five people is now employing 80 people. We also met students and we asked them what they felt would hinder the setting up of small businesses. Everybody commented that the bureaucracy involved in setting up small businesses is horrific. One must drive all over the country to establish the assistance available. There are agencies all over the place. We should have a one-stop shop to advise people who want to set up a small business on grants available.

There is a perception that we are only interested in big businesses and foreign investors — who are given everything — and that we are not concerned about small businesses. That is not the case. What is really being stated is that the system is so cumbersome and convoluted and contains so many layers of bureaucracy that people immediately erect mental barriers and do not proceed with their businesses. I was informed by one woman that a friend of hers opened a small business and immediately received approximately 20 letters from the Revenue Commissioners relating to various matters. That can be extremely off-putting.

The provisions of the Bill involve facilitating business development and securing our competitive edge in key sectors where it has been developed. Where possible, we should ease the regulatory burden on businesses. That is already happening here, where a flexible, responsive and business-focused regulatory system is developing. This is vitally important because, as has been stated, like all developed economies, our economy depends increasingly on services as it moves away from basic manufacturing to higher upscaled manufacturing and services. If we do not have a system which will allow people to be flexible and respond quickly to changes in the marketplace, we will lose out. I believe we will continue to be successful but we must keep our eyes on the ball.

The Minister of State and his officials have listened carefully and responded to the concerns of small and medium-sized businesses. As stated earlier, I hope he will take on board the points I have made in respect of small businesses and how they are set up.

The legislation incorporates as many recommendations from businesses as fall under the remit of the Minister of State, and that is representative of the partnership-style of Government which has been so successful for our economy over the past ten years. The most welcome development in the Bill for small and medium-sized businesses is the raising of the audit exemption threshold to the maximum allowable under EU rules, namely, €7.3 million turnover, up from €1.5 million.

The Bill will ease the additional administrative burden of annual audits for thousands of businesses and create a parity in the audit exemption thresholds with businesses in the North, the United Kingdom and other EU states. Many small businesses, such as that established by Pat McDonagh in Ballinasloe, have extended their interests to the United States and other countries. That gives an indication of the importance of small businesses and the way they can grow and spread to other countries. This also affects voluntary and community organisations, which will be relieved of the time and regulation burden of being audited because they fall under the new threshold.

The roll-back of the regulation has a symbolic significance in that the process of more and more regulation will henceforth be tempered. The important message to business people who participate on business fora, committees, etc, is that they will be listened to. The report of the Small Business Forum, published last April, recommends that Departments should formally assess the merits of exempting small businesses from new regulations, or of modifying such regulations to make allowance for the special needs of small businesses. The forum was set up by the Minister for Enterprise, Trade and Employment, Deputy Martin, and chaired by the general manager of Microsoft Ireland, Joe Macri.

Raising the audit exemption threshold to €7.3 million will ease the regulatory burden and obligation on many small and medium-sized businesses to conduct a costly, cumbersome and burdensome annual audit. This was a key recommendation in the Small Business Forum's report.

The forum also pointed out that while there are advantages in obliging companies to undertake statutory audits, these advantages can be outweighed by the enormous cost of such an audit, which can sometimes amount to between €10,000 and €20,000. IDA Ireland is committed to developing the breadth and depth of the international financial services industry in Ireland. While continuing to market this country as a centre of excellence for transaction processing, IDA Ireland is also targeting other sophisticated revenue generating activities. Existing developments in securitisation give us the potential to develop as a primary centre for specialist debt and financing products. This is in line with lDA Ireland's strategy to drive the development of knowledge-intensive high-value investments.

Business regulation in the field of company law feeds into improvements to our national competitiveness through high standards of corporate governance. This brings about a stable and predictable environment in which entrepreneurs can establish businesses and investors can invest. Ireland's economic future is bound up with the global economy through investment, trade, people and business in general. We must be at the top of the game in respect of the transposition of the two EU directives, which will bolster Ireland's competitiveness and help us attract foreign investment in an ever more competitive global market. They will also help us to encourage people in Ireland, if they are given proper assistance, to invest and establish businesses here.

I commend the Bill to the House. I thank the Minister of State and his officials for the excellent work and research invested in it. This is an important Bill and it will prove of great assistance to small businesses. It will also help those who are considering establishing such businesses and encourage young people in this regard. In my view, that is the way to proceed.

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