Damien English (Meath West, Fine Gael)

It is a pity I was not in before the Minister of State because I also wish to speak about small businesses and SMEs. This area should be a major focus of the Government with regard to job creation, particularly over the coming years. I know we have had successes but we have not had enough. I am glad the Minister of State mentioned it because I totally agree with him. This is where we will solve our job problems and create many jobs.

It is true that many opportunities for job creation could and do exist within the SME sector. Unfortunately, several unnecessary barriers to expansion block any such job creation prospects and these need to be tackled. According to a recent ISME survey, business confidence in Ireland has plummeted to a four year low. Yesterday, the Taoiseach spoke about confidence in the country. We have problems and we must recognise them.

Small businesses, particularly in the distribution, retail and construction sectors are markedly less optimistic about the prospects for the economy than they were a year ago. The slowdown in the housing market and construction sector and the continuing erosion of competitiveness are certainly feeding the mood of gloom. We need to restore their confidence with a new strong Government with a new game plan to tackle the challenges and problems with real targets and solutions and not just with fancy PR.

These problems include the cost of doing business, problems with local government, red tape from European and national laws and planning delays on which we had a good discussion previously with the Minister of State. I am glad the Minister of State is willing to discuss this with committees because major problems exist which we need to fix to open up opportunities for small business. Other problems include levies and charges on people, infrastructural problems with roads and bridges, parking problems in towns and the cost of buying a site at which to conduct business. The lack of grants is also a problem for many small businesses. The enterprise boards do great work but only in certain sectors.

Many people with good ideas for job creation do not get the chance to enact them. We need to expand the grants available to them or at least to give them more incentives such as fewer rates, taxes and charges in the first three or four years. The Minister of State is a businessman and he knows the first one or two years in business are extremely difficult, particularly when one begins to pay tax 18 months down the road. This is when cash problems hit. If we are really to help these businesses to create jobs this is where we must do so.

I mentioned high costs are a barrier. The cost of doing business in Ireland has increased significantly due to a mixture of high inflation, strong growth in wages, in particular public sector wages, increases in the cost of State and local council services and a greater burden of regulation. As the cost of doing business rises, the cost of expansion and growth rises. Without expansion and growth we will have no increase in employment levels in Irish SMEs. In fact, unemployment will continue to rise.

What has been driving Ireland's high rate of inflation? The cost of water, refuse and miscellaneous services increased by more than 200%. The cost of electricity rose by more than 50% and motor tax by almost 30%. The list goes on. All of these prices and increases can be fixed by Government because they are related to Government and local government. We must hone in and try to make major changes urgently. To do so will mean tough decisions being taken by Government. I believe people in the Government can do this and our job will be to force them to do so. To continue to put heads in the sands and deny there is a problem is wrong. We need a new and strong plan to fix these problems.

With regard to infrastructure, apart from roads, rail and bridges, broadband is a key area for job creation. It is an area in which the Government has failed. We have not moved as fast as we should have. Ireland's broadband penetration rate is only 17.4% according to the EU's information society and media department. The EU average is 20%. One might suggest that 20% would be good enough and our previous aim was to attain the EU average. This is not good enough when we see other countries such as Denmark which is at 35.6%, Finland at almost 35% and the Netherlands which also has 35% penetration. France is higher again. We are behind in this area and it has serious effects for business, particularly the small business sector, as well as for education.

The roll-out of the metropolitan area networks, MANs, nationwide has been extremely tardy and instead of the Government stepping up its investment in this, it has delayed the roll-out of the second phase until it reviews the first phase. It is always about reviewing, waiting and pilot schemes. We need to move forward.

Today's news is dominated by one story. However, other news stories are in the newspapers today. In today's Irish Independent, John Mulligan rightly points out in his review of Ireland's broadband offerings that the MAN review is due for imminent release. However, the networks essentially replicate existing Eircom infrastructure. Where is the Minister for Communications, Energy and Natural Resources planning to go with this MAN scheme? When it is in place we must ensure local and home-based businesses can tap into it and use it. It has not moved quickly enough and now seems to be only following Eircom. I know in some cases, Eircom has followed the Government with regard to its plans and where to go with broadband but we must tackle this.

It is time to up the game with regard to the penetration, speeds and cost of broadband in Ireland because if this Government does not act, vital opportunities for start-up businesses and job creation will be lost. Many existing companies will not be able to expand without this technology. New job opportunities will be missed. This debate encompasses many other areas. I concur with the Minister of State that we must focus and do all we can to help Ireland's small and medium sized businesses. They are the backbone of society.

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