Michael Ahern (Cork East, Fianna Fail)

I am delighted to have been given the opportunity to support the Government amendment. The amendment clarifies that the Government is acutely aware of the effect of the world-wide banking crisis on the economic activity of this country as well as globally.

The Government moved swiftly to ensure that the Irish banks did not go the same way as those in the United States, Britain and other countries. It must be made clear that the guarantee scheme was not implemented to save the bankers; it was to save the money of the ordinary people who had it deposited in bank accounts. It was implemented to safeguard the banking system, which provides the lifeblood of the commerce and the economic activity in the country. Without a smoothly operating banking system, the economic life of the country would grind to a halt.

Much has been said in recent weeks about the lack of credit. As Deputy Collins mentioned, the banks are in operation to make money and lending is one source from which they get their income but recently the banks, due to their shortage of liquidity, reverted to the strict criteria they had used for many years. In recent years they did not implement that criteria. That is what led to the crisis being experienced in the country and more so in other countries, especially the United States of America. The banks were brought out of their hold by the Minister for Finance with the guarantee scheme and they must now play their part to ensure that funds are available to legitimate applicants.

In recent years the Government has taken a number of actions to strengthen the competitiveness and productive capacity of the economy. The Department of Enterprise, Trade and Employment has an allocation of €495 million for 2009, an increase on 2008, for investment in small, medium and large industries through their agencies such as Science Foundation Ireland, Enterprise Ireland, the Industrial Development Authority and the county enterprise boards. The increase for city and county enterprise boards for the coming year is 16%, which shows the Government's commitment to those micro industries.

Last Wednesday, the Tánaiste launched Enterprise Ireland's strategy for internationally traded services which will focus on the growth and development of the services sector. It is interesting to note that for the years 2000 to 2007, exports in that area increased three-fold, the largest in any sector.

The importance of small and medium enterprises was recognised in the report of the Small Business Forum. In implementing the report recommendations, the Government has confirmed the central importance of the small business sector and its commitment to that sector. Examples of actions taken to date include the audit exemption increase from €1.5 million to €7.3 million, which I authorised as Minister of State in the Department.

The 2006 budget included a package of measures designed to help the small business sector, including the extension and radical improvement of the business expansion and seed capital schemes up to 2013. There was an increase in the VAT cash accounting and VAT registration turnover thresholds. That was to simplify administration and reduce working capital requirements in small businesses. The innovation voucher scheme was launched and this scheme provides an incentive to small businesses to explore new ideas. The tech-check programme was also launched and this programme provides small businesses with an opportunity to access a highly subsidised independent technology check-up and to help them to identify ways to boost their productivity and profitability.

The 2009 budget announced tax relief measures for start up businesses by way of remission in corporation and capital gains tax in the first three years of their new businesses. The introduction of the better regulation programme to tackle regulatory burdens would be very helpful to small businesses particularly. I commend the amendment and offer my support.

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