Phil Hogan (Carlow-Kilkenny, Fine Gael)

As everyone knows, Ireland needs a competitive indigenous business base if we are to return the country to a secure financial footing. Our SME sector is facing serious challenges but is vital to the health of both the national and local economy. Our small businesses employed more than 800,000 people in every town and village in the country before the worst of the of the current crisis hit. They are valuable members of each community, they provide employment for local people and put back money into the local economy. They also contribute billions in tax to the national finances every year. The current crisis has hit them hard with scores shutting down and many people relying on social welfare payments. This motion is about trying to redress that balance and seeing what we can do to keep costs low and to protect employment.

The Government and local authorities have an obligation but action is needed, one way or another, to keep these viable businesses open. In the past year, the financial institutions have been largely responsible for neglecting the type of additional assistance required to keep small businesses afloat. Fine Gael and other Opposition parties have called on the Government to ensure the vital blood flows to the system so that businesses are kept afloat. Financial institutions must be forced to grant overdraft facilities and finance for purchasing stock so that the shop door stays open.

The motion calls on the Government to ensure that we do not do any more damage to indigenous businesses. Retail receipts have collapsed and the Government has maintained or hiked up charges and costs to business. Surveys published by the Central Statistics Office in the past month indicate that Government related charges are going up while market driven charges are going down. We recognise that Government must cut costs to survive the current financial crisis, but so must businesses. If there is to be a genuine upturn in the economy, our businesses need to be well placed to take advantage of that.

The lack of access to finance and credit continues to suffocate successful businesses which need only a helping hand through this precarious period. The National Asset Management Agency proposal does nothing to get credit lines restored to businesses in the short or medium term. The fear of most people is that when the taxpayer has contributed €11 billion of an investment into the banking institutions this year, with a potential investment of much more through NAMA, the banks will say, "Thank you very much" and will protect their shareholders and the banking institutions but will not look after their customers.

Irish economic competitiveness continues to slide as the sand on which we built our economy continues to crumble. In 2000, the Global Competitive League rated Ireland as the fifth most competitive economy in the world. Last month, they further downgraded Ireland to 25th position. The warnings given by the National Competitiveness Council and by Opposition parties about the need to place competitiveness high on the Government's agenda were ignored in the past seven years. The lack of access to finance and inefficient Government bureaucracy are serious problems which have accentuated this issue for business in Ireland.

In past years, there was a temptation for local authorities to balance the books by increasing commercial rates and to use them to pay for new goods and services while there was no urgency about imposing efficiency standards or any type of reform. Since income from building levies collapsed local government faces serious financial difficulties. All Members of the Oireachtas have been brought before our managers and directors of services in recent times and we know that development levies have dried up and that the difficulties local authorities are experiencing in collecting the commercial rates they are owed is a serious problem and that there is likely to be a shortfall by the end of 2009.

If we blindly increase building rates to balance the books, we merely prolong sustainable economic recovery as our businesses struggle. To restore competitiveness we need to lower business costs to help them through the recession. Our businesses already pay some of the highest energy costs in Europe and are burdened with unnecessary red tape and bureaucratic road-blocks. These issue have been raised on numerous occasions by Deputies but the Department of Enterprise, Trade and Employment has yet to come up with a response.

While Fianna Fáil was part of the problem, we must now look at what will be part of the solution. This week, I had the opportunity to meet the Fine Gael council group leaders and I asked them to agree motions at all local authorities to advance the proposal of keeping commercial rates at their present level for the next three years. We need to take action such as that if we are to give viable businesses the best chance to survive the current economic downturn. Then we can all look to a more stable and prosperous future in the years to come.

Tonight's proposal is not being considered in isolation. It should be part and parcel of a radical reform package of local government. As Fine Gael spokesman on the environment, I put my cards on the table last May when I outlined how we could reform local government and bring the various strands of community and public opinion into the remit of local government in order to focus every unit of local government on the objective of keeping people in employment and promoting job creation. Local government must change radically. Tonight, we outline our commitment to freezing local business rates but we cannot continue to charge and tax businesses and families at a local level without fundamental change to how local government works. The Fine Gael plan to overhaul local government will devolve power from the centre to the local and empower citizens with a stake in their own communities.

Local government, as the connective form of government to local communities, is the best form of government to advance projects in a small way at local level which will lead to the protection and creation of jobs. We all know that foreign direct investment will be difficult to attract to the country in the significant levels we have seen in the past ten to 20 years. We must consider the contribution the small business sector continues to make in protecting jobs and creating employment. Local government has suffered from an identity crisis, as it lacked a strong primary mission. We must give it a new mission as the focal point of creating jobs.

There is a strong disconnect between local authorities and their respective communities. Local authorities have been sidelined when it comes to providing new services, with central Government either providing services directly or devolving power to an agency or quango. It is not acceptable that Departments are funding various groups and boards established at arm's length in the community without an accountable remit to local government. We want to see local authorities becoming the primary driver of business support and development at local level. It will involve 95 State bodies being merged or moved under local government structures, which will save millions on administration and will make a major contribution to freezing local business rates. Local authorities must play an integral role in dragging Ireland out of recession. This will involve ending the widescale duplication of services among unelected bodies and bringing them under the one roof of local government to create a one-stop-shop for business and job creation incentives. Fine Gael has also identified 53 bodies which should be amalgamated into local government, with the abolition of 42 more. This would result in an administrative saving of more than €70 million per year to the taxpayer.

We are taking on board the precarious financial situation of the country while, at the same time, looking for the best opportunities to promote business and employment. The creation of business support one-stop-shops based in local areas should be a priority. There is a massive potential to benefit the national and local economy via the implementation of this policy. If local government were directly involved in this work it would revolutionise the connectivity between business ideas and local businesses and the local people who matter. The consolidation of the many agencies involved in local government would result in taxpayers' money being saved and avoid unnecessary duplication of services.

In the Celtic tiger era the system of local government has developed into an elaborate structure the country can no longer afford. An examination of the various agencies under the remit of the Department of the Environment, Heritage and Local Government, the Department of Community, Rural and Gaeltacht Affairs and the Department of Enterprise, Trade and Employment showed that a significant amount of work could be done to row back on the expansion of some agencies and the creation of new ones. The country cannot afford such agencies at present. An independent examination of those agencies would show they are not delivering on their remit in the way we would expect.

Citizens should continue to expect the highest form of customer service from their local authorities. We have proposed simple reforms in the structure of local government to improve services to the public and elected representatives, including a special customer service unit which would be uniform across all local authorities and based on best practice. We wish to see savings and efficiencies rather than new taxes and charges. We need to restore trust at local level. Putting local authorities back into a central role in the community would result in greater community cohesion, better services, and more employment opportunities, while recognising the difficulties in the public finances in terms of Government Estimates in 2010.

We are all familiar with stories we have heard from management and directors of service across the board. Given the lack of development levies, there is a lack of funding to promote employment opportunities and investment in infrastructure and we will have to devise new ways in which to maintain service provision and jobs at local level, which is the overriding objective of this motion.

I commend the motion to the House.

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