John Perry (Sligo-North Leitrim, Fine Gael)

Fine Gael will think big about the potential of the small business sector to generate jobs. This week's Fianna Fáil announcement on jobs is not credible. Effectively, it means creating 1,200 new jobs per week and it makes no allowance for the huge number of job losses. The document is not credible; it just announces another new quango. The proposal to create 60,000 jobs over five years does not stack up when one considers the numbers of jobs created and lost over the past five years. Fianna Fáil has destroyed our economy, closed down the enterprise culture and destroyed the hopes and livelihoods of thousands of families throughout the country.

There is no point in the Government trying to pretend the disaster that has affected the country is the result of international factors. Fianna Fáil refuses to take responsibility or action. The Governor of Central Bank has made it very clear that 75% of the disaster now engulfing us is directly due to Fianna Fáil policies. There has been a serious loss of national competitiveness due to significant increases in the stacked-up costs of doing business, mostly imposed on the sector by the Government. Worst of all, unemployment is at historically high levels. Almost 0.5 million people are unemployed.

The challenges facing the country are enormous. Small businesses comprise the only vehicle that can kick-start job creation. Due to Government inaction, small businesses have seen their business contracts decline by between 20% and 40%.

Company insolvencies are at a record level and most enterprises going out of business are typical small businesses. Small business owners that go out of business have no recourse to social welfare benefits or protection. The same applies to self-employed people who have gone out of business. They have no support whatever and are not even documented anywhere. This represents real hardship for people who have taken pride in being active and independent contributors to the economy. Such people have taken big risks, including mortgaging their houses, and have lost everything. This is at an enormous personal and social cost. We must find a solution to this.

Local jobs have been lost in every town and village throughout the country. Owing to a record jump in the numbers unemployed, thousands of people are now leaving the country. Some 30,000 young people have left this year. A generation of young people is gone and this is appalling. Today's school leavers and graduates are experiencing the worst employment opportunities for decades. Small businesses have done what they can to survive without any Government assistance. Many are being held back from creating new jobs because of the absence of any support from the Government. As far as Fianna Fáil is concerned, the small business sector does not exist. It is not recognised at official level. Fianna Fáil regards the sector as a marginal player on the national economic scene.

The elitist attitude of this Government is such that it believes the small business sector can survive from crumbs that fall from the top down from the multinational, exporting, high-tech, smart-economy sector. The only results of Fianna Fáil's actions to date are unemployment, forced emigration, depressed economic activity and the closure of viable businesses. The Fianna Fáil Government is doing nothing to assist with the retention of existing businesses and to create new jobs in the small business sector. Fine Gael puts jobs at the centre of its economic strategy. The problems we face demand urgent and forceful action that only Fine Gael will provide. Fine Gael is the only party to present concrete, effective measures to protect existing jobs and create new ones.

It is a tragedy that small and medium-sized enterprises, SMEs — the backbone of this economy — are on the floor while this Government stands idly by. There are some 86,000 small businesses employing approximately 650,000 people. The small business sector can do its part to bring the State out of the present crisis through the creation of jobs at local level. However, it can only do so if it receives the full and enthusiastic support of the Government. As soon as Fine Gael gets the opportunity we will support small enterprise in every village and town. The small business sector is a significant source of employment, makes a significant contribution to the national economy, is domestically oriented, makes a major contribution to Government revenue income and collects a wide range of Government taxes and charges. Small business owners are effectively tax collectors.

Small business is important to the national economy and to commercial and social life in rural Ireland. It is an essential part of the supply chain for larger firms and a critical part of the support infrastructure needed to attract and retain foreign investment. Small businesses form one of the largest and most significant employer groups in the country. They provide local employment in every county, particularly at community level. Small business also plays a key role in the national development of a culture of entrepreneurship and innovation.

It is time to do something about the challenges facing the small business sector. The Government must take action in terms of credit supply, late payments, entrepreneurship and innovation, and advisory and support services for the small business sector. The Minister has said many times that the banks are offering credit, but we all know that is not happening. Finance is the lifeline of an enterprise and this is particularly true for the small business sector. Restoring the flow of credit to the sector should have been at the centre of the Government's strategy. Instead, it was largely ignored as all efforts focused on propping up a bankrupt bank. Deputy Bruton referred to a venture capitalist bank that would support small companies with a fund of €2 billion. ICC Bank was very effective in this regard in the past.

We need a comprehensive support strategy. Governments support banks who in turn support small business, and small business provide jobs in the local community. To date, however, the Government — via the taxpayer — has concentrated on bankrolling the banks. One might assume the banks would in turn support businesses, but that is not happening. If the banks supported small businesses, they in turn would create and retain jobs. Instead the Government has focused all the taxpayers' resources on the banks. Today we have signed up to a further guarantee for banks that are not doing the business.

We demand that a partial loan guarantee for small and medium-sized enterprises be introduced immediately. Despite what they may say in public the banks have shut up shop and are hoarding capital. This is putting viable SMEs under severe pressure as credit lines dry up. Many small businesses can demonstrate commercial viability yet fail to obtain loans, typically because of issues relating to risk management. The Government must immediately introduce a targeted SME credit initiative that will facilitate access to credit for SMEs. The scheme must be based on the principle of risk-sharing between the State and the banks. I do not expect such a scheme to become a substitute for commercial bank lending or to facilitate credit for companies that are not viable. It would place Irish firms on a more level footing with international competitors.

The Government should also introduce a supply chain credit guarantee facility whereby large multinational companies would jointly provide a credit guarantee with the Government for viable suppliers, partner companies and so on. This would maintain the strength and viability of their supply chain during the downturn so that they can improve their cost competitiveness and be ready for the upturn when it comes. It is time to think big about the potential of the small business sector. We must get back to an innovation-driven economy, with traditional, local small business at its heart. The economic climate is likely to drive more people toward starting their own business. We must encourage those self starters. Entrepreneurship and business development must be promoted as the fastest and best option for new jobs, economic growth and wealth creation.

Traditional, local small businesses, whether manufacturing, tourism, retail, wholesale, construction or whatever, have the potential to create new jobs. They must get as much attention and support as the smart economy. Emerging industries, including health care, biotechnology, the creative industry, green energy, post-modern agriculture and aquaculture, will be sure of high priority attention when we are in government. These segments are full of potential and Fine Gael will actively support them.

As some of the larger foreign direct investment projects retrench and close, the possibility of generating spin-offs and spin-outs from these companies must receive vigorous support. We must do more to identify sub-supply opportunities to the multinational sector for local small businesses and to work in conjunction with local third level colleges. The entire small business start-up support system must be able to respond to the growth in demand for assistance and support, both financial and non-financial. There are some supports and initiatives in place, but the small business sector needs a new strategy specifically aimed at the sector. That strategy must give equal support to retaining small business and generating new business.

In the current circumstances future small business retention must be the highest priority. The loss of a small business means the loss of jobs. There is urgent need to review the financial incentives for the small business sector and to drive new private investment in job creation through new business expansion schemes and seed capital schemes. As part of the effort to reinvigorate and grow the small business sector, one of the highest priority tasks is to upgrade management skills and management practice in the sector. Now is the best time to invest in management development for the small business sector.

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