Kieran O'Donnell (Limerick East, Fine Gael)

I commend Deputy Perry on tabling this motion which is appropriate and apt. I want to speak on a positive note. What we need is recovery through growth and key to that is the SME sector. I came from that sector myself having set up as self-employed many years ago. We need to look after start-up companies, particularly in the export area. I have a simple ten-point plan starting with the need to foster an entrepreneurial culture. People should be encouraged to set up as self-employed rather than that being seen to be a dirty term. People should not be afraid of failure and be encouraged to take risks, which is not the case here.

The main banks, Bank of Ireland and AIB, need development wings dealing specifically with the SME sector. At the moment the banks are more interested in repairing the balance sheets and are giving no attention to SME lending. People from the private sector should be brought in to head up those development wings. There should be an ancillary board comprising representatives from ISME and the Small Firms Association, who have the knowledge and can track what lending is taking place.

The VAT registration limits for people setting up businesses need to be increased as they are too low. For goods the limit is €75,000 and for services it is €37,500, which is an excessive burden on an SME setting up. The high-level review group investigating regulation in the SME sector has only met five times in 2009. There is a target for a 25% reduction in the regulation burden on the SME sector by 2012. We should have yearly targets with, perhaps, a target reduction of 10% by the end of 2010, another 10% by the end of 2011 and 5% by 2012. That high-level group should meet on a monthly basis.

There is an exemption from corporation tax for people setting up as self-employed for the first three years. Most self-employed people set up as sole traders. There is a major burden of having to be audited and they worry about being directors. From my experience as a chartered accountant, people would only establish companies when their tax levels were sufficiently high to justify it. They should be exempt from tax for the first three years.

Deputy Fahey spoke about funding to be provided by Enterprise Ireland and IDA Ireland. The funding to the enterprise boards was cut in the past year. As start-up companies get their funding from the enterprise boards, funding must be given to that area and proper mentoring must be put in place. Based on what I saw today, a venture fund should be set up for start-up businesses to allow risks to be taken with them. At the moment the self-employed are entitled to virtually no social welfare benefits; they do not qualify for FIS or job seeker's benefit because they are on an S stamp rather than an A stamp. We need to find ways to get people in small businesses over the hump. If those points were implemented it would have a major effect on business.

We need a link between graduates and colleges and the business sector because college graduates represent the future. We have one of the highest proportions of graduates in Europe and we need to ensure they do not emigrate and that we keep them here. We need an enterprise culture to drive recovery through growth. While the multinationals are very important, the indigenous SMEs, particularly those that export must be supported.

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