John McGuinness (Carlow-Kilkenny, Fianna Fail)

I am thankful for the opportunity to contribute to the debate on the motion because it is central to the survival of the small and medium-sized enterprise, SME, sector. It is fair to state the rates issue has been on the agenda and has been a contentious issue since 1979, when I first was a member of a local authority. At that time, the chambers of commerce nationwide would make a plea to members of local authorities to not increase or to reduce rates, depending on the economic activity at the time. It is a reflection of how difficult and complex is the area that it has not been reformed up to now. However, it is only difficult and complex if the bureaucracy of the State looks at it that way or if it is not driven politically to ensure the requisite change is delivered. Therefore, I will appeal to the Minister, who is familiar with local authorities and businesses and who understands what needs to be done. In terms of job creation and of conducting business, the SME sector, which is given credit for employing almost 800,000 people in the economy, has been tightening its belt over the past three to four years since the economy's difficulties began to hit hard. The sector has been reducing its staff numbers and it is not business as usual. Enterprises have introduced new and better ways of doing business and have tried to contend with an extremely difficult position at home and abroad. People who travel abroad with representatives of many of the companies to which I refer in respect of the employment of 800,000 people will say that competing abroad is one thing but controlling costs at home, especially commercial rates, is something completely different.

Such businesses have always considered, regardless of who was in government, be it Fianna Fáil, which was in office in recent years or the present Government parties, that they are not being listened to. However, now is the appropriate time as sometimes, the middle of a crisis is the best time to force a system to recognise exactly what is happening and to put in place politically the changes that are absolutely necessary to reflect an equitable system for the rates structure. The present position regarding rates and the SMEs simply is not sustainable. Such enterprises have reduced their employee numbers to contend with their costs. They have dealt with all costs within their business and the only costs with which they cannot deal are local government charges and rates in particular. The cost of doing business in Ireland is high by most standards and for the SME sector, the cost of paying rates adds to the overall cost.

The other issue which is causing difficulties in regard to properties that have to be rented, or simply where businesses have gone out of business and are anxious to rent the building they own, is the subsequent occupier clause. I ask that the Minister would consider this issue in particular. It is a system with no flexibility, and this clause is causing the property to be left idle and unoccupied where it could be put to better use if we were to reform this area.

I understand the difficulty in terms of local government funding - this is the dilemma. If some of that 29% is taken out of the system, where else does one get it except from central government? The McCarthy report clearly indicated €511 million can be saved, and that was just at a first glance. Given my experience with local government, having served there over 25 years, I suggest there are many areas where one could cut back and save money, thereby giving some form of relief to ratepayers and saving the costs of local authorities even further.

I say this while being conscious that it was a Government in which we were involved that introduced the directors of services in every local authority. None the less, it is simply not credible to continue with that system because of the costs involved. I respect the fact the Minister has merged some local authorities and that he has recognised the cost. He should go further with that type of reform so we bring a better, more cost-effective model to bear on local government in order that, in turn, local authorities are forced to live within their means and to pass on savings in such areas as commercial rates.

The councils are also taking initiatives across the country to allow activities associated with arts and so on to use these vacant buildings, many of which are an eyesore on the high streets of Ireland. That, too, is a recognition something needs to be done. The local authorities see it and are trying to bring about change in that area.

The Commissioner of Valuation recently came before the Committee of Public Accounts. I wish to put on the record of the House that of all the Accounting Officers we have met, he is the one who is an example to all the rest in terms of how he conducts his business and the fact the work is being done on a pro bono basis, which is significant. He indicated that it will be 2018 before the 175,000 properties throughout the country are dealt with and revalued.

The Minister mentioned the 2001 review in his amendment and I hope that review will be dealt with in the House sooner rather than later, because it is the one piece of legislation that could be classed as emergency legislation. We must put it before the House and allow a suggestion made by the Valuation Office, namely, that there should be self-assessment, which is working in many other areas such as taxation. I do not see any reason this legislation cannot be taken as emergency legislation and that we cannot put in place, with the appropriate checks and balances, a system whereby there would be self-assessment to allow businesses to re-engineer or re-gauge their rates and reduce that cost, allowing them to continue in employment.

The Minister's amendment states he is "acutely aware of the pressures". If he is acutely aware in this regard, and if the emergency exists outside, given the House now sits on a Friday, I suggest we should sit and deal with this issue. There is nothing wrong with that. It is what businesses are doing every single day of the week. They are reconstructing and reinventing themselves and dealing with the cost base immediately. Given this is a cost that is having a negative impact on their ability to do business, I suggest, as legislators, we should sit in the House regardless of the day to deal with the legislation.

The Valuation Office has come forward with other examples of how one might have an appeal system within the rates valuation. If we do that, the second leg has to be that the county councillors throughout the country should be encouraged to ensure a 25% reduction in rates, something I said when I was on the other side of the House. Essentially, all that does is to force local government to live within its means. They are asked to cut their cloth according to their measure. These are the simple things I believe need to be done. They can be done swiftly and easily if we are committed to delivering a reasonable rate base for the SME sector.

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