Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)

larraim ar Theachtaí tacú leis an leasú ar an rún in ainmneacha na dTeachtai Shinn Féin. Is tábhachtach é an díospóireacht seo. Tá gnó agus fostaíocht á phlé againn, rudaí atá práinneach le níos mó ná 450,000 daoine dífhostaithe faoi láthair.

It is timely that this debate is taking place so we can address the perilous state of businesses in Ireland today, especially small and medium-sized indigenous enterprises that provide so much employment. Many of those businesses have gone under during this prolonged recession, taking with them many tens of thousands of jobs while many more are struggling to keep their heads above water.

Since the Dáil adjourned last week we learned through the Bundestag that the Fine Gael-Labour Government is planning to increase VAT by 2%. Budget documents to which Oireachtas Members do not have access were being bandied about in the German Parliament. That is the extent of the sell-out of our economic sovereignty. Nothing exemplifies it more strongly. A 2% VAT increase would cause huge damage to businesses across the country but especially in the Border counties. It would create a 3% gap between VAT in the Twenty-six Counties and the Six Counties.

Once again the VAT differential would lead to a stampede across the Border, leaving ghost towns all along the Border's length. The VAT increase must not be allowed to go ahead. It would also punish middle to low income families, especially in the festive season. It should most definitely not be included in budget 2012. As the Sinn Féin amendment states, the Government should drop plans for the VAT increase and work with the Executive in the Six Counties to gain powers to harmonise tax and VAT across Ireland.

It seems extraordinary that, as our amendment states, the programme for Government is silent on the issue of commercial rates, but we should not be surprised because this is from a Government that has no coherent jobs strategy and that follows all its predecessors in totally neglecting the issue of fair and effective local government funding. The current rates system is grossly unfair, never taking into account ability to pay. It needs to be fundamentally reformed as part of a major overhaul of local government funding and as part of a programme to assist small businesses.

We are facing an almost chaotic situation in local government funding. As we speak, local authorities are being asked to adopt annual budgets without knowing what form the local government fund will take in 2012. It is suggested that they face a reduction of at least 10%. They are being told the already notorious household charge will be paid into that fund. This charge is a flat tax which, like commercial rates, takes no account of ability to pay. For many households, it will be the final straw. Many people cannot and will not pay. To what extent this will reduce the local government fund we simply do not know.

For small to medium size businesses the current rates system weighs very heavily, along with the current rent system and now the threatened VAT increase. This is totally unsustainable for many businesses, which will simply go under in the months ahead. We have already seen this happen to far too many in recent years, nowhere more than in the Border counties which the Minister of State and I represent.

Reform and rebalancing are needed and must be brought forward if we are to have some hope of leaving the prolonged recession behind us. We face a situation where the largest retail units, parts of multiple and multinational chains, are thriving and proliferating at the expense of smaller retail businesses. It is far from a level pitch. There is no comparison between the burden of rates and other costs on small and medium size retailers and the ability of the big chains to bear such costs. The bigger businesses must pay their fair share and the struggling smaller enterprises must be relieved of some of their excessive burden. We need to see the reality of the recession taken into account. We need to see some form of appeals system with regard to rates. Tinkering with the system is not enough. We need real and substantive change.

The upwards only rent system also needs to be ended. This is another toxic legacy of the Celtic tiger. The property madness during the boom squeezed out productive business, inflating property prices and rents, which sucked the life out of businesses. This is still happening. The life is being sucked out of businesses, some of which have been there for generations. The evidence is on the streets of all our towns, especially in the Border counties. It is still happening and it must be urgently addressed.

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