John Perry (Sligo-North Leitrim, Fine Gael)

I am delighted to contribute to the debate on behalf of the Minister for the Environment, Community and Local Government, Deputy Hogan. Deputy Niall Collins and his colleagues have raised important points. However, the Government is conscious of the 200,000 companies which employ 655,000 that generate €90 billion in the economy. It is important to recognise that many issues affect business and rates is one of the difficulties. It is a bottom line issue.

The debate has afforded the Government an important opportunity to highlight the steps being taken to assist businesses and to enhance local government in these uncertain economic times. It is clear that employer and employee confidence is of great importance. As my colleague, the Minister for the Environment, Community and Local Government, Deputy Hogan, stated last night, the Government is acutely aware of the pressures on many businesses currently and the challenging economic environment in which many property and business owners are operating. In the context of retail, we have 13,000 sq. ft. of retail area per head of population compared to 1,000 sq. ft. in the UK. That expansion occurred during the property boom and has increased the pressure on all those involved in retail currently.

The Government is focused on reducing the costs of doing business. Today, I launched a 12-point plan for small companies, on which I will not elaborate at the moment, but it is a good concept for what we plan to do for small companies. As it states in the motion, it is important to support competitiveness and employment in the economy in order to promote job creation and the retention of the jobs that currently exist in small companies. It is also critically important to protect the interests of communities. The issue relates to confidence and credit. Rates are one aspect. We are dealing with the availability of bank funding to small businesses. The confidence of consumers to spend is also important. It is the job of Government to ensure that government costs on businesses are reduced.

Income from rates is a vital contribution to the cost of services provided by local authorities, with 29% of local authority income being raised locally from commercial rates. The Government is fully committed to assisting local authorities maintain a stable base for funding, while supporting businesses in the uncertain economic environment in which we all operate.

Local authority cost bases have been reduced and continue to be rigorously examined to maximise efficiencies which, in turn, impact positively on business. The value for money audit within local authorities is also important. We will continue to impress upon local authorities the need for intensive measures to enhance efficiency with a view to minimising rates and charges for business, and a rigorous efficiency drive is being pursued in this context. I know the Minister, Deputy Hogan, is pushing this aspect.

I will outline again some of the key measures taken to date. Annual rates on valuation have been reduced by an average of 0.6% in 2010 and by a similar level in 2011, involving real reductions in local authority income from rates. The Commissioner of Valuation is conducting a programme of revaluation of all commercial and industrial properties throughout the State which will assist in providing a more equitable distribution of rates across those liable to pay rates. The timescale of this review is of concern and should be shortened. A significant amount of work has already been undertaken on a Bill amending the Valuation Act, which the Minister for Public Expenditure and Reform hopes to bring to Government shortly. General purpose grants of €790 million have been allocated to local authorities in 2011, which have assisted in reducing the overall burden that would have otherwise been placed on commercial ratepayers. The burden of commercial rates falls on a very narrow group of people. An implementation group with an independent chair and business expertise has been established to drive and oversee implementation of the recommendations of the report of the local government efficiency review group. Business support units in each county and city council are providing a focal point for businesses. We intend to develop and centralise business supports in every county. There will be an announcement on that shortly. The support groups will engage with the local government system and smooth their path in setting up and managing their businesses.

My colleague, the Minister for the Environment, Community and Local Government will continue to keep all matters relating to rates, local government funding and reform under regular consideration. Inadequately funded local services are not in the interest of business nor do they support those who would look to invest in Ireland. The Government wishes to ensure that local authorities continue to provide the required economic planning and development, and underpin the provision of goods and services, as well as community infrastructure to serve their communities. The Government is committed to making our economy more competitive and remains fully focused on job creation and maintaining the existing 655,000 jobs in small companies.

The local government sector has an important role to play in this regard. Local services are vital. I understand what Deputies are saying about the stacked up costs of establishing and running a business. We are determined that every avenue will be pursued to support business and to optimise efficiency and curtail costs in the local government sector.

This is an important motion and this is an emotive issue for every business here. This is one of the many difficulties experienced by small businesses at present. The Government is seriously looking at this issue.

See this speech in context