Séamus Healy (Tipperary South, Workers and Unemployed Action Group)

I am pleased to have the opportunity to speak on this legislation and I welcome it. Small and medium businesses have long been a vital and important part of the Irish economy. Many of these are family businesses which have been handed down over the years. Most, if not all, are local businesses that employ local people and buy in local services. In recent years, small businesses have been especially hard hit by the recession and by the lack of and cost of finance. Most, if not all, Members will have heard from entrepreneurs and local people in their constituency offices who have detailed the difficult circumstances of old, established family businesses going to the wall. This is having a serious effect not only on the local economy and local jobs but also on the families and friends of those involved and on their medical situations as a result of stress related illnesses. There is no doubt this has been an horrific time for small businesses, which have been and continue to be a vital part of the Irish economy.

Anything we can do to retain or create jobs in this area is important and welcome. We have put vast sums of money into the banks in recent years. I understand the figure is approximately €60 billion. We are informed we own most of the banks now. There is an obligation on the banks to ensure small and medium enterprises are supported and finance is made available to them at a reasonable cost. The Bill represents an attempt to help in this regard and is welcome. A recent Central Bank report stated:

From a policy perspective our key findings are as follows: the lending market for all enterprises has become more concentrated since the onset of the 2008 crisis; the lending market for SMEs is significantly more concentrated, and the trend is towards even higher concentration; foreign bank penetration has diminished in Ireland since the crisis. Having distilled the lessons from the literature on the likely effect of increased concentration and lower foreign bank penetration in the Irish SME lending market, it appears most likely that the predictions of the Market Power Hypothesis will prevail, leading to tougher conditions for SMEs seeking to access finance. Policy measures such as a loan guarantee scheme, microfinance fund and credit register should help to mitigate these adverse effects somewhat, but it is clear from the analysis presented here that challenges will remain in the medium term.

The Governor of the Central Bank, Patrick Honohan, also stated recently that "credit conditions for SMEs are tougher in Ireland than anywhere elsewhere in the euro area both in terms of cost and availability".

This is the background to this scheme, which will facilitate up to €150 million for small and medium enterprises each year. I hope the €150 million will be additional moneys. I realise this is the intention of the Oireachtas. Under the Bill, the funding is supposed to be from additional moneys but in the past this has not happened and similar funds were put into another area. I hope there will be constant monitoring and reviews of the situation to ensure the €150 million represents additional moneys made available to small and medium enterprises.

Any initiative to maintain or create jobs is vital and should be undertaken and I welcome the Bill on that basis. However, as everyone is aware, the Bill is, of itself, only scratching the surface. In terms of the background to this Bill, this economy has been bled dry in recent years. We have taken approximately €20 billion out of the economy and under this fiscal treaty we are proposing to take huge sums of money out of the economy again in the next few years. It will be in the region of €6 billion between now and 2015, in addition to the €8.5 billion we have already earmarked to take out of the economy. Meeting the 60% debt to GDP ratio will require further austerity for a period of almost 20 years from 2018, something in the region of €4.5 billion per year. In that situation job creation is not at the races, so to speak, because if we continue to take that amount of money out of the economy, it will contract and jobs will be lost. Already, approximately 430,000 people are unemployed and about 100,000 people are emigrating and if we take that amount of money out of the economy on an ongoing basis, we will be faced with economic stagnation. One only has to walk down the main street of any city, town or village to see the effects of what has been happening. Shop after shop is closed. There have been a significant number of closures and liquidations in most of our towns and villages, and there is a very high level of unemployment. If we continue in this vein, the future for employment and the economy is bleak. The Government should now examine that situation because austerity is not working. Anybody who has eyes in their head can see austerity is not working and that we need growth and stimulus in the economy.

If budgets are run here on the basis of cuts and additional taxes year after year, and if that is done by our trading partners in the rest of Europe such as is proposed in this fiscal compact, it will result in markets reducing, loss of jobs and stagnation. That is something that has never worked. There is no historical precedent for getting out of a recession by imposing austerity. The priority of this Government is on imposing more austerity. It will have to ensure there is a real growth package and that jobs are created.

While jobs will be maintained as a result of this measure, and I hope some jobs will be created as a result of it, the bigger picture is that the very wealthy people in this country are on an investment strike and have been for recent years. If jobs are to be created here they will have to be created directly by the State because the so-called entrepreneurs are on an investment strike and have not been putting the money into job creation. It is not that they do not have the money. We know from various reports, including from the Central Statistics Office, that significant moneys and assets are available to a very small number of people here. Approximately 5% of people own assets to the value of about €239 billion. Those are the people who are on strike, so to speak, and it is not only that they own those assets. In 2009 and 2010, they increased those assets by €46 billion. That was done in the teeth of the recession. Those figures are not mine; they are from a Central Statistics Office report. A further report from the Central Statistics Office shows that while 90% of the population lost income in recent years and 25% lost significant income, 10% of people made additional income during the course of this recession. Those are the people who are on an investment strike and if they will not invest, the State must urgently create the investment. Otherwise, middle and lower income families will be bled dry. They are under severe pressure as we speak and it is the duty of the State to create jobs, not just the environment for jobs. The State must become directly involved in job creation. Otherwise, we will have a continuation of the current high unemployment and emigration levels.

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