Thomas Pringle (Donegal South West, Independent)

It is good the Minister of State met them but they need more than meetings. They need somebody to take ownership of these issues and take a lead on them.

The Taoiseach stated he met them but there is no point in meeting them if one will not take up these issues and run with them. This is a statutory agency that should be supported and listened to because the measures to which I referred are those we need to drive this economy. Those are what we need to stem the tide of emigration that is rampant throughout the country. Foreign direct investment will not bridge that gap and will not provide the jobs people need in order that they do not have to go to Australia, Canada and the four corners of the earth to find employment for themselves.

The Bill, as I stated earlier, comes in the context of 1,200 businesses having closed in the past year throughout the State. It is a small step. Unfortunately, I believe, it is probably too small a step. The €150 million limit on the guarantee lacks imagination and a number of criteria within the guarantee itself, specifically the length of time of the guarantee of three years, is on the lower end of the scale across all the international examples. One could see a situation after three years, especially where we will not be in the position of growth in which the Government states we will be, - at this stage, nobody believes that - that the banks would be cutting off small and medium sized enterprises again and they would be back to struggling hard. The three year term of the guarantee should be extended, either to ten years or to the lifetime of the loans, to ensure businesses can enjoy some certainty and security if they are lucky enough to get into this scheme.

I would also be concerned about the banks' attitude to the scheme, whether they will participate actively in it or engage fully with it, and the restrictions they will place on small businesses to avail of the scheme and make the best use of it in the future. The Department and the Government need to take that issue on strongly to ensure the banks play the role they are supposed to play of servicing and assisting the economy, not the State servicing the banks and keeping them in business, which has been the situation over recent years.

As has been mentioned by other Members, the 2% annual fee that will apply for qualifying loans under the scheme could place an onerous burden on businesses. In the case of a business that borrows €1 million, it is looking at having to pay €20,000 upfront for the administration of the scheme. That could place a burden on businesses. Can borrow that amount of money as part of the loan or must they have it upfront? If many business had that amount of cash flow, they probably would not be looking for a guarantee under the Bill. The Department must look seriously at how that will operate to ensure qualifying businesses do not encounter barriers to their participation arising from the administration of the scheme.

Overall, the credit guarantee scheme must be welcomed because anything that gets business going and helps the domestic economy, sustain jobs and job creation must be welcomed. Unfortunately, the €150 million limit is probably too low and the three-year term is probably too short. Through amendments on Committee Stage, the Minister might consider adjusting those figures and ensure the administrative element of the scheme, the 2% fee, would not be a barrier to companies which wish to participate.

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