John Paul Phelan (Carlow-Kilkenny, Fine Gael)

I refer to the contribution of the previous speaker, Deputy Mathews. As someone who was involved in banking for many years I always welcome his contributions on matters such as this one. He represents the very best of the old style banking that may have become unfashionable in the time of the Celtic tiger but which we need more of now.

I welcome the Credit Guarantee Bill. It is important promised legislation to help release vital credit for small and medium enterprises throughout the country. While I disagreed with most of what Deputy Ó Cuív said in his contribution, he raised an issue on which it is worth having some clarification, that is, the potential for this scheme to displace lending that existing financial institutions might already be in a position to give. I hope there will be some comfort in that regard for the Deputy and me in the Minister's closing remarks.

I express some concern about the prospect this scheme might put extra administrative burdens on businesses. It is important it would be timely in that when people apply for credit, the existence of this new scheme would not delay the process of administration.

I fundamentally disagree with Deputy Ó Cuív's comments on €70,000 to €80,000 of a loan being insignificant. For a small enterprise employing five or six people that can be the difference between surviving and not surviving. The Government is correct in ensuring that if there is full uptake of the scheme, which may be modest at the outset, it can be expanded in the future. That is logical. There is no point in announcing a grandiose scheme, and Deputy Ó Cuív and his colleagues did a good deal of that in their 14 years in Government, if it will not be acted upon.

Deputy Mathews is correct in his view on the current position of the economy in terms of the foreign direct investment sector and our exports being buoyant, but it is accurate to state the domestic economy has contracted considerably in recent years. This scheme is directly targeted at improving the domestic economy where most of the people who work in the economy are employed and where most of the room for potential expansion within the economy exists.

In announcing the legislation the Minister, Deputy Bruton, spoke of the potential for these measures to have a beneficial effect for 1,800 small and medium enterprises throughout the country. That are many small and medium enterprises with huge potential for job expansion, and if we are to come out of our current economic difficulties, it is those small and medium enterprises in each small and large community throughout the country that are most likely to generate employment in those communities. Anything that will assist them in that regard is to be greatly welcomed.

In his concluding remarks I ask the Minister to address the concerns raised about the potential extra administrative burden that might be created and to address the concern with regard to the possible displacement of loans which might already be granted by the financial institutions as a result of this legislation.

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