Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)

As far as it goes, this Bill is welcome. Anything done to provide extra finance to small and medium enterprises and any effort made to stimulate the domestic economy should be welcomed and supported. There is nothing to oppose in the Bill, as it is an effort to give some support to the small and medium enterprise sector and to the domestic economy.

However, if the aim of the Bill is to address the enormous crisis facing the small and medium enterprise sector, the massive unemployment crisis of 438,000 people unemployed, the collapse in the domestic economy we have witnessed over the past four years or the credit crunch associated with that, the Bill is tantamount to whistling in the wind. It reminds me a little of the story of Peter and the dyke. People may be familiar with the story of Peter and the dyke. Peter noticed a hole in the dyke and stuck his finger into it to stop the water coming through. However, cracks and new holes kept appearing all over the dyke making it an impossible situation to resolve. This is not a bad analogy for this Bill in the context of what is happening to the economy and the scale of the crisis we face in terms of unemployment, the collapse of demand in the economy and the collapse of investment in our economy over the past number of years. This Bill is only a small drop in the ocean, covering up the much bigger crisis and will not address in a substantial way that crisis.

The lending capacity of the fund provided for in this Bill is €90 million. For the small and medium enterprises that get loans from this fund, any amount will be welcome. However, we should look at this €90 million in the context of a situation where we have removed more than €20 billion from the economy since 2008. Under the terms of the EU-IMF programme, we will remove another €8 billion in the next few years. Under the terms of the fiscal treaty recently passed, we will have to remove approximately another €5 billion or €6 billion in order to meet the deficit targets. In addition, we may have to remove €3 billion or €4 billion per annum for the first few years when the treaty comes into force to meet the debt targets. When we consider all of this, we get a sense of how microscopic this initiative is faced with the enormous withdrawal of resources and investment from the economy. I do not see how we can address that problem in any serious way.

The issue of the banks lies at the centre of all of this and this infinitesimal initiative is trying to compensate for the massive banking problem we face. We have got a fund that can lend €90 million, but we have put more than €60 billion into our banks. We suffered enormous pain to do that and huge austerity has been imposed on ordinary people. The justification put forward for imposing this crippling austerity on ordinary people in order to bail out the banks was that the banks would lend and invest in the economy; that the banks would provide support for small and medium enterprises and stimulate the economy more generally. This has not happened. One must ask why we are now setting up a small micro-enterprise fund, when the banks into which we pumped €60 billion should be doing this job. However, they are not doing the job. I do not understand the thinking behind the Government's failure to force the banks to lend and invest in the economy, particularly now that we own those banks. What is the point? Why are we allowing this to happen? Government Deputies and Ministers are rightly bemoaning the failure of the banks to do the job they are supposed to do, but they remain at arms length from them. If we own the banks why can we not tell them what to do, especially since it is glaringly obvious what they should do? They should give a break to the tens of thousands of distressed mortgage holders who, because of their mortgage distress, are not spending money in the economy and consequently depressing demand on a vast scale. The Government should tell these banks to start lending and investing again. I do not understand it.

When set against this problem, the €90 million, as helpful as it may be for the 5,500 enterprises that will benefit from it, is simply a drop in the ocean. I cannot understand why the Government will not address this central problem. I can only imagine it is something to do with being ideologically blinkered and this ideological blinkering appears to be shared throughout Europe. The policy of bailing out private banks is being implemented throughout Europe and we have helped to do this but it is not working anywhere. Trillions of euro have been put into the banks throughout Europe but we still have a credit crunch, no money and no investment.

Gross capital formation in the State has dropped by 70% since 2008, a vast reduction. There can be no recovery with such a fall-off in the level of investment. Those with the resources to make investments are those in the banks because we put all the people's money into them and we have taken on a vast debt burden to further recapitalise them and other European banks as well. Despite this we cannot tell them what to do or what they are supposed to do. I do not understand it.

Is it because of an ideological belief that it is not the Government's job to tell the banks what to do? This appears to be the case. Deputy Eoghan Murphy stated that it is not the job of Government to lend money to enterprises. If not, whose job is it given that we now own the banks and they are not doing it? Who else will do it? No one. That the Government has been forced to set up this fund is an acknowledgement of that fact. The fund is minuscule, however, compared to the scale of the problem. If the Government has recognised that it has a responsibility to stimulate the economy on this small scale and to put money into the domestic economy, why does it not realise that it should do the same on a greater scale and that no one else will do it? I do not understand it.

People have raised other valid issues and I will refer to them for the record. These include the fact that rates are crippling many small businesses. Some 70 businesses in Dún Laoghaire have gone in recent years and Dún Laoghaire is beginning to resemble a ghost town. The excessive level of rates is a major factor crippling small businesses. Many others are hanging on by the skin of their teeth. The high levels of rent which the Government has failed to address is an issue as well. We could throw into the mix the issue of parking charges, which have been especially damaging. I am unsure of the position elsewhere in the country but in Dún Laoghaire parking charges imposed by the council have done considerable damage to small and medium enterprises. Small businesses in Dún Laoghaire and elsewhere have been kicking up about these issues and they are right to do so but we all know the reason why local authorities will not budge. Most county managers recognise the problem but they cannot reduce rates or parking charges because they have become a revenue stream for local authorities, which are chronically underfunded. This all comes back to the austerity and the cuts that have been imposed on the funding of local government and, more generally, on the incomes of ordinary people. The cuts affecting ordinary people are sucking demand out of the economy and the cuts being imposed on funding to local governments are essentially limiting their room for manoeuvre in terms of doing something about rates or parking charges. All of this is being done to bail out our banks and European banks and to impose austerity. I cannot understand how we can achieve the objective of the Bill if we do not address this much greater problem.

The problem appears to come back to an ideological viewpoint. I have heard those in the Government state many times that it is not the job of the State to create jobs but to create the conditions for jobs to be created. This sounds like a good slogan but what does it mean? In what sense is the Government creating the conditions for jobs to be created by others? Clearly, it is not doing so. In fact, the Government is doing the opposite. For jobs to be created by anyone there must be demand in the economy but there will be no demand in the economy if tens of thousands of people are saddled with unsustainable mortgage debt and if hundreds of thousands of people have had their incomes slashed. As a consequence, they will not have money to spend in shops and businesses which, we hope, will be the drivers to chart our way out of the economic depression. What is the alternative? I do not believe there is an alternative unless we deal with the debt problem and unless we end the suicidal policy of austerity.

Let us put aside what has been done in the past and the €20 billion that has been taken out already. The plan to take out a further €8 billion to meet the 3% deficit target will only further cripple our economy. Set against this figure of €8 billion, a fund of €90 million goes nowhere; it is a drop in the ocean. Why has the Government set itself against the idea of the State intervening in this situation on a grand scale? The banks will not do so and the private sector is not doing so either because it has no wish to take the risk or, in the case of small and medium enterprises, it does not have the finance. Why does the State not intervene and create the conditions for employment by identifying strategic areas where we have the resources and the people to develop enterprises and invest in them?

I do not accept the view that it is not the role of the State to do this. The State effectively moved from being a Third World country to a modern state as a direct result of the creation of large public enterprises, including the ESB, Bord na Móna, Bord Gáis and Aer Lingus. That was how we moved from being a colonial backwater to a modern state, through the creation of state enterprises.

Employing tens of thousands of people in strategic industries will stimulate the rest of the economy but if the State does not step up to the plate in the way it has done in the past nobody else will do the job.

The theory that the Government and the political mainstream in Europe has promoted for the last five years simply is not working. Regardless of how much money is shovelled into the banks, they are not reinvesting it in the economy. Is it because of dishonesty or a lack of understanding that we bemoan the fact that the banks do not lend without asking why this is the case? Is it just because they are run by mean and miserable people who do not understand how desperate we are?

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