Willie O'Dea (Limerick City, Fianna Fail)

I move amendment No. 1:

In page 3, between lines 11 and 12, to insert the following:

"(2) In this Act "Act of 1999" means the Companies (Amendment) (No. 2) Act 1999.".

The Minister of State will be aware that SMEs are not compelled - and are exempt from the requirements - to have an audit if they have a turnover of €8.8 million per annum or less, and if they are employing fewer than 50 employees. Unfortunately, this situation does not apply to brokers because they are covered by different legislation, albeit perhaps for good reasons.

Brokers are compelled to have an audit regardless of turnover, which has created great unfairness in this business. Brokering is largely an advice-based business. Generally speaking, brokers do not handle clients' money or premiums except in specified limited circumstances where the relevant insurer is anyway responsible for the moneys. Therefore the risk of insolvency is extremely limited. In so far as consumers have money with brokers, they are also protected through ICCL and professional indemnity insurance. A broker who might only have a turnover of €100,000 or less is compelled to have an audit. Brokers in my own home city of Limerick say that an auditor will not conduct an audit for less than €5,000. However, another type of business with 100 times that turnover is not compelled to have an audit. This is blatantly unfair.

I will cite a case study from my own area. In the wider Limerick region there are 52 brokerage firms, which are responsible for several hundred jobs. This amendment seeks to reduce the cost on those small businesses so that they can maintain the jobs. Limerick city and the Limerick region generally has been ravaged by unemployment. The mid-west was reliant to an extraordinary, above-average degree on low-skilled manufacturing, tourism and related businesses that have been especially affected by the recession. We have lost a number of white-collar jobs in the brokerage business, but I am trying to hold on to what we have left.

Due to a combination of bad planning, poor decisions by local authorities and the recession, Limerick city centre is physically scarred by unemployment. There are run-down and derelict buildings as well as closed shops. Every time I walk down the main street, I see another shop closed. I often take a walk around the city centre at 8 p.m. or 9 p.m. at night and it reminds me of Goldsmith's "Deserted Village". We must get activity back into the city centre therefore.

Many of the white-collar brokerage jobs are based in the city centre, while others are based in retail parks and shopping centres that have sprung up outside the city. They tell me, however, that if there was sufficient activity back in the city centre they would relocate there. It is not a matter of helping people to make extra profits, or catering for one particular business sector; it is a question of correcting a glaring anomaly in so far as the requirement for audit is concerned. As I have explained, somebody with a turnover of €100,000 or less, and is making no profits, is compelled to pay €5,000 for an audit, whereas somebody with a turnover of €10 million is exempt from that requirement.

This amendment is about protecting jobs. Brokers throughout the country, not just in Limerick, are responsible for providing thousands of jobs within the economy as a whole. Nonetheless they are under severe pressure and have been badly squeezed by the recession. I am seeking to assist them to retain jobs by reducing costs on them. In my view, this is an unnecessary cost.

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