John Perry (Sligo-North Leitrim, Fine Gael) | Oireachtas source

As the Minister of State with responsibility for small business, I am keenly aware of the challenges businesses face in the current economic climate to keep their overheads down. Small businesses are the lifeblood of the country. Over 90% of companies are small businesses which employ 655,000 people and contribute €10 billion to the Exchequer each year.

While statutory sick pay has been the subject of a consultation process initiated by the Minister for Social Protection, this is a very complex issue that calls for a whole of government discussion. To date, no formal proposals have been put to the Government on the matter. The Government is absolutely focused on ensuring Irish companies are supported in every way to develop their business, increase exports, create jobs and rebuild the economy. The ability of small and medium-sized enterprises, SMEs, to succeed and grow underpins our future potential for job creation, growth and prosperity. The challenge of regaining competitiveness has been tackled head on by the Government and recent international league tables are testament to our achievements to date in this regard. All of the actions we have taken since taking office have focused on developing the conditions which will support the creation of jobs across all regions. More needs to be done and we will continue as we have started.

I will remind the House of some of the most notable steps we have taken in support of enterprises since entering office. For several years, owing to the collapse of the banking system, accessing credit has been particularly difficult for SMEs. The Government has shown a determination to improve the position. We have recapitalised the banks. The economic management council meets them on a regular basis and has emphasised the need to provide additional lending to allow businesses to grow.

Notwithstanding this, through the Action Plan for Jobs, we are delivering several measures to fill gaps where market failures continue. These include establishing a temporary partial credit guarantee scheme, setting up a microfinance loan fund and supporting the development of a dynamic venture capital industry. The partial credit guarantee scheme which was launched last week by the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, will benefit innovative, job-creating businesses that face obstacles in accessing credit because they do not have conventional collateral, or because they operate in sectors with which the banks are not familiar. The scheme will facilitate up to €150 million of additional lending per annum to SMEs. The benefits forecast to arise from this intervention in each year of operation include the creation of over 1,000 jobs and a contribution of over €25 million to the Exchequer through tax revenues and welfare cost savings.

The microfinance loan fund has been open for applications since 1 October. It will support commercially viable microenterprises that do not meet the conventional risk criteria applied by banks. The scheme will initially facilitate €40 million in additional lending in the next five years to businesses employing ten people or fewer, with provision for the scheme to be extended to provide an additional €50 million of lending over a further five years at that point. The scheme has the potential to help create over 7,700 jobs in the next ten years. Loans of up to €25,000 will be available to those microenterprises that have been declined credit by a bank.

These are just two examples of the practical actions the Government has taken under the Action Plan for Jobs to help businesses and support employment. The action plan contains over 270 measures to transform the economy and get people back to work. Other measures the Government is taking to support business competitiveness include reforming the statutory wage setting mechanisms to make it more appropriate to our modern economy, while reducing the administrative burden on business through a project across seven Departments and the Revenue Commissioners. My Department has achieved a 24.5% reduction in administrative burdens in the areas of company law, employment law and health and safety law, yielding potential savings of €206 million per annum for business.

The Minister for the Environment, Community and Local Government, Deputy Phil Hogan, has encouraged local authorities to exercise restraint in the setting of commercial rates. All but one local authority have frozen or reduced their annual rate of valuation this year. That one local authority increased its annual rate of valuation owing to a legal requirement following the extension of a town boundary.

The Minister for Social Protection, Deputy Joan Burton, has made it easier for employers to recruit a person off the live register through the simplification and extension of the employers PRSI exemption scheme. The Government is actively promoting this through its engagement with companies and business representative bodies, as well as through other financial supports to business. Recently in Sligo we launched a one-stop shop in mentoring and training for the unemployed.

Ensuring more micro and small businesses can start up, expand and export is a key part of our plans for job creation and growth. That is why the Government has decided to implement an ambitious reform in the delivery of services to small and microbusinesses. This will include the development of a new small and microbusiness division within Enterprise Ireland as a centre of excellence in the provision of supports for the small and microenterprise sectors. It has also seen the dissolution of the county and city enterprise boards and the transfer of their functions, assets and liabilities to Enterprise Ireland and the establishment of local enterprise offices to provide a high quality, innovative, one-stop shop support service for small businesses within local authorities, while providing early access to the services of national bodies. The new structures will be benchmarked against best practice, will be open to all businesses, whether they are trading locally or getting ready to export, and be measured against clear and ambitious targets.

A high level implementation working group chaired by my Department is progressing the range of issues involved. It is intended the process will be completed as rapidly as possible. My Department is engaged with the Office of the Attorney General regarding detailed primary legislation that will be necessary to implement the new arrangements. These will obviously come before the House in the normal legislative manner. In the interim, as much as possible will be achieved on an administrative basis to get the local enterprise offices up and running as quickly as possible, well in advance of having the legislation in place.

The actions we are pursuing through the Action Plan for Jobs are aimed at improving Ireland's overall competitiveness, reducing costs and ensuring the enterprise environment is supportive of companies which can sustain and create jobs. I am often amazed at how competent and creative many of the small enterprises are that I encounter around the country. Our efforts are being reflected in improved international competitiveness ratings. Ireland is ranked 20th in this year's International Institute for Management Development world competitiveness yearbook. It is ranked 27th in the latest World Economic Forum global competitiveness index. Ireland's position in both indices has improved this year after several years of slipping downwards.

There are several key areas in which Ireland tops the global list, including the business impact of rules on foreign direct investment, inflation, foreign direct investment and technology transfer, skilled labour, flexibility and adaptability of the labour force, and investment incentives. The progress the Government has made in its first 18 months in office is encouraging. Employment in export-oriented companies supported by my Department's agencies has increased by a net 10,000 in the past 18 months. This is in sharp contrast to losses of 45,000 jobs among such companies in the previous three years.

In spite of job losses in more traditional sectors such as construction and domestic financial services, we are seeing an increase in the numbers of jobs in emerging areas targeted by the Action Plan for Jobs such as tourism and information and communications technology. There have been several significant job announcements in the past few weeks in the case of indigenous companies, as well as foreign investment.

It is particularly encouraging that exports from indigenous companies have been growing even faster than foreign direct investment, reaching €15.2 billion in 2011, the highest level ever and a remarkable achievement.

The action plan for jobs shows our commitment to implement change and reform on a step-by-step basis, to re-energise the economy and address a failed economic model too reliant on unsustainable sectors. That is the backdrop. More than 90% of all measures for delivery under the action plan in the first three quarters of this year have been completed on time. We must continue to work across Government to ensure that we have a balanced approach to fiscal consolidation while being supportive of enterprise. The Cabinet committee system provides a mechanism to ensure co-operation and collaboration across Government.

My Department works bilaterally with the Department of Social Protection on a range of issues that cut across both Departments. With regard to statutory sick pay, the Minister for Social Protection, Deputy Burton, has been engaged in a consultation process with key stakeholders to examine the issues arising from the potential introduction of such a scheme in Ireland. However, this process is not yet complete and no formal proposals have been brought to Government. Any consideration of such an issue must be examined in great detail and in particular must be scrutinised through the lens of small business, taking all factors into account. The Minister, Deputy Burton, will elaborate on the factors underpinning her consultation process.

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