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

It is not a difference of profit and loss because on the basis of the rates of an average business of €3,000 per year, per euro it is 310%. No rates have gone up under this Administration. The Minister, Deputy Hogan, is dealing effectively with a major reform of local government.

As the Minister with responsibility for small business, I welcome the opportunity to speak on the Finance Bill. In budget 2013 the Minister for Finance put the SME sector at the centre of this Government's strategic plan for economic growth and job creation. The Government recognises that the operating environment for SMEs remains difficult, which is the factual position, and therefore we are committed to taking a range of actions to support this important sector.

Deputies will be aware that in the November medium-term fiscal statement, which is all about the fiscal management of Government, the Department of Finance published an economic assessment of the SME sector in Ireland. This paper highlighted that SMEs make up 99% of businesses in the enterprise economy in Ireland and account for almost 70% of people employed by them. These figures show how important SMEs are to Irish economic life. The numbers highlight the importance of sustaining and generating employment in Ireland and suggest that our recovery strategy must focus additional support on SMEs. The issue is about confidence and credit, buying to support the Irish economy, supporting small companies and getting the domestic economy up and running. If every politician is pessimistic about the economy, however, people will not buy products and will instead save their money. People are not shopping or spending locally. Our job in government is to create an air of confidence.

To that end, I very much welcome the ten point tax reform plan announced in the budget. This plan includes measures that will make a real difference for the SME sector such as reforming the three year corporation tax relief for start-up companies, increasing the cash receipts basis threshold for VAT, amending the close company surcharge to improve cashflow for SMEs and extending the foreign earnings deduction for work related travel to certain additional countries.

The Deputy referred to the issue of vintners, and the Government is introducing major reform of the alcohol trade in terms of addressing below cost selling, the abuse of the alcohol trade and the unitary cost of alcohol. The Government will bring forward significant proposals to deal effectively with the issue of the home consumption of alcohol. The viability of the licensing trade is suffering as a result of the selling below cost of brand leaders and that issue will be dealt with by the Government.

I am also pleased that two additional SME measures are included in this Bill, namely, the amendment of the key employee provision of the research and development tax credit regime by reducing, from 75% to 50%, the proportion of time that such an employee must spend solely on research and development activities - which must be welcomed - in order to qualify for the credit, and the amendment to the employment incentive and investment scheme to permit operating or managing of hotels, guesthouses, self-catering accommodation or comparable establishments to qualify for this incentive. That must make a real difference. These initiatives will build upon the supports that are available through Departments and Government agencies and the measures introduced to support credit flow into the SME sector. The action plan for jobs will be announced very shortly and Members will see what the Government is doing to revitalise this economy in the SME sector.

The Government is focused on ensuring all businesses, including SMEs, are supported in every way to develop their business, increase exports, create jobs and rebuild the economy. By far the most talked about problem in recent times facing the Irish SME sector is the non-availability of adequate credit facilities, and we all agree that is a problem, but banks will not give money to businesses that are not viable. The Deputy knows that only too well, regardless of the situation.

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