Stephen Donnelly (Wicklow, Independent) | Oireachtas source

I congratulate the Minister and his officials on this Bill which is a fantastic step forward. Legitimate concerns have been raised on Second Stage which I hope will be dealt with by the Minister, his officials and Members on Committee Stage. Still, the Bill is to be welcomed, notwithstanding these concerns.

I am new to the legislative process, having only started looking at legislation two years ago. Before then, I had never seen a Bill or an amendment in my entire life. I was horrified by how complicated, labyrinthine and inaccessible the process could be. One gets a Bill which can refer to an Act dating from the 1930s or 1960s and one needs a team of 12 lawyers just to follow the threads. This Bill is a fantastic development and I would like to see the consolidation of as many Acts as possible, as well as more efforts to simplify them and make the language more accessible.

This Bill will make life easier for companies. I hope it will mean they will have to pay lawyers less money and that businesspeople will not have to deal with inaccessible and labyrinthine legislation in order that they have more time to do what they enjoy doing, which is innovating, selling goods and services, creating wealth and generating jobs.

I hope the Bill goes some way towards reversing a worrying trend. Only a few years ago Ireland was highly distinctive in terms of ease of doing business. The best known international metric is probably the World Bank's ease of doing business index. In 2009 we were seventh in the world, which is phenomenal. I believe we were fourth in 2008. I could be wrong but I think we were even better in 2006 and 2007. I looked at our position this morning when preparing my contribution and it turns out we have drifted to 15th, which is worrying. Obviously, this is a niche for us where we should be distinctive in the world.

The World Bank rankings can point us to some of the areas on which we must focus. On paying taxes us law-abiding citizens are sixth. Ironically, on protecting investors we are also sixth. How we are not first in the world after everything we have done for international investors in this country is beyond me. I would love to know who are bigger saps than ourselves. On enforcing contracts, which is very important, we are only 63rd in the world; I understand the rankings are done for 150 countries. Interestingly, on getting electricity, a key factor input for many businesses, we are 95th. My understanding is that we have some of the highest energy prices and some of the highest paid utility workers, if not the highest in the world. That is something for the Minister to examine. On dealing with construction permits we are 106th. The World Bank index could be useful in trying to drill down into how we can keep our ranking up. Ireland should aim to be in the top five in the world and sell that abroad as a reason for people to do business here and for people to come here and invest. I encourage the Minister to examine those issues to determine what can be done.

As well as making company law more accessible the Bill proposes some very good changes. I agree with the removal of the stipulation on two directors. Having one director is useful, particularly now with so many young, hi-tech educated people out of work here. There is a great deal of space for very small-scale entrepreneurship and the more that can be done for a single entrepreneur sitting in his or her bedroom or at the kitchen table trying to do something the more useful it is.

I had intended to commend the removal of the need for a physical AGM but I listened to Deputy Healy express his concerns about that and he makes a good point. The point I intended to make was that it streamlines operations and will cut down on costs but Deputy Healy made the good point, which I hope can be examined on Committee Stage, that companies cannot abuse that. I hope the property companies to which he referred cannot use this to circumvent important accountability, which is allowing all the shareholders or owners of the properties to come together. I hope that has been addressed already through the legislation but it might be an issue to be addressed on Committee Stage.

Clarification on directors' loans to ensure they are properly documented is welcome and will inevitably lead to a greater level of transparency and responsibility. I particularly welcome the categorisation on directors' offences, mentioned by a previous speaker, with a maximum fine of up to €500,000 and custodial sentences. It is fair to say that the vast majority of the public does not believe that white collar crime is taken seriously in this country and that there is a serious gap in enforcement. I welcome this measure in the Bill and hope it will be carried through because having the tools in place is one thing but they must be enforced.

The Bill contains a variety of ways to reduce red tape but we must have a balance in that regard. We do not want to fall into the late 1990s and early noughties trap of laissez-fairemarkets, light touch regulation and the market, the companies and the banks always knowing best. They do not. There is a careful balance to be struck and for me, red tape is the non-value added bureaucracy, administration and so forth. I welcome everything that reduces what I see as red tape, which is the bad stuff, and I hope the Minister will be cognisant that globally we got this badly wrong in the past in terms of letting the markets do whatever they want. I hope we do not end up making some of those same mistakes in an attempt to make the environment for doing business as reasonable as possible.

While we are talking about company law and job creation making things easier I want to put some ideas to the Minister of State to bring to the Minister, Deputy Bruton, for consideration, one of which is a tax deductible scheme for employees to invest in their own businesses. I asked a venture capitalist in London last year why he thought the modus operandifor entrepreneurs in Ireland appears to be to start a company and sell it as quickly as possible for €100,000, €500,000, €1 million or €10 million. In the media we celebrate the sale; the sale is the success. I lived in Boston, which is one of the main venture capital and entrepreneurial hubs in the world, and that is not how the people there think. It is not how they think in Silicon Valley or in London. I asked him why we appear so obsessed with selling the company to Google or whoever as soon as it is worth something. He said that one peculiarity of business and entrepreneurship in Ireland is that the people who set it up try to hold on to all of the equity. They will cede equity to people who invest in the first round, second round etc. but his observation was that culturally we do not like sharing out equity.

There is research that shows when employees have bought in, various good things happen. I am positing. I have nothing to back this up but if more employees own the company or have bought in to the company we might be able to retain them as Irish companies for longer and grow them, as they do in other countries, rather than what seems to be this obsession with getting it in for three years and then flogging it for as much money as we can get. A tax deductible scheme to allow employees buy in to the equity in their firms might be an interesting proposal for consideration.

In the vein of the red tape in the Bill I would like the Government to examine the number of certificates companies need to operate. They need items from the Health Service Executive and from the council for change of use. I am told some businesses can need up to 21 different licences to trade. A good deal of streamlining could be done in this Bill, and much of it may need to include the councils.

I am out of time so I will briefly mention some of the other issues. The upward only rent review is something the Oireachtas should have dealt with. It was a pity the courts stepped in in the Bewleys case and made the right decision. I would like to see a hub of innovation centres throughout the country. There is huge opportunity in that regard. I have seen similar models in the United States and in Germany whereby the state essentially subsidises small office units for one, two or three entrepreneurs. They have shared services and high-access broadband. They can bring in training around accounting, entrepreneurship and these hubs of entrepreneurship are created. The most important facet of them all is that 20, 30 or 40 entrepreneurs across ten or 20 different business are all sharing ideas and expertise. There are a small number of examples in Ireland but if it could be rolled out strategically it would be very useful.

The county enterprise boards should not be put into the county councils. County councils are not entrepreneurial organisations. Notwithstanding that they might have some fantastic people as members, it is a mistake. It has not happened yet. It is in the area of the Minister, Deputy Hogan, but it is not a good idea.

I encourage the Government and the Minister for Finance to give more funding to the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, for the venture capital fund. This fund is a fantastic idea and it can leverage more money. Currently, the fund is approximately €18 million a year and that is welcome, but it should be ten times that. No doubt the Minister is listening and I hope he will give Deputy Bruton a lot more cash for the fund.

It has been clear as day over the past two years that the social welfare system does not encourage people to work. I have tried to give people short-term work for five days a week, but they have told me that the social welfare offices have told them they cannot take that work. They can work for three days a week, but if they do five days they lose all their benefits. There are clearly opportunities to make this area more flexible.

Another issue concerns both the Minister and, probably, the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte. The ESB has a fibre optic network throughout the country, but most of it is dark. I understand the ESB is asking for too much money to connect people to it, because, understandably, it wants to recoup its costs. However, I am aware that some very exciting businesses were not established in various places around the country because they needed connectivity and a lot of bandwidth. The ESB was the only way of providing that facility, but the amount of money it sought meant these businesses did not get set up. I believe there is a great opportunity for public value for the State to subsidise the lighting of some of this dark fibre for companies. This would lead to more jobs, tax receipts, etc.

I thank the Ceann Comhairle for the extra time and I commend the Minister and his officials on the introduction of the Bill to the House. It is a fantastic step forward.

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