Kieran O'Donnell (Limerick City, Fine Gael) | Oireachtas source

I am delighted to contribute to the debate on this Bill, which is very welcome. My general view is that new legislation is not always needed. In many cases, the old legislation should be reviewed to see how it can be made fit for purpose and suitable for modern use. Much of the legislation that was introduced over many years is never used, or is not used properly. This Bill will consolidate the various enactments associated with the Companies Act 1963, with which we are all familiar as the source of more or less all our company law. Having operated in this area over many years, I know this legislation will make life much easier. Up to now, practitioners have had to pore over rafts of property legislation and cross-reference it. This Bill will consolidate all aspects of property law. It will improve our competitiveness as a country, make it much easier to do business and reduce red tape.

I would like to comment on a couple of aspects of the legislation that have struck me. Two directors will no longer be required. One director will suffice. That will make it much easier and much more streamlined. Changes have been made over the years. There used to be a requirement for two shareholders and two directors. That was changed to require one shareholder and two directors. It has now gone a stage further. The new approach, involving one shareholder and one director, will make it much more streamlined. The approach being taken with regard to AGMs will also be much more streamlined. It will be a case of ensuring the proper procedure is in place, rather than requiring the holding of meetings that might not be fit for the purposes of the modern company.

I have used the term "examination lite" to describe one of the provisions of the Bill. Companies of a certain size will no longer have to go to the High Court in cases of examinership. If they satisfy two of three criteria - having a balance sheet of less than €4.4 million, having a turnover of less than €8.8 billion and having fewer than 50 employees - they will be able to take the examinership route through the Circuit Court rather than the High Court. That is very much to be welcomed.

I would like to speak generally about the small business sector, particularly in the domestic economy. The Minister will be aware that SMEs are under enormous pressure at present. We are looking at restructuring home loans and mortgages, which is extremely important, but it is just as important to restructure SME loans. Many companies operated soundly for many years until the Celtic tiger era, when the banks insisted on them having property as security. Many of them invested their returns and borrowed heavily to invest in property. Many of them are still making money from their core businesses, even if they are under pressure in that regard, but they are being dragged down by property debt. I ask the Government and the Minister to meet the needs of the SME sector by pushing for the decoupling of SME property debt from the core business of SMEs. Many of these businesses employ large numbers of people. They are being dragged down because they are servicing debt on properties that, in many cases, are not worth a fraction of what was paid for them. The properties in question are likely to be in negative equity and are probably not yielding rents. I feel strongly that this has to be taken on board.

If this economy is to continue the way it is going and to have real and substantial growth, we have to look after our SMEs. While I accept that foreign direct investment is hugely important for our economy, I feel that the SME sector is just as important if not more so. The companies throughout the country that employ five, six, seven or ten people were established by entrepreneurs. We have to create an entrepreneurial culture in which people take risks. Many SMEs are drowning under debt that is related to property rather than to their core business. This must be the next phase of the restructuring of debt. Our national debt has been stabilised. Banking debt is still an issue. Personal debt is being looked at under the insolvency legislation, as is the whole issue with mortgages. The decoupling of SME property debt from the core business of SMEs has to be a key focus for the Government. I will pursue this matter with the Minister, Deputy Bruton, and his colleagues. We have to look at it.

I welcome the fact that the credit guarantee scheme is now up and running. The latest figures suggest that over €3 million has been provided by way of facilities. That has had an impact on over 200 jobs - 180 new jobs and 25 existing jobs which have been maintained. It is extremely important. People are often unaware that every manufacturing job that is created has an indirect impact on another 2.5 jobs. It affects 3.5 jobs in total. It is something that we have to push on.

The JobsPlus initiative will take people off the live register and put them into jobs. The incentive for the employer is to be paid €1 for every €4 it costs to hire someone. That is coming on stream.

I would like to mention something of a more macro nature. We are spending over €20 billion a year on social welfare. There will have to be a greater focus on labour activation measures. We have to look at measures that will get people back to work. I do not doubt that the JobsPlus initiative will feed into that. It will be an extremely important labour activation measure.

The creation of jobs is the key challenge nationally and in my constituency of Limerick City.

In the last two years since we have come into government, there have been 15 IDA-backed jobs announcements yielding over 1,100 jobs. I compliment the Minister and everyone involved. I will continue to have discussions with the Minister, Deputy Bruton, the IDA and the other stakeholders. With the amalgamation of Limerick city and county, there is now a designated economic director, Mr. Tom Enright, and a joint overall manager, Mr. Con Murray, who are very pro-business and pushing very much the redevelopment of the city and the county. Promoting Limerick as a tremendous destination in which to live and do business is an issue on which I feel strongly.

To put this in context, we must ask how jobs evolve into an area. Last October, I took a phone call from a Mr. Lloyd Nolan from Limerick city, who happens to be the vice president of an American multinational company. He wanted to consolidate the European operations in Limerick so we got him talking to the IDA and discussions took place. One month ago, the Minister, Deputy Bruton, came down for the announcement of 62 high-tech jobs in the middle of Limerick city. That is what it is about. It is not always about the big announcements, although they are extremely important. It is about linking with the diaspora and with people who have connections with an area, and it is about supporting the SME sector.

We have had all the talk about restructuring our national debt, banking debt and personal debt. However, the SME sector, which is the lifeblood of this economy, is under enormous pressure and it is extremely important everyone is aware of this. I ask that a specific policy be put in place to decouple property debt for the SME sector from its real business because I believe this is costing jobs. These companies and businesses are not able to continue to trade because they cannot pay their debts in respect of property loans, which is dragging down their business.

In summary, I congratulate the Minister, Deputy Bruton, and his colleagues on this Bill, which is extremely pro-business and long overdue. Where there is consolidation of existing legislation across a range of sectors, it should be the blueprint for other areas and should be put in place. However, I want the Minister to take on board the point on the SME sector and to tackle its level of debt in order to allow the core businesses to survive and prosper. These are the groups that will, along with FDI, generate the key employment to bring us back to sustainable and healthy long-term growth figures.

See this speech in context