John Halligan (Waterford, Independent) | Oireachtas source

I compliment Fianna Fáil on tabling an excellent Private Members' motion. As I do not have as much time to speak on it as I would like, I will concentrate on the SME sector in terms of sustaining economic recovery and supporting job creation. Almost 1,600 SMEs went to the wall over a period of two and half years, and it is estimated that another 800 to 900 are struggling. Coincidentally, before I knew this motion would come before the Dáil, last week I met a number of people representing small to medium enterprises in Waterford and they told me of difficulty they have in getting footfall into businesses and in accessing finance to sustain or grow their businesses. All SMEs would say that high rent, high rates and having to pay wages are the big worries they have, but they would add to those the word "austerity".

A firm in Waterford, Kellys, which had been in business since the Famine, has closed. It was able to beat the Famine but it could not beat this recession. The manager of that firm said it comes down to footfall. People are not coming in because they simply do not have the money. He believes the final nail in the coffin was the property tax which has meant people have had to cut back more.

Deputy Doherty spoke about how the banks drooled over many of these firms in the good times and fired money out to them, but now they are being drilled into, as it were. I have spoken to people in small businesses and they have told me it is almost impossible for them to get funding from the banks. The banks send them questionnaires and proposals as to how the businesses can save money. Some of the proposals recommending that jobs be cut are outrageous. I know of one small firm in which the husband and wife are the only ones left working, and they work 70 to 80 hours a week. They are at the end of their tether. They have had to let go the one person they employed. They have to do the accounts and all other aspects of the business. They have told me that they might make it to Christmas but they do not know if they will. They do not have money. They went to their bank and asked if it could help them through but were told it could not because it does not see their business as being viable because there are only two of them, they are struggling, they have had to let people go and it does not know if their business will survive. They are in a catch-22 situation or a vicious circle where they need a few bob to get them through and the bank does not see them as being viable. It is not their fault they are in this position. People do not support their business because they do not have the money to do so.

There is also a knock-on effect with the quality of working conditions. There is less money, fewer hours and less spending because austerity affects the people's quality of life. Many small businesses are restricted to paying the minimum wage. They will say that is all they can pay. Therefore, their workers are unhappy and barely struggling. Some of them use the minimum hours contracts where one is signed up for perhaps four hours and one is almost a slave to the company, which is no fault of the company because it is struggling. Those people cannot sign on social welfare and they have very little wages over the week. They in turn cannot spend money in SMEs and that is the vicious circle that continues.

I accept it would be difficult for the Minister to do this but it would be worthwhile if he were to pop into small businesses and ask them what the problem is and they will respond by saying it is rent, rates, wages and austerity. I am not making an ideological argument that it all comes down to austerity. People will tell the Minister that because there is less spending in the economy, there is less spending in businesses and that has a knock-on effect. I refer again to the 1,600 businesses that have gone to the wall and the many more that are struggling. They are seeking new measures, incentives and ideas that can help them through, but one cannot beat an input of financial backing. I refer again to that small company that might go to the wall after Christmas which probably could survive if it had a little bit of help from the bank that tells them it is not doing well. If that is the response banks give to SMEs because very many of them are not doing well, they have no hope of getting finance. Where will that leave us?

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