Terence Flanagan (Dublin North East, Independent) | Oireachtas source

I welcome this Bill. I am delighted that the Government is continuing to recognise the importance of the small business sector for the economy. This sector is the backbone of our economy. It provides a significant level of employment. It has the potential to create more employment in the coming years, thereby helping in our economic recovery. The measures contained in this Bill will help the small business sector by facilitating low-cost Circuit Court appearances in cases of examinership. At present, the process must be initiated through the High Court, which makes it quite costly. Thankfully, the numbers have been very small to date. I suppose the numbers were low before the economic crash because the economy was going so well. Just 1% of small and medium sized enterprises resort to examinership. The rest go into receivership or into liquidation. This legislation will give small businesses that may be viable a real option. It will take the pressure off them for a period of time to ascertain whether they can be restructured or reorganised in a way that will allow them to recover, get working and grow.

The economy is going through a difficult time at present. As the Minister of State is aware, the troika has raised the issue of legal cost reductions. It has expressed disappointment that the Government has not yet tackled the question of professional fees. I have no problem saying that as a qualified accountant, I have a vested interest in the issue of the fees of accountants and auditors, which was mentioned by Deputy Creighton. All of these costs have to come down to help small businesses to be more competitive. I recognise that the Minister has fast-tracked this legislation. It was planned that it would form part of the new consolidated companies legislation, but that has been delayed because of the complexity associated with it. I refer to the extensive nature of the consultation process and the fact that the Bill in question runs to over 1,100 pages. We have to accept that.

I would like to mention some figures pertaining to small enterprises that employ fewer than 50 people. The SME sector is a significant employer. According to the figures for 2010, SMEs employ 193,931 of the 622,010 employees in County Dublin, or approximately one third of those in employment in the county. The same thing applies on a nationwide basis. A business will have to meet two of three conditions if it is to be possible for it to be placed under examinership - its balance sheet must not exceed €4.4 million, its turnover must not exceed €8.8 million or the number of employees in the company must not exceed 50. It is certainly a targeted Bill with regard to whether businesses qualify for examinership. As I have said, this legislation will give viable small businesses an opportunity to survive, expand, thrive and continue to contribute to the economy.

I welcome the recent announcement of two schemes that are starting to help small business, the microenterprise loan fund and the credit guarantee scheme. They are starting to make a difference, which is good news from a small business point of view.

There was a recent announcement of the first development capital fund of €125 million to be invested in SMEs, with the money being used to help them expand and generate employment opportunities. The Department of Jobs, Enterprise and Innovation, Enterprise Ireland, AIB and the European Investment Bank will all help with the fund. I have no doubt the Minister for Jobs, Enterprise and Innovation, who is a constituency colleague of mine in Dublin Bay North, will help SMEs in our constituency to benefit from the fund and expand their businesses. The 9% VAT rate is working very well in the tourism industry. Now that the travel tax has gone, the airlines should be able to increase their numbers of passengers and help tourism here.

The Bill will probably result an increase in the number of examinerships each year, as the process will become easier and cheaper. What numbers are expected to go through this process? It has been suggested that additional resources will be needed in the courts to make this workable. Obviously, if there is an increased demand, more resources will be needed and perhaps the Minister of State will comment on that. Will he comment also on reform of the courts system? There is a perception among the public that not enough is being done to extend court sitting hours and introduce greater efficiencies in the operation of the courts and the legal system in general. It is a bit rich for legal people to look for extra resources when more reform is needed. We have started with reform in this House and there is no reason not to have proper legal reform which the public very much demands.

I have concerns over banks refusing credit to SMEs. We hear stories every day from business owners that the banks are very risk averse. Nobody is making decisions within the retail branches. All decisions have to be referred to headquarters and in some instances even further up the line. What help is the Government providing to encourage banks to meet their lending targets? It is felt, rightly, that more needs to be done in the area to get the banks to do what they are meant to be doing.

I attended a meeting today in Sutton with the Minister for Jobs, Enterprise and Innovation about the Action Plan for Jobs. It was a very successful and well-attended meeting. Concern was raised that there is no single website providing information for people considering starting a small business. There is much red tape between various Departments and more work remains to be done in that area.

The Minister of State has responsibility for procurement. There is still confusion about the Government's bundling and unbundling of certain projects, and small businesses feel they are being discriminated against. I know the Minister of State introduced the prompt payments legislation and no doubt most Departments are doing good work in that area. It has been stated, however, that there are delays in getting payments from the HSE and perhaps the Minister of State would follow up on that.

There is a role for business organisation in the leaving certificate curriculum to encourage entrepreneurship. There need to be more case studies of real-life situations in order that young students have it in their minds. There is a great opportunity for young people to get involved in business and that should be encouraged actively.

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