Dáil debates

Wednesday, 5 February 2014

Companies (Amendment) Bill 2014: Second Stage (Resumed) [Private Members]

 

6:35 pm

Photo of Peadar TóibínPeadar Tóibín (Meath West, Sinn Fein) | Oireachtas source

Cuirim fáilte roimh an mBille. Tá an Teachta Donnelly tar éis chuid mhaith obair a dhéanamh ar son gnólachtaí na hÉireann. Ag amanna mar seo, séanann an Rialtas smaointe maithe ón bhFreasúra. Iarraim ar an Aire glacadh leis an mBille seo agus na smaointe atá ann.

Strong indigenous enterprise sectors are the backbone of economies throughout the world because they provide stable employment. Indigenous businesses are not characterised by the volatility of foreign direct investment. They tend to grow in a more organic fashion and become more embedded in the economy. I say this not to devalue FDI but to seek redress in the imbalance in policy. To this Government, small indigenous businesses are the poor relations. Thousands of businesses throughout this State are hanging on with their finger tips in the worst economic storm since the 1920s and with blockages including energy costs, upward only rents and business rates.

The micro-enterprise development sector has not moved on since the days Batt O'Keeffe was Minister. I am aware that a Bill is currently before the Oireachtas but on a practical level, micro-enterprises are not being supported in the towns and villages across the State. We have a two tier economy and growth, anaemic though it is, is only seen inside of the M50. Business debt is putting a brake on the country's opportunities for growth. The last four years have shaken out thousands of businesses because of insolvency. Last year, 1,365 companies closed due to insolvency, of which 375 were in the construction sector, 190 in retail and 163 in hospitality. The motor industry recorded a 43% increase in insolvencies last year. Bankruptcies increased, as did the number of Irish people going bankrupt in England. We are potentially facing an avalanche of 7,000 bankruptcies in this State next year.

The examinership system is a curious thing. It seeks to rescue business from insolvency only where they have sufficient money to cover the enormous costs that arise. As a result, last year only 5% of businesses with unsustainable debt opted for examinership. Another example of Government dysfunction is the fact that businesses are being forced into the examinership process in order to rid themselves of the anti-business crisis of upward only rents. I welcome that the Government introduced new regulations last year but it is difficult to get clarity on how individual judges will adjudicate on upward only rent cases. Business will continue to worry that disgruntled landlords might force them to the High Court. I welcome the greater influence that the Bill affords to examiners, particularly in regard to lending conditions and leases. The balance this will help to bring is good for business, employees and society.

The environment within which businesses engage with the Government requires reform. The Government has introduced a number of positive initiatives in the last several years but they have enjoyed limited take up due to a lack of education and knowledge amongst businesses. In light of recent reforms, it is important that the Government educates business on how they can best engage with the system. I have previously suggested that the Government should establish an Enterprise Ireland emergency enterprise team with the skills to advise businesses in crisis before they go down the route of examinership. By carrying out these initiatives, we will be looking at fewer than 1,375 insolvencies next year.

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