Mick Wallace (Wexford, Independent) | Oireachtas source

I welcome the Bill proposed by Deputy Donnelly. It introduces a greater element of fairness to the equation, which can only be a good thing. The biggest problem for most SMEs in the past few years has been accessing money. For a lot of people in business, money stopped being available, in some cases overnight and they found it impossible to survive. I listened to the Taoiseach earlier today during Leader's Questions addressing this issue but I did not find his argument to be the most rational.

This debate boils down to public interest versus creditors rights. The Government takes the position that some of the measures in the Bill would require a change to the Constitution but we should test the Constitution to see if that is true. Sometimes we are afraid to test the Constitution, which is unfortunate. We all know that strong property rights are enshrined in our Constitution. Sadly, property rights are much stronger than any rights flowing in the direction of small businesses.

The director of the Small Firms Association has said that due to the cost of applying for examinership to the High Court only 1% of SMEs are currently opting for the examinership process as a way of trading out of their difficulties, with the remaining 99% going into liquidation or receivership. These are pretty stark figures. I acknowledge that the measure introduced by the Government before Christmas was positive and helpful. However, this Bill will give more help to SMEs because it reduces the cost of examinership. Not only does it reduce the cost of examinership itself by cutting down on legal bills, which represent half of the cost of the process, it also gives the examiner new powers to impose lending conditions on secured lenders. This would be a big breakthrough. In fairness, though, the Bill also allows banks to challenge this.

Another very important part of this legislation is that it allows the examiner to impose changes in leases over a period of five years. During the general election campaign there was much talk about upward-only rent reviews and lots of candidates promised to challenge these and to deal with the issue. However, it was not a big surprise that the Government found itself between a rock and hard place on this issue because most of the rent payable in Ireland since the crisis began is payable to the banks. Various financial institutions are the main landlords in Ireland now and the notion that upward-only rent reviews would be abolished was unlikely to go down well with the banking institutions. The banks opposed it and sadly, our Government decided it would stick with the big financial institutions rather than with small businesses. It cannot be mentioned too often that more than 70% of the people in Ireland work in small and medium sized businesses and it is fair to argue that they are entitled to more protection than they have enjoyed to date. Life has been very difficult for small businesses in Ireland for the last few years but the Government has not been very supportive of the sector. There was a lot of talk about making sure the banks were lending to SMEs and about doing this and that.

The reality was that they were left stranded and many of them have disappeared. That is very sad. It would have been worth the Government's energy to make a greater effort to protect SMEs. It would be money well spent and would have prevented much unemployment. The Government puts a far stronger emphasis on creating employment by means of foreign direct investment. I appreciate the significant number of people employed in foreign direct investment companies but in the long term it is unsustainable and some day the Government will have to bite the bullet and start investing in indigenous industry. We do not put a fraction of the same money into it as is given to foreign direct investment.

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