Denis Naughten (Roscommon-South Leitrim, Independent) | Oireachtas source

I welcome the opportunity to speak on this Bill. Local businesses around the country are the backbone of the Irish economy. Approximately 80,000 such firms across the country employ an estimated 800,000 people and are putting billions of euro into the economy on an ongoing basis. Unless we can support indigenous, local companies, we will not create the numbers of jobs that we need to curb the haemorrhage of emigration and address our high levels of unemployment. As politicians, we will not create jobs. What we must do is try to make it easier for businesses to invest, hire staff and maintain existing jobs so that employers can look to the future with confidence. We must put the necessary support structures in place.

The biggest concern I have regarding the legislation before us has already been articulated by the Small Firms Association. In its submission to the Joint Oireachtas Committee on Jobs, Enterprise and Innovation, the association expressed concern about the poor relationship that exists between the small business community and local authorities. There is a strong perception among business people that the key objective of local authorities is to extract as much money as possible from employers. There is a fear that such an attitude to small businesses will filter through to the new enterprise board structures within local authorities. It is vitally important that the skills and expertise that have been built up over many years in the county enterprise boards are transferred into the local authorities. I must say that there are some very good local authority officials with a very progressive and open attitude who will do everything they can to support local businesses, particularly those that are starting up. However, there are also local authority officials who, rather than assisting people in setting up a new business will give them ten reasons that business will not get off the ground and will fail and why they should not go ahead with their project. That type of attitude must be eradicated, not just from local authorities but from the public sector in its entirety. We see that attitude in Government agencies and Departments and it must be challenged. There is enormous potential to tap into the resource that exists within local authorities and the knowledge that has been built up over decades but local authorities must be given the tools to assist the small business sector. They must be given flexibility in terms of how they structure their commercial rates, for example, which they do not have at present.

I am seriously concerned about the fact that local authorities will be expected to put up matching funding. In my county and in every other county in the country, the local authority does not even have the funding to repair local authority housing, never mind coming up with matching funding. That must be clarified by the Minister. The Department has a number of commendable objectives, including increasing the number of start-up businesses and the number which survive beyond the first five years. It also aims to increase the numbers of women starting up their own businesses and to support micro-businesses in developing export trade and driving job creation. All of that is very well and good but it is not specifically mentioned in the legislation, which is a fundamental flaw. Furthermore, the fact that it is not mentioned in the legislation means that there is no accompanying penalty clause when local authorities fail to meet the aforementioned objectives. Where local authorities fail dismally to achieve particular targets, some type of penalty should be imposed.

When the Minister responds to the debate later, I hope he will clarify an issue that was raised by my colleague, Deputy Timmins, a number of weeks ago, namely the administration costs in some county enterprise boards. The administration costs of the county enterprise board in Offaly, for example, are only slightly less than the amount of grant aid paid out by the board, while in Leitrim last year, the administration costs were actually higher than the grant aid provided by the board. I know there is a problem for many of the weaker counties in terms of getting access to funds. Funding should be front-loaded for those counties that are not tapping into foreign direct investment. Counties like Roscommon and Leitrim, for example, do not have a strong population base and are less attractive for foreign direct investment and should, therefore, be getting the lion's share of the funding for local micro-businesses in order to bring about some balance.

I hope the anomalies with regard to the ten employee threshold will be addressed. Furthermore, there are companies which are over that threshold and are involved in the food sector which Enterprise Ireland has shown very little interest in to date. I hope that the new attitude that is developing within the enterprise sector will include looking at job creation for its own sake and not just focusing on the issue of export-led growth. Import substitution and job creation must be given greater priority than has been the case heretofore.

I wish to put four proposals to the Minister of State, Deputy Perry, which can support and enhance opportunities for local businesses around the country. They are practical proposals, some of which are easier to implement than others. My first proposal is a simple one and I would ask the Minister of State to take ownership of it. I have already put it to the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, but he has washed his hands of it, as has his Department, which argued that it is a matter for the Department of Jobs, Enterprise and Innovation.

I refer to the establishment of an internationally recognised quality mark for websites based in this jurisdiction. We have had reports during the week concerning the Road Safety Authority which revealed that a rogue website in the UK is charging consumers an extra €20 to book a driving test. In one particular instance 4,300 people paid an extra €20 to get a legitimate driving test in this jurisdiction.

A recent report by the European Consumer Centre network which examined fraud in cross-Border e-commerce found that fraud was involved in the sale of tickets, counterfeit products, alleged free trials, phishing, and the purchase of used cars online. A total of 30% of participants in the survey reported instances of consumers being caught out with free trials that were not free. A proliferation of counterfeit goods was reported by 41% of survey participants. A Maltese consumer who ordered tickets for a football match from an online trader paid €827 for the tickets only to be informed subsequently by the trader that the tickets were no longer available and that he would receive a refund but he has not received it to date.

Irish consumers spend approximately €4 billion a year on online shopping. Right across Europe and the world a huge amount of online trading is taking place but people are very concerned about putting their details online and whether they will get the goods for which they have paid. There is a niche in the sense that no internationally recognised quality mark exists for online trading. Ireland could take the lead in that regard and established a quality mark for businesses based in this jurisdiction. The information already exists but it is not easily accessible to consumers. If we put the facility in place for businesses based in this country it would create new jobs in IT and also distribution. Ireland could become for websites and online trading what Switzerland is to the banking sector. There is no reason not to do it. We have the data centres and some of the biggest online traders and online businesses such as Google are already in this country. We have the capability within the NSAI to do it. It has international contacts. Let us establish an internationally recognised quality mark in Ireland and use it as a driver to create new businesses, not only foreign direct investment but indigenous businesses that could sell on a worldwide basis.

Many speakers have referred to the need to incentivise and support local businesses. I urge the Minister of State, Deputy Perry, to do one thing only, namely, give them the same opportunities and supports we give to American multinationals coming into this country. They should have the exact same incentives on taxation, grant aid and supports. A level playing pitch should be provided. One job created by a local business in Sligo, Roscommon, Galway or Leitrim pays a greater dividend to the economy than a foreign direct investment job yet we have structured our incentives, supports and taxation the other way around which penalises indigenous business. Simplifying the taxation and PRSI system, in particular for start-up businesses, would encourage them to get off the ground in the first place.

I will provide an example of the crazy logic of our taxation system. It is another issue the Minister of State might examine. I refer to capital gains tax. We have a bizarre situation where we incentivise people with cash to put it into a property, sit on it for a number of years and then dispose of it when the market rises rather than incentivising someone to take the cash and put it into a new business that is trying to get off the ground or an existing business that wants to create jobs. People should be facilitated to invest in jobs and new enterprise. Does that not make far more sense in terms of long-term sustainability instead of trying to facilitate and encourage another property bubble in this country? The Minister of State should change the ingrained thinking within the Department of Finance that investment must be in bricks and mortar and nothing else. Let us start to create and support jobs. Let us also create a level playing pitch for indigenous local jobs as we do for foreign direct investment.

Another issue for the Minister of State to examine is energy. It is politically sensitive at the moment, in particular in our part of the country. The suggestion and proposal I have relates to an area just north of the border in Wales. The Minister of State, who is from Sligo, is not too far from the Border. Just north of the border in Wales there is a very successful carbon loan scheme. Business loans of 0% are available to businesses wishing to invest in energy-efficient and low-carbon equipment. I am aware of a business in my constituency that could create ten new jobs tomorrow morning if such an incentive were available to it. The company knows it could save a significant amount of money and that it could be far more competitive by upgrading its energy equipment but it cannot get the capital from the bank at the moment. It must prove to the bank that it does not need the money before the bank will give it a loan. Small business after small business could give similar examples.

The size of the loan on offer north of the border in Wales and its repayment period is based on the projected carbon savings. The Government will be penalised for not making carbon reductions. It is a no-brainer from an economic point of view to give out such interest-free loans. Now that we have access to money from the Germans we should use it to introduce such incentives. A loan of £1,000 sterling is given for every 1.5 tonnes of carbon saved or taken out of the atmosphere on an annual basis. That would achieve two goals; first, it would reduce overall energy consumption and as a result reduce the overall impact of carbon on the environment. It would also reduce the potential penalties we would face in the future. Second, it would drive efficiencies for business and create jobs, such as in the example I provided where ten jobs could be created by a company that currently employs 60 people. The company could employ 70 people tomorrow morning if it had access to such an incentive.

On energy, and given where both the Minister of State and I come from, he is aware that a very detailed proposal has been put forward by the Western Development Commission to bring gas to the west and north west. It would save local businesses in the area €16.5 million every year. If we had access to gas it would save householders approximately €485 a year in energy costs. Currently, businesses in Carrick-on-Shannon lose approximately €7 million per annum because they do not have access to gas. Slightly less than that amount is being lost in Sligo town. Boyle is losing approximately €180,000. Roscommon is losing approximately €1 million. I could go on to specify the amounts lost to other towns in the region. Significant savings could be made by indigenous businesses if they could get access to cheap energy through the gas network.

We are disposing of Bord Gáis by means of selling it off. I suggested that a small proportion of the money raised through the sale be used as seed capital to extend the gas network to the region.

Not only would it dramatically improve the efficiency of businesses in our region, leaving them on a competitive par with businesses in other parts of the country, it would sustain existing jobs and encourage additional job creation. It would also take away some of the pressure in terms of the need for increased electricity energy generation. If combined heat and power plants were put up in many of these businesses, it would take pressure off the existing electricity network and reduce the need to construct additional pylons across the country. I hope the Minister for Communications, Energy and Natural Resources will look into this particular issue again.

My colleague in the Seanad, Senator Fidelma Healy Eames, raised an issue some time ago regarding an employer in the manufacturing sector trying to employ a general operative at 1.5 times the minimum wage but not being able to get anyone to fill that post because of the barriers put up by the social welfare system. Recently, I had an instance of a woman with family illnesses who had a medical card but, because she got an extra hour working in Tesco, lost the card. There was no way around this with the way the medical card eligibility system is structured. The only way to hold on to her medical card was to get her employer to reduce her hours. Instead of encouraging people to take up employment or increase their hours or move into full-time employment, as was this woman’s wish, the system is built against their doing so.

There are many other anomalies that Members have highlighted which undermine the medical card system. These barriers being created to people extending their hours of employment or even taking up full-time employment need to be addressed. In doing so we would be supporting many local businesses across the country and in Ireland as a whole.

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