John McGuinness (Carlow-Kilkenny, Fianna Fail) | Oireachtas source

I spent most of my life being self-employed before I was elected to this House in 1997. During the course of that time and my involvement in several businesses, which employed 30 people, there was little support for the SME sector. I consider myself to be very much part of the micro-section of that sector. Nothing much has changed. If anything, it has got worse. For example, I believe winding down the county enterprise boards and re-branding them as local enterprise offices as part of the county councils will prove to be a retrograde step. The county councils have no real knowledge of business or enterprise skills within their organisation to deal with this. By and large, the LEOs will be simply administrators dealing with what they call small businesses but what are really businesses within niche markets that do not touch the high street, the brand names on the high street or many other sectors that need support and help.

The situation is likewise in respect of the general policy within the Department and as it filters down to Enterprise Ireland or IDA Ireland clients. I believe all enterprise policy, activity and the logistics in terms of trade missions should be centred in one Department, that is the Department with responsibility for enterprise. I do not see a role for the Department of Foreign affairs and Trade or for people who, generally speaking, have been trained in diplomacy but not in business promotion or accommodating business techniques abroad. This is an important market for us but one that requires skill, engagement and risk. I do not see anyone else with those ingredients except business people. The Department needs to learn a great deal more about how that business is done at home and abroad.

The Government's amendment and what has been said in the House show that governments can change but the attitude of those who manage Departments that engage with enterprise does not. For example, the Government claims to recognises the improvement in the tax environment for small and medium-sized enterprises. However, there has been no improvement in the tax environment for SMEs. Government Members should ask retailers in the high street or small-business people in industrial estates about this.

I am talking about family-owned businesses that are owned by individuals, businesses that have been there for generations. An awful lot of them have closed because of the lack of understanding of Governments in regard to tax issues that affect the SME sector.

The Minister of State talks in his amendment about the new sources of finance that are being made available to the SME sector. I can tell him that despite the billions of euro that have been put by the Government into our banks, which was meant to be for small businesses, very little of that has gone towards the restructuring of loans or the support of the SME sector. Since 2008, businesses have spent every single cent they have earned in order to keep open or to pay for the loans they could qualify for. Some of them were hanging on out of sheer pride because the business might have been in the family for generations.

The banks have failed to restructure loans that are perhaps not central to the core business and they have failed to give the opportunity to business people to perform. I have never seen as many businesses within the SME sector almost imprisoned by the banks and put into a state of limbo because they cannot transact or do business given the fact they do not have a supportive bank. At the same time, they cannot get out of their banking arrangements because that is the bank they have made the arrangements with, and no other financial institution will take them. They would have a good core business if only they were released to do that business.

I suggest that the credit unions, which have some €7 billion in total, be asked to contribute in some way to the support of the SME sector. They are the only ones that truly understand what a business means to a community and how to support business. Whatever is needed from the Central Bank, the credit unions should be facilitated.

There is a German public bank that is saying to us here in Ireland that this is the model we should follow. It was not affected at all by the downturn in the banking sector because of the way in which it managed its affairs. It supports businesses throughout Germany. That model works for it and it should be encouraged by the Central Bank and the Government to set up in Ireland in order to give an opportunity to those who have good business ideas to come forward, be funded and be successful.

There was a time in this country when 1.2 million people were employed within the SME sector but that must have nearly halved by now. Many of our entrepreneurs have gone to other countries because the environment for doing business is not what it should be for the SME sector. The Minister of State spoke about the new focus on start-ups. There is no focus on start-ups. The LEOs have no idea how to support a start-up business. The businesses that are in business and have been successful over the years are finding it difficult to get the financial support, the expertise, the mentoring and, indeed, the tax environment that would assist them in passing their business from one generation to another.

The Minister of State pointed to the success of the Pathways to Work strategy and he suggested other initiatives taken by the Government in this regard. It just has not worked. We do not see businesses taking on the number of people they need because there is no real financial incentive for them to do it. Vouchers could be used for mentoring or for many other aspects of buying in professional opinion for a business but that has not been embarked upon.

Last but not least, the Minister of State said the Government resolves to continue to engage with SMEs. What do the SMEs ask for? When the Minister of State talks about microfinance, credit finance and the Strategic Banking Corporation of Ireland, it is alien to them. They are simply interested in a bank that understands business, that will facilitate them, that will give them loans and that will assist them out of their debt in terms of restructuring. It not that they will not pay but a question of accommodating them in order to pay. It needs a Government that understands governance. How can the Government fit the same straitjacket of governance on every single business? It just cannot be done because small businesses cannot carry the cost of that burden.

What is the burden? It is when ten different Government agencies call to business premises on a very regular basis and go through paperwork in a way that treats business people like criminals and asks them to respond immediately or forthwith. That is not understanding from Government. In my opinion, that is bullying by the State agencies of small businesses that are attempting to the best of their ability to comply with over-regulation. Departments or bureaucrats can put out figures and say to the public that they have reduced costs by a value of €25 million. The Minister of State can ask any business in a high street or an industrial estate whether that is a fact and they will tell him it is not.

A further point concerns procurement. If anyone wants to see how the Government really thinks about small businesses, just look at the procurement process. It is so out of reach of the SME sector that the SMEs cannot compete. The Government suggests they should collaborate with their opposition in business in order to get the contracts. What absolute nonsense that is. There is €9 billion at stake. I can tell the Minister of State that the small business people, particularly in the area of stationery or machinery supply to Government, are simply not satisfied with the moves the Government is making.

I appeal to the Minister of State, by way of conclusion, to put to one side all the nonsense and gobbledygook that the bureaucrats give to him about what is happening to small businesses and to listen to the small business sector. I am going to launch a business document this week which covers every single aspect of business. I ask that it be examined in the context of real support for the small businesses that have made this country over the years.

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