Pat Breen (Clare, Fine Gael) | Oireachtas source

I welcome the opportunity to contribute to the debate on the budget which was prepared in the light of the difficult challenge facing the Government in the coming weeks, namely, the possibility of a hard Brexit. From the perspective of my Department, it was important that the Minister announced a suite of supports for business, including repayable grants and lending schemes that will be available for deployment in the event of a disorderly Brexit. These are targeted at supporting vulnerable but viable firms and build on the many supports introduced by the Government in the past three years. It is noteworthy that they have been designed using the feedback of businesses and will ensure Irish enterprise is able to respond to the challenges that a no-deal Brexit presents. This is an initial tranche of emergency funding that can be built upon as circumstances evolve in consultation with the Minister for Finance and Public Expenditure and Reform.

These supports will be critical in the highly vulnerable Border areas and in supporting exporters who are heavily exposed to the UK market. Supports announced by the Minister for Finance in his Budget Statement include a rescue and restructuring fund of €42 million, which is available to address the needs of firms in sectors with acute liquidity and other severe difficulties as a result of a disorderly Brexit. The funding will be provided will be provided in the form of equity or loans through Enterprise Ireland and it will be available to eligible Enterprise Ireland, IDA Ireland and Udarás na Gaeltachta clients as well as eligible non-agency clients. A further transition fund of €45 million will support businesses in the manufacturing and internationally traded services sector ranging from food and engineering firms to business process outsourcing firms. It will help those businesses to adapt their business mode as needed and adjust to the new trading reality. This fund will be delivered also through Enterprise Ireland and available to eligible Enterprise Ireland, IDA Ireland and Udarás na Gaeltachta clients as well as eligible non-agency clients.

Targeted supports for small and micro enterprises will also be essential to limit the impact of a disorderly Brexit. In that regard, budget 2020 includes two related measures to support these businesses. We will increase our funding to Microfinance Ireland to allow it to increase the amount that it can lend to microenterprises from €25,000 to €50,000 over a two to five-year period at a very competitive rate. Second, an emergency Brexit fund of €5 million will be available for microenterprises by way of repayable grants available through the local enterprise offices, LEOs, of up to €50,000. Such qualifying enterprises will have recourse to Microfinance Ireland where they can receive up to €50,000 in loans over a two to five-year period and if required, could avail of a further €50,000 in a repayable grant from their local enterprise office.

The Government is also introducing a transformation fund of €8 million to be administered by Enterprise Ireland. It is a grant scheme supporting larger indigenous firms to transform their business to develop new products and processes, to remain competitive and to assist in diversifying to new markets. There will be initial funding of €5 million for primary food processing companies and €3 million for non-food companies, for example, in traditional engineering sectors. Additional funding for food transformation is also being made available through the Department of Agriculture, Food and the Marine.

I also welcome the taxation measures announced by the Minister for Finance specifically targeted at SMEs, including significant changes to the research and development tax credit, particularly for small and micro firms which will be able to claim a higher rate of credit of 30% and will have improved options with regard to claiming the payable credit. These firms will also be able to claim the credit for expenditure incurred in advance of commencing to trade.

Changes to the research and development tax credit scheme will help enterprises on their innovation journey and increase their productivity, which will be a key focus of the Future Jobs Ireland agenda.

I wish to be clear that the Government is determined to plan ahead and prepare for the jobs of tomorrow, notwithstanding Brexit and other international challenges such as trade wars. This is evident in recent announcements on other significant funding initiatives such as the regional enterprise development fund, the disruptive technology innovation fund and, most recently, the €2.5 million competitive fund for the local enterprise offices. All of the measures announced will ensure micro-enterprises and SMEs in every region can be prepared as soon as possible for a disorderly Brexit. They will be on the ball.

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