Tuesday, 10 December 2019
OECD Report on SME and Entrepreneurship Policy in Ireland: Statements
I am happy to speak on this matter. SMEs are a critical part of our overall economy, as the Minister said. While corporation taxes and the high visibility of the multinationals get almost all of the attention, it is our SMEs that generate most of the work in this country. SMEs are particularly important for the labour market in Ireland, no more so than in the Minister's county of Monaghan. They generate more than 70% of all jobs in the non-financial business economy and this is approximately four percentage points more than the EU average, which is a good thing.
That said, it is clear, and has been clear for some time, that Irish SMEs still face significant challenges, especially around bureaucracy, red tape and high costs, in particular the cost of insurance, which the Government has failed abysmally to deal with in any way. The OECD report accepts that while Ireland is a successful generator of SMEs and the sector is innovative, business dynamism and the start-up rate are relatively low. Irish SMEs are also not very active in international markets and SME productivity growth is reported as stagnant.
Two of the greatest challenges for SMEs in the last number of years have been the commercial rates system and the rejection level for bank finance applications from SMEs. The rates are crippling and people get nothing for them. They pay the rates but the whole appeals system is bureaucratic. With regard to the rejection level for bank finance applications, the banks are dúnta, they are closed. They are not operating for small businesses or for anyone else, except big business. This is after we bailed them out, which is ridiculous. It is rejection after rejection. They are not open for business, whether it is for business loans, for householders or for people trying to buy homes. It annoys me that they have these big campaigns, with 300 people in a hotel, talking about all the money they are going to roll out. They are dúnta, they are shut for business, they are not working. However, the Government is blind to that, like the last Government and the one before that. The Central Bank, in its report on this matter earlier this year, highlighted the rejection rate as being about 15%. The experience of many SMEs, however, is that the rejection rate is well above this.
As for the current commercial rates system, we know that in the last two years alone, local authorities collected more than €4 billion in rates. What do small business people get back for that? Zilch. There was a time when they would get services, such as refuse services and the salting of the roads, but they get nothing now. The county councils have literally abandoned the people. Just like it banished big Phil the destroyer, the Government has banished all the local town councils. It has taken away democracy from the people and given nothing back. They get nothing for the rates, and the Minister knows that better than I do. They have to pay them, whereas bigger businesses can put up a sign to say a business is for rent or for sale, and they get back a massive rebate. Tipperary County Council acknowledged this and tried to change it at its most recent budget meeting.
Small businesses like those in Tipperary town have literally been facing ruin because they cannot get exemptions or decreases in rates, even when there is a collapse in business due to the activity of the local authority with roadworks. They spent the last year digging up the streets in Tipperary town. Would the council contact or notify people, or listen to them? No. It is pure arrogance. They can get these rates like a punitive tax and people get nothing in return. Despite the fact businesses are closing down or staying open by the skin of their teeth, there is no support for them. SMEs need support. They must be listened to and respected for what they do. They are the key provider of employment in towns and villages in rural Ireland, and they include many small farms, which are also SMEs. They need less Government interference and the adoption of measures that can make a difference in the real world but they are bogged down with endless red tape or complicated application processes for grant support.
We have all of these roll-outs. The Minister, Deputy Ring, is great at announcing money for this, that and the other, but getting it is another thing. Live horse and you will get grass, it is said, but the money is going back unspent. Self-employed people are getting tired of the bureaucracy, of Revenue, of the sheriff and of punitive charges. They are fed up with the banks because the banks are not functioning for them. We all paid our taxes to bail out the banks and our grandchildren will be paying for that but we get nothing back from the banks and they are not even listening.
Ministers are heedless of the situation for small businesses but they will know when they go to the election because the people are waiting for them. Some of them are waiting with pitchforks and any other weapons they have to make sure the Government will not come near them. Ministers do not understand, do not listen and are not interested in the people, good, bad or indifferent. The Minister can shake her head all she likes but that is the fact of the matter. They are asleep at the wheel. Businesses are under savage pressure and there is mental illness and everything else because of the pressure of trying to compete, pay PRSI, pay this new charge, that new charge or this new course.
If it is not hazard analysis and critical control point, HACCP, it is something else coming down on top of them - not HIQA, which operates in the hospitals, although it will not look at the trolley crisis. It is bureaucracy. There are legions of people going around with briefcases. They cannot help the businesses. There is the National Employment Rights Authority, NERA, as well as everything else. These bodies are there to close down and punish businesses. They never come in and ask whether they can help them, whether there is any way an open day could be held or whether they could give a little advice on the problems the businesses have. These bodies tell the businesses what is wrong and when to get it fixed. If they do not get it fixed, they face heavy and punitive fines. These struggling people are the backbone of our business, our industry. Of course I welcome the multinational businesses coming here but the small business people do not get the huge enticements to come here yet they stay here. They have been here for the long run but they are growing very tired now. You can bring the horse to water but you cannot make him drink. If the Minister does not wake up and do something, many of these businesses will disappear.