Neasa Hourigan (Dublin Central, Green Party) | Oireachtas source

I will not be sharing time with anybody so the Minister will only have to deal with one Green Party Deputy. I thank the Minister for the update. Despite the implementation and further proposals for some of the largest collective stimulus measures in our history, it seems a partial recovery in 2021 is the best we can expect. Now is the time to act but it is also a time to reflect on how we organise our economy in order to find new ways to structure our economic activity.

I am very heartened to hear the Minister flag the need for new business models. Given the distress that many businesses now face and the increase in savings by individuals, the Green Party believes the co-operative business model could and should provide a core part of rebuilding efforts after Covid-19.

This model of community-based economic organisation ensures that our business community is guided by the principles of economic democracy and that such organisations are rooted in the interests of their localities. They offer not just a new source of financing for businesses, but will help us to build a better, more environmentally conscious and more equitable society.

According to the IMF, the world economy will lose a cumulative €8.1 trillion in output due to Covid-19 over the next two years. This impact will be felt faster and harder than that of the 2008 financial crash. Our economy is expected to contract by 6.8% this year. In a survey from Chambers Ireland, half of SMEs expected their revenues to decline by at least 60% over the next three months. Six out of every ten companies have been forced to seek deferrals on their overheads, mostly on payments to landlords, banks or the Revenue Commissioners.

This is an extraordinary disruption of economic activity. We are potentially heading into one of the worst recessions in our State's history. As the Minister pointed out, unlike in previous recessions, we have strategic national economic strengths on which to draw. Although the nature of employment was variable, unemployment was low, economic growth was steady and consumer spending was strong. This economic downturn will be unlike anything before it, though. The collapse in consumer spending and the resultant cash flow problems that this has resulted in for businesses were not the result of instability in our financial system or the collapse of a property bubble, but the result of social distancing restrictions and the consequential closing of retail outlets, the hospitality sector, businesses, offices and the like. Consumers are not spending because they are unable to do so. Instead, they are saving their money and businesses are struggling with cash flow.

We should take advantage of the situation. We must look to the co-operative business model and begin to promote community-based economic organisations that focus on community wealth. This will provide not just a place for Irish savers to invest their money, but also a new source of financing. The co-operative business should be an integral part of rebuilding our economy post Covid-19. Co-operatives are guided by principles of solidarity and economic democracy and are rooted in their local communities. They run according to the interests of their members rather than some unknown and disconnected shareholder. Studies in the UK have shown that co-operatives create higher profits than conventional businesses and are more likely to survive their first five years of operation. The five largest co-operatives in the UK paid 50% more corporate tax than Amazon, Facebook, Apple, eBay and Starbucks combined. Employees of co-operatives report higher levels of job satisfaction and economic well-being as well as higher rates of productivity. Compared with conventional businesses, co-operatives have lower levels of staff turnover, lower rates of pay inequality and lower rates of absenteeism. Co-operatives must form the foundation of our efforts as we move forward. They would be better for workers, consumers and communities.

The legal, regulatory, auditing and financial institutions of our economy are predominantly designed for private companies and tailored to their needs. As a result, co-operatives operate under a framework that disadvantages them, burdening them with a layer of rules and regulations that equivalent conventional firms do not face. Will the Minister indicate how he might address this competitive disadvantage faced by co-operatives? Will he speak to introducing right-to-own legislation to support employee buy-outs and the co-operatisation of existing businesses?

I have reports from constituents who are being advised by mortgage brokers to wait until three months after their last temporary wage subsidy scheme, TWSS, payments before applying for mortgages. Some have had approved mortgages pulled by pillar banks as they went to draw down their mortgages. Other constituents have had issues with Rebuilding Ireland's home loans, which are provided to people who have already been refused mortgages. While I appreciate that the banks need to be prudent in their lending, it is disheartening to see those that we bailed out being so quick to abandon mortgage applications. From the banks' perspective, I understand that the uncertainty around the Covid payment and the TWSS might not help their decision-making processes. Will the Minister advise when the Government will be in a position to provide a definitive view on what will happen to the Covid payment and TWSS in the months ahead?

It is highly likely that there will be an increase in the levels of personal insolvency and home repossessions over the coming months. This is on top of the number of unresolved cases from the previous recession. A number of legislative and regulatory updates can and should be made to facilitate the efficient and fair processing of any such insolvency or home repossession. In anticipation of an increased number of cases, the funding allocated to agencies and NGOs dealing with and advocating on behalf of those involved in personal insolvencies and home repossessions should be reviewed.

Does the Minister have plans to review funding and supports allocated to the Legal Aid Board, the Money Advice and Budgeting Service and Free Legal Advice Centres, FLAC?

See this speech in context