Verona Murphy (Wexford, Independent) | Oireachtas source

I congratulate the Tánaiste. It is all in a day's work to go from being Taoiseach to Tánaiste so we will get on with the business of the day. The pandemic has seen many SMEs close their doors for four months now. We hear daily about businesses across the country which have existed for decades, including family businesses, that are not reopening. Many of these businesses have struggled on since the last recession and closure as a result of the pandemic has simply been the final nail in the coffin for them. They have continued to incur fixed costs and overheads such as insurance, electricity, professional fees and many other invisible costs that most SMEs do not see until they do their end of year accounts. In regions and constituencies such as Wexford, SMEs are the main employers and so it is imperative that they have enough cash flow to reopen.

Many SMEs will not be able to meet the cash flow criteria set down by commercial banks to qualify for cash flow facilities. In this regard, the Government must step in and provide a sufficient restart grant radical and far-reaching enough, as the Tánaiste put it earlier, to re-grease the wheels for SMEs. In recent weeks insolvency experts have stated that the restart grant needs to be ten times what is proposed. The restart grant must be reassessed and must be based on the number of people employed, rather than the rates paid last year. Rates are an overhead but wages are a variable cost. We need to get people back to work. If businesses are expected to open their doors, a fixed-rate expense grant based on last year's rates will be of little use to many of them. While we acknowledge the helpfulness of the wage subsidy scheme, many businesses such as pubs, restaurants, garages, hotels and crèches simply do not have the cash flow to reopen while paying out the contribution to wages. That is clear today in the childcare sector, where many crèches have not reopened. Grants should be provided to SMEs based on the number of people they employ. It is better that people are in productive employment rather than in receipt of social welfare because the State will pay either way. In simple terms, businesses need cash to open but a mediocre restart grant does not cut the mustard. In most cases, thousands of euro will have been spent providing equipment to comply with Government requirements such as social distancing, providing hand sanitiser, Perspex screens, signage, PPE gear and so on. There is no one-size-fits-all business for the variants of the SME sector.

The eligibility requirements of the restart grant are capped at a turnover of €5 million. If one is in the car trade or commercial truck sales, that cap is exceeded readily but turnover is not the same as profit and eligibility for supports must be reviewed. If someone is in the retail trade such as ladies' fashion and has a clothes shop which closed in March, that person will have lost two seasons of sales in the last 16 weeks but is still carrying the stock. To stay open, he or she must pay for the stock purchased for the autumn and possibly even the winter season. Cash flow is king, which is a very frightening prospect for many businesses. Their decision to reopen is being based on the current supports available and that is not encouraging. Many such retailers are out of cash flow. Cash flow can only be generated through sales and many traders that have been established for years need much greater supports than are available through the restart grant. Many have credit terms of three months. They also have legal obligations, not just to creditors but to staff as well. To such a business, a restart grant based on rate payments is insignificant against the cost of carrying seasonal stock. In the fashion retail sector, seasons are to fashion what food is to Tesco and each season has a sell-by date. Hotels and restaurants do not need large numbers of staff returning if they do not have the footfall and the reopening of their premises is eating up their cash flow far in excess of the grant available. Businesses need supports that will assist them in weathering the storm until a calm arrives.

The talk of a possible resurgence of Covid-19 to crisis level, resulting in another lockdown, does not instil confidence and if people are not returning to work, there will be no consumer confidence to spend. The Government must ensure we do not aid a self-fulfilled prophecy of a recession. Businesses do not need large numbers of people to work if they do not have customers to serve. The associated cost for them to open will be a fraction of what their wage bill will be and the restart grant needs to be at least ten times what it is if we are to ensure people are to stay in the habit of work. We must not create a welfare state. We must assist businesses and ensure the supports are sufficient for their needs. The Government needs to make provision for that now. We do not need to wait around. Like all successful strategies, planning is key and we need to plan now for a revised restart grant that will be delivered through the July stimulus. The temporary wage subsidy scheme must continue, possibly until this time next year, if businesses continue to struggle. Certainty must be given to get momentum going and I implore the Tánaiste to assist businesses, not social welfare queues.

My colleague, Deputy Denis Naughten, who is unavoidably detained today, requested that I ask the Tánaiste about the steps that are now being taken to secure jobs at Aptar in Ballinasloe. I heard the Tánaiste speak about this earlier, but Deputy Naughten is requesting that the Tánaiste consider bringing all State agencies and the two local authorities in Galway and Roscommon together to implement a co-ordinated strategy for the town and the surrounding communities. I understand that Deputy Naughten has written to the Tánaiste directly and he might furnish him with a response.

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