Aodhán Ó Ríordáin (Dublin Bay North, Labour) | Oireachtas source

I congratulate the Tánaiste on his appointment and look forward to working with him over the coming period. His remarks are welcome for the emphasis he has placed on young people. I am glad the Government is aware of this. We have only just in recent memory come out of the last economic collapse, which was quite painful and bruising. Many small business owners will have just begun to look forward to the next period of their lives and their businesses' lives. They may have extended themselves on the feeling that things were improving economically and now they have been hit with this Covid disaster. It is much easier to retain a job than to create a new one.

While we welcome this Bill and note that it is enabling legislation, there are elements to the microfinancing project that could be enhanced and improved. Comparisons have been made with the bounce back microfinance operation in the UK. The bounce back scheme makes loans available at 2.5% with no repayment for a year. The Government pays the first year's interest. The loans are 100% State guaranteed. Loans of up to 25% of turnover are available with a term limit of six years and a maximum of £50,000. In the Republic, Microfinance Ireland offers a six-month interest fee repayment holiday, a term limit of three years and a maximum of €50,000. The Labour Party's suggestion is that €50,000 is inadequate and could be increased to €100,000. The interest rate of 4% is considered to be too expensive. In previous times, when the State was getting financing at somewhere similar to that rate, it could be in some way justified, but finance is available to the State now at a much-reduced rate and it would follow that a much-reduced interest rate should be applicable here. The term limit of three years is quite short compared with the UK bounce back scheme term of six years. We would like to give businesses a sense that they have five or seven years or maybe longer ahead of them to recoup and start afresh.

Before Covid, we had very encouraging employment statistics and the economy appeared to be going in the right direction. However, the statistics and economic analysis have clouded the reality of being a low-pay economy. About 23% of Irish workers pre-Covid were in low pay according to OECD statistics. That is a very large figure, as the Tánaiste can appreciate. As has been said, about 40% of young people were in insecure work. Those sectors of low-paid and insecure work were the ones most affected by Covid. We in the Labour Party feel that we cannot return to that type of economic model which is so dependent on low pay and insecure work. We want to work with the Government to provide a better and more secure model for workers.

It is much appreciated that the Tánaiste outlined the youth unemployment element in his address. We feel that this will at least be a significant part of the July stimulus. James Doorley from the National Youth Council of Ireland gave a statistic over the weekend that 45% of young people under 30 years are currently in unemployment. That is a staggering and incredibly worrying figure. We have all seen the damage the last economic collapse caused. We have potential now with support from lenders not to make the same entrenched and damaging mistakes that many of us made ten years ago and in the years after that. We appreciate and support the Bill, but if we look at what is happening in other European states and the UK, there are other models that are probably more generous. We could make this much more generous.

I have spoken about the interest rate, term limits and amounts involved.

Unemployment is not just an economic cost or a statistic that we try to bring down, as the Tánaiste knows, it is a real human cost to the person's sense of worth to his or her family and to society. We cannot reduce it to economic terminology.

We will support the Bill but we feel it must be more flexible and give voice to the fact that we are in a very precarious economic situation, and that is without mentioning Brexit. The debate until now has focused on Covid, and justifiably so. Covid has given rise to a health crisis that has caused economic collapse. While, Brexit has an influence on identity, security and other matters, including the Good Friday Agreement, it is also an economic threat. With both of those things, we also have an unemployment crisis. That is why we feel that Microfinance Ireland requires a greater capacity to lend larger amounts at lower rates over a longer period to those businesses which probably only turned the corner a few years ago in order that they can stand on their own two feet. I emphasise that we cannot return to the model of low pay and the grinding, humiliating existence that too many of our workers endure. That 23% of workers are on low pay is a damning statistic. It is not something over which we can stand or to which we would want to return. If, as my colleague, Deputy O'Reilly said, so many people are in insecure work, that must also be challenged. There are many mechanisms we can use to challenge that but it is an economic model to which we do not want to return. I want something that is better not only for the economy but also for society in general. The Labour Party will support the Bill and I look forward to the Tánaiste's response to the points which have been raised.

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