Matt Shanahan (Waterford, Independent) | Oireachtas source

The old adage "health is wealth" is now a social and economic truth and one that we must continue to grapple with.

The necessary shutdown of our economy has taken a significant toll on business activity and employment. The life-support employment packages announced by the Government in response to Covid-19 have cushioned circumstances for many employees and employers but these supports will have to have an expiry date, as we know.

The overarching requirements in managing this disease outbreak in Ireland are getting disease transmission under control and adjusting future activity to the new norms of adherence to hand hygiene and social distancing infection controls. With the easing of restrictions, some positive developments have been seen, with enterprises beginning to open since May and a small number reporting an increase in turnover. For many businesses, specifically those in the areas of tourism, hospitality and the arts, a different reality awaits, however. Along with the new and required capacity constraints in the business offering, demand for the products of many businesses, particularly in tourism and hospitality, has fallen off a cliff edge. Many businesses in this sector depend on the flow of international travellers. Without their return, some businesses may never recover. In addition, the regions will be more adversely affected by the economic shock of Covid in light of the interdependency of many businesses within the regional economic network and the lack of a significant internal economy.

The Bill, the purpose of which is to expand the availability and supply of microfinance loans to the SME sector in particular, is welcome. In essence, the July stimulus package will signal whether the Government has fully understood the challenges faced by over 1 million workers in the State and the companies that employ them.

As a member of the Special Committee on Covid-19 Response, I have sat through several sessions dealing with the Government's response to the challenges facing the SME sector. The overwhelming takeaway for me was the lack of access for SME group representatives to senior Department of Finance officials over a sustained period. The message to the representatives seems to be that big government in Ireland has no interest in small business. This was fully captured in the comments of the senior departmental officials to an SME representative head, who at their meeting described those in the SME sector as only being interested in fiddling their taxes. Likewise, stakeholders representing the tourism and hospitality industry told us at a meeting of the Covid committee that they received ready access to the Department of Business, Enterprise and Innovation but none to the Department of Finance. Is it the case that senior highly-paid civil servants, some earning many multiples of an average SME employee wage, are unaware of who actually creates the profits and taxes that fund their gold-plated remuneration packages?

I question why SME groupings that represent the vast majority of small business owners have no direct seat at the Government's labour employer economic forum, despite resulting employee agreements being legislated for in respect of their businesses. Regional regeneration aspirations flagged in the programme for Government cannot come to fruition without the direct and sustained support of the SME sector. The sector, employing over 1 million people, will ultimately carry the heaviest load for any shortfalls we see in economic recovery after Covid-19. A vaccine may come to our economic rescue but, in the interim, we must deal with the present. The aspirations to apply liquidity to the business sector with devices such as expanding microfinance enterprise follow conventional economic planning but the range and rate of stimuli required have not yet been realised, according to most commentators. In addition, negative cost factors that were well flagged before Covid-19 still feature and still need to be addressed. I hope to see, as part of the July stimulus initiative, redress in these areas. Re-employment is the main measure of health and equity in the economy. Stimulus finance must find its way into and through the business sector as quickly as possible.

The Tánaiste asked for some initiatives. I offer to him the following proposals for his consideration. Based on the example of France, immediate Government-backed loan funding could be made available to SMEs based on previous tax paid or previous payroll expenditure. At the year's end, the receiving company would audit its losses due to Covid-19, and such losses would be offset against the loan finance provided. For companies still operating at a deficit, continuing support should be provided to allow innovative business initiatives to be explored. A commitment to employment numbers would be required in that instance. Forbearance and restructuring, such as an administration lite process, should be allowed so viable restructured companies can continue to trade without having the liability of seeking High Court protections and the unwelcome attention of fire-sale liquidators.

Insurance remains a bugbear for every business in this country. Surely it is now possible to produce a book of quantum that describes a reliable claims environment which can be established and which can offer transparency to both the insurer and insured. I hope this will be an immediate priority of the Government.

The treatment of people by landlords and utility companies must be reviewed. Some legal mechanism must be provided to ensure fair dealing and a process for managed legal redress or arbitration for those who have suffered in the Covid period.

For businesses operating specifically in the tourism, hospitality and arts sectors, VAT modifications must be considered. A 5% VAT rate until 2021, which would revert to 9% thereafter, should be considered for the sectors. In addition, the commercial rates waiver must be extended until the end of 2021, and then the waivers must be reintroduced on a tapering scale.

Commentary on the July stimulus is increasing but if we surround the July stimulus with red tape, the money will not find its way into local economies to mitigate the worst economic damage of Covid-19.

We stand at a crossroads with the Government now, but we have the benefit of hindsight. Another bailout is required but this time the decision is to bail out the Irish people and the economy. The issue is not whether we should do it but, rather, how we do it. The Bill comprises a welcome step along the road but far greater strides will be required to complete the journey before us. I hope, for the sake of our country, that ongoing financial planning is rooted in equitable treatment for every business sector and region. A large number of our previously working population are waiting to see whether their sacrifices and political choices will be vindicated. The answers to their questions lie primarily in the fiscal measures that the Government is considering.

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