John McGuinness (Carlow-Kilkenny, Fianna Fail) | Oireachtas source

I had hoped to contribute to the debate on Second Stage but, unfortunately, the arrangements were such that I was not able to get across from Leinster House to here.

We have to begin to understand why we are at this juncture and why this funding is necessary. It is necessary because, for nine years, the Fine Gael Government failed to understand the need for direct funding for businesses to support them after the financial crash. It ignored the fact that the main pillar banks completely blocked any attempt by microbusinesses to engage with them, obtain funding and restructure their loans in an effective and sustainable way. Essentially, the Fine Gael Government failed the indigenous business sector and, as a result, we must find some mechanism, this legislation being one, to put money into the sector to allow the businesses to obtain funds at a reasonable rate. I suggest a reasonable rate of 0%.

At the hearings of the Special Committee on Covid-19 Response, business representatives told us they had not been consulted in any meaningful way on the method to put the money required into the sector. For this reason, there is a misunderstanding in the Government regarding the extent of the problem we are dealing with. The extent of the problem can be summed up as follows. The banks literally screwed the SME sector and made it impossible for SMEs to conduct their business properly and efficiently over the past nine years. There was little or no Government intervention during that period. The SMEs were trying to restructure themselves financially after the crash and are still trying to do so. They were only coming to the point of managing their debt when they were struck by the Covid-19 pandemic and the closure of their businesses.

Therefore, we should not see funding at a rate of 4% as doing the businesses a favour. We should see this as the State's responsibility to rescue the sector, which is made up of small family businesses throughout the country. The businesses are keeping their communities alive. They have not got the surplus money to carry a burden of debt, even at a rate of 4%. I should not say all of them are in this category as some of them do have a surplus, but the majority are on their knees seeking direct support from the Government in the form of a grant or a rate of 0%. The criteria have to allow the small businesses to restructure their existing debt. There should be further funding, provided in a sustainable way, to guarantee the jobs the businesses fought so hard to create over the lifetime of a family or over generations. We cannot ignore the fact that many of these businesses will simply not be able to access the fund. Therefore, we must remove the red tape and bureaucracy and make it simple for them to get the funding to prove they can sustain the debt. The interest rate is a killer for small businesses and needs to be explored.

I draw the attention of the Minister of State to the fact that during the hearings of the Covid-19 committee, many of the sectors, represented by their national bodies, told us they were not asked for their views and had no input. They particularly wanted to have an input into the July stimulus. They have not got that opportunity. The representatives told the committee that specific interventions are needed on a sectoral basis. Without going into the detail of what each sector might want, I contend that the main issue for each sector was that it could not access funds. Even today, the banks are causing the same difficulties that they caused during and after the financial crash. Funds like the one in question, which are being made available by the Government, are essential to the sector. The rate is critical in terms of structuring and the criteria used for applications.

I will support everything to do with the SME sector but I have to take issue with the fact that we are not engaged fully enough with it to learn from the Government mistakes and for businesses to learn from their mistakes so we will not make the same mistakes over and over again. In the nine-year period, we should have learned a huge amount. I ask the Minister of State to review the criteria to enable the SME sector, especially the very small businesses, to gain access to the money. He should review the interest rates the Government is proposing to charge and reflect on the fact that while the banks may say, through their advertising, that they are open for business and supporting the SME sector, they are not. The evidence is the closure of many of the shops in the villages and towns throughout our constituencies. If the new Government is to represent change, the change would be to listen, learn and put the appropriate supports in place that will support each and every sector.

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