Martin Kenny (Sligo-Leitrim, Sinn Fein) | Oireachtas source

It is obvious to everyone that we have a situation across the country where many small businesses are under massive pressure as a result of Covid-19 and the onslaught it has brought on their cashflow. They are trying to keep on employees and to keep their businesses afloat under the most difficult of circumstances.

There is a lesson in all of this for the economic model we have used in Ireland for so long. When there is a crisis, whether it is Covid-19, an economic crash or Brexit, who has to come to the rescue? It is not the markets, yet at all other times we are told the markets are there to solve all of the problems. They do not solve problems when there is a crisis. Instead, it is up to the taxpayer and Government to come in and shore up and support businesses. That is appropriate and proper, and it is exactly what we need to do right now.

It is ironic, given the circumstances in which we find ourselves, that the way the Government has chosen to address the crisis is through a credit guarantee scheme, which of course is necessary. However, the model it has again chosen is to provide help through the pillar banks. The difficulty many small businesses have is that they are at the mercy of credit committees in these banks. That has been always the case.

Business owners who are looking for money are usually already under stress and in debt from trying to establish their businesses and keep them going. When they go to banks to look for additional cash to keep cashflow going, to stay afloat and to get over a hill to the top so they can continue to flourish, they find they are meeting the same problem, namely, that the banks are the ones that are in control. That is one of the major flaws in the proposal. We continue to use pillar banks as if they were going to solve our problems. They certainly will not, and in many cases we find that many of our small businesses are at their mercy.

A lot of small businesses in Ireland are struggling even in ordinary times. I have spoken to the owners of small businesses across my constituency who employ a small number of people and continue to work very hard and keep going even in these difficult circumstances. They pay their way and are able to continue in business. Crises like Covid-19 put them in a situation whereby they are now considering whether they should remain open or close. Many are choosing to close.

That is one of the ironies of all of this, and it goes back to what I said at the beginning of my statement, namely, that the economic model we use in this country puts just enough support under people to get them started and then abandons them to the mercies of the markets. That simply does not work in the long-term and we need to review that model as we move into the future so that if we face another crisis in one year or ten years' time we are not in a situation whereby the taxpayer has to come in and rescue businesses. There must be a better and more sustainable model that works for everyone.

Another aspect of this involves the European Union and the way it treats countries that choose to invest in their local and indigenous economies. The Stability and Growth Pact states that Governments cannot invest in their economies, which is a significant problem. Of course, many of the other countries in the EU, even Germany which is one of the most strident in defending this policy, break the rules and are most adventurous in investing in their economies and ensuring their indigenous economies are flourishing.

At the same time, such countries punish other countries for trying to do the same thing. The Government needs to become more adventurous and strident in ensuring that we develop our indigenous industries and economies, particularly in the regions. I come for the north-west region and that part of the world has the greatest opportunity and potential in the country. There is a highly educated workforce but, unfortunately, many of those from the area who get degrees and do well in life cannot find work in their local area and must travel to the east coast or leave the country altogether. That is a part of the lesson that we need to learn. We need investment in the economy that is deep and spread across the island so that we can ensure, come what may, we will have the strength to work our way through it.

This credit guarantee scheme is necessary but the manner in which it is being rolled out is totally mistaken. We should not be doing it through the banks. We need to pump money in at the bottom of the economy so that people will spend it because if they do, they will keep the economy going.

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