Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

Since the public health emergency began, and in order to contain the spread of the virus, sectors of our economy have been entirely closed while others have suffered severely reduced activity as a result of restrictions which were necessary at that time. As a result, thousands of workers have lost jobs and their incomes. With trading brought to a halt, many businesses are currently fighting for their very survival. Chruthaigh an pandemic seo agus na srianta sláinte a tháinig léi deacrachtaí móra dár gcomhlachtaí, idir beag agus mór, go háirithe comhlachtaí beaga agus na hoibrithe atá fostaithe acu. The statistics, which I know the Tánaiste values, reveal the stark reality facing workers and businesses across the State and also the failure of his Government and Department to act fast and do whatever it takes to support them. The numbers speak for themselves. Figures published by the European Commission on 8 September showed Ireland suffering the second highest level of job losses in the second quarter of this year. That is more than twice the European average. Figures published the following day by the Central Statistics Office, CSO, found the rate of unemployment for August stood at 15.4%. That is higher than the unemployment rate in the United States of America under President Trump. These figures cannot be disputed.

The real reasons for the scale of job losses which are out of kilter with our European competitors are quite clear. I will briefly mention two of them before discussing the third in greater detail. First, we know that the greatest level of job losses has been felt among low-paid workers in the sectors most affected by the public health measures, including hospitality and tourism. This has been repeatedly confirmed by monthly Exchequer figures, the most recent of which have shown that despite unemployment in the month of July being 17%, income tax receipts were only down 0.7% on the previous year. These sectors make up a large proportion of our economy and jobs market, more so than in other European countries, resulting in heavier losses.

Second, the level of job losses is directly related to the severity of the public health measures that needed to be implemented to contain the spread of the virus. One of the reasons these were necessary was the simple fact that we have among the lowest hospital capacity and the highest levels of hospital occupancy in the OECD, after a decade of Fine Gael mismanagement of our health services. That is the reality and we need to be clear. A decade of underinvestment and mismanagement has left the State more vulnerable to the virus. That is one of the reasons such stringent public health measures have been required, which in turn have damaged the economy and cost jobs.

Third, the Government and the Tánaiste's Department have been slow to support businesses and jobs. Bhí an Rialtas ró-mhall ag cuidiú le comhlachtaí agus ní raibh na tacaíochtaí a cuireadh ar fáil do chomhlachtaí láidir go leor. Chuir sé seo leis an méid ard daoine a chaill a bpoist le cúpla mí anuas. Despite a sharp reduction in income, non-payroll costs for SMEs have remained the same. With the accumulation of rents, utilities, debt repayments and insurance to pay, these businesses are building up unsustainable debts. Research published by the ESRI just yesterday estimated that SMEs suffered a revenue shortfall of between €6 billion and €10 billion from March to June this year. By the end of this year, the ESRI estimates that these firms will suffer a revenue shortfall of between €8 billion and €15 billion. The question is how has the Tánaiste's Government performed in supporting the SME sector which, crucially, employs over 1 million workers. In this regard, what matters is not announcements or press releases but the release of funding. SMEs will not survive on press releases but on real financial support.

The credit guarantee is a case in point. On 7 September, the Government finally opened its €2 billion credit guarantee scheme. This is better late than never, no doubt, but it comes five months after similar schemes were opened in other jurisdictions such as Germany, Britain and France. As of Friday, not a cent of this scheme has been lent out by participating banks. There were changes made to the scheme which I welcomed, for example the removal of the portfolio gap which will increase the level of guarantee and facilitate lending to SMEs. I proposed this very change to the Minister back in May. It was rejected then but I welcome the fact that Sinn Féin policy has now been adopted by the Government on this issue. It comes five months later than similar schemes in other advanced economies and no doubt this delay has cost jobs and is threatening the viability of businesses. In terms of grant support, again, the Government has moved too slow. By last Friday, €299 million had been released to businesses across the two restart grant schemes with only 50% of the overall funding available dispersed and 30% of applications at this late stage in September still awaiting approval. By the end of March, five months ago, grants of £10,000 or £25,000 depending on the size of the company, with a total value of £300 million, had been provided to SMEs in the North, providing rapid liquidity to businesses that needed it and jobs that depended on it. In Germany it took them 24 hours to get the money into the accounts of businesses in payments of €25,000, yet this Government has delayed and delayed. The reality is that this is costing jobs.

I welcome other measures announced in the July stimulus such as the commercial rates waiver and a number of tax measures which will offer real relief to businesses, such as the warehousing of tax liabilities and income tax loss relief for the self-employed. However, the Government's stay and spend initiative is badly designed and unfairly distributed. It took a good idea that we presented to it and butchered it. As the tax strategy papers published on Monday show, 30% of earners will not be eligible for this scheme. Nearly 1 million taxpayer units are not eligible for it. Furthermore, with any claims made in 2021 not being refunded by Revenue until 2022 it is really questionable whether this initiative will drive the level of spending required in this sector. It would have been of more benefit to small businesses in the hospitality sector if the Government had adopted our position of reducing VAT from 13.5% to 9%, providing them with real flexibility to pass on this reduction to their customers or to improve their balance sheets. I urge the Tánaiste and the Government to look at this issue again and consider it in the budget.

On the employment wage subsidy scheme, the temporary wage subsidy scheme was a crucial policy measure that Sinn Féin supported having submitted our own proposals to the Minister back on 23 March, before any announcement was made. We worked constructively to address the deficiencies in that scheme, successfully arguing for an increase in the subsidy for the lower paid and also the inclusion of women returning from maternity leave. By the end of August, the scheme provided €2.8 billion, supporting 663 employers and over 65,000 employers. As of 1 September, this scheme is now replaced with a new scheme which is going to run until the end of March. I have serious concerns about the design of the employment wage subsidy scheme. I have raised them in the Dáil and with the Minister for Finance. It provides no support whatsoever for an employee who earns less than €151.50 per week.

That locks out 153,000 workers across the economy. Given that it is the low-paid workers who have been most affected and most likely to lose their jobs, it is a policy choice by Fine Gael that I see no sense in. I cannot understand it. The new scheme also cuts the level of wage support for workers by as much as 50%. There are things that can be done to improve the flaws in this, and we have given solutions.

The Tánaiste and his Government need to do better in terms of protecting jobs. We can look to the pandemic and we know it has caused huge disruption, some of which is outside of our control, but in no way should the State have twice the level of unemployment as that across the EU. It is simply unacceptable. The reasons for this must be looked at in the Tánaiste's own Department, and in the Government's slow, lethargic and not big enough response to supporting workers and small and medium enterprises.

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