Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Question 3: To ask the Minister for Enterprise, Trade and Employment if his attention has been drawn to the comments by a person (details supplied) expressing concerns that the increasing burden of regulation and compliance is threatening to suppress the entrepreneurial drive and flair that have facilitated economic growth and development; the measures he is taking to address concerns regarding regulatory burden; and if he will make a statement on the matter. [19314/07]

Micheál Martin (Cork South Central, Fianna Fail)
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National and international surveys indicate that the administrative burden or red tape factor of regulation on business is not particularly onerous in Ireland. In a recent ESRI survey, over half of businesses stated that the level of regulation in their sector was about right. However, it is important we ensure that regulation remains balanced between cost and benefit and that we constantly strive to keep the administrative cost to the minimum. I intend to give strong commitment and leadership to reduction of regulation over the coming years.

On 8 March the Department of the Taoiseach published the results of an ESRI survey of business attitudes to regulation. At the same time the Taoiseach stated that the Government had agreed to put in place a new mechanism to tackle administrative burdens arising from national legislation in a targeted way. The Government also agreed that I should lead a Government-wide effort to drive this agenda. I have asked the Secretary General of my Department to chair a high level group representative of Departments, agencies, the business sector and the Irish Congress of Trade Unions to examine ways of reducing the administrative burden of regulations on the business sector. The intention is to bring the regulating Departments and agencies into direct contact with business representatives and the focus initially will be on areas that seem to be causing the biggest burden of form-filling, returns, reports, statistics etc.

The areas that this work will initially focus on have been decided based on the work of the business regulation forum, whose report I launched on 25 April, and the ESRI survey of business attitudes to regulation. These areas are taxation, health and safety, environmental regulation, statistical reporting and employment and company law. We will concentrate on these areas rather than taking a broad-brush approach. To further this work, my Department recently conducted two workshops with business people to discuss specific concerns. The outcome of these workshops will be fed directly into the work of the high level group.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The comments the Minister is responding to are those of Mr. Seán Fitzpatrick, chairman of Anglo Irish Bank. He made the comments three weeks ago and was scathing of the difficulties emerging for small and medium sized businesses in terms of entrepreneurial flair and the business regulatory burden in Ireland. I acknowledge that the Tánaiste and Minister for Finance, Deputy Cowen, made a start in dealing with these issues, such as VAT exemption. The Minister was against VAT exemption levels being raised but changed his mind.

Micheál Martin (Cork South Central, Fianna Fail)
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Deputy Hogan is wrong. I was never against it.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The Minister of State, Deputy Michael Ahern, can fill in the Minister. The Government was against it but it changed its mind. The Minister changed his mind a good deal with regard to regulatory burden.

Micheál Martin (Cork South Central, Fianna Fail)
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The election is over.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Some 80 forms must be filled annually by medium sized companies. This is crazy and I ask that the Minister provide a timescale for when reform will be implemented.

Micheál Martin (Cork South Central, Fianna Fail)
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I worked quickly on this. The audit exemption thresholds that the Minister of State, Deputy Michael Ahern, and I worked on was raised from €1.5 million to €7.3 million and from €1.9 million to €3.65 million in terms of turnover and balance sheet respectively.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The Government voted it down originally.

Micheál Martin (Cork South Central, Fianna Fail)
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Many companies have benefited from it and have articulated gratitude. The small business forum, which I established, came up with practical recommendations for small businesses. As a result of that and in consort with my colleague, the Minister for Finance, as the Deputy has graciously acknowledged, significant measures were introduced in budget 2007 which reduced the administrative burden on small business in regard to payment of corporation tax, preliminary tax, and the requirement for a tax clearance certificate by increasing current thresholds which trigger such requirements, and also increasing the VAT on cash accounting and VAT registration turnover thresholds from 1 March 2007 to simplify administration and reduce working capital requirements on small business.

I accept we have to be clear and committed in terms of reducing the regulatory burden. I invite Deputy Hogan to approach me at any stage in the coming weeks or months if he has any specific areas he feels could lend themselves to change. I will have an open door and will give credit where it is due.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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That will be a change for the Minister.

Micheál Martin (Cork South Central, Fianna Fail)
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I will act. What we have done with the new high level group is to bring together the regulatory body in the Taoiseach's Department with the business regulation forum. We have endeavoured to do something like a clearing house similar to the financial services clearing house to buy in from the different sectors. We will take a sectoral approach and get early results to reduce the burden. The Companies Consolidation and Reform Bill will be a significant measure in terms of the simplification of company law and making it more accessible and facilitative for emerging new and small companies.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I omitted to welcome the new Ministers of State, Deputies Kelleher and McGuinness, to the Department of Enterprise, Trade and Employment. They join with the other members of the Cork team in the Department. I wish them well in their term of office. From what I hear, there is plenty of work to be done in terms of the Companies Consolidation and Reform Bill.

Micheál Martin (Cork South Central, Fianna Fail)
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Once we get over September.

Michael Ahern (Cork East, Fianna Fail)
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The first Sunday specifically.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The reason the chairman of Anglo Irish Bank Corporation plc decided to make those comments was that in 2001 the Taoiseach was briefed on better regulation for businesses. Since then we have not seen much action. The Minister has set up a high level group, which I acknowledged. The Minister for Finance did a few things in the budget in line with suggestions we have been making on this side of the House for a while. I acknowledge the good start that has been made but some issues, which relate to competitiveness and regulation, go back as far as 2001. Six or seven years is long enough to be waiting for change on common sense issues. Will the Minister revisit the better regulation document and indicate whether it is now relevant to dealing with regulation issues relating to small business or whether he has a new agenda?

Micheál Martin (Cork South Central, Fianna Fail)
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A substantial part of my agenda is contained in the business regulation forum's report, which I launched on 25 April. We will also draw from the work of the ESRI survey of business attitudes to regulation. They are important inputs into the work of the high level group.

It is also worth putting on record that the World Bank's report, Doing Business in 2006, ranked Ireland tenth out of 175 countries in terms of the ease of starting and running a business. The World Economic Forum's Global Competiveness Report 06-07, showed that Ireland compared favourably on a number of regulatory indicators. The International Institute for Management Development, IIMD, competitiveness scoreboard for 2006 showed that Ireland compared favourably on a number of regulatory indicators including ease of doing business. I wish to put that on record. There is a tendency to overdo it in this country in terms of negative commentary about everything, including competitiveness etc. We need a balanced debate on these issues.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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So it is not an issue.

Micheál Martin (Cork South Central, Fianna Fail)
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I am clear that it is a significant core priority of mine in the future, as Minister for Enterprise, Trade and Employment, because I want to keep Ireland competitive. I want to keep us where we are currently vis-À-vis the European Union 25 in terms of entrepreneurial activity and the number of start-ups in this country. I stand to be corrected, but I believe we came second to Poland last year. There has been a change in mindset in entrepreneurialism in Ireland for some time and we want to keep it that way.

There is a significant train coming down the track in terms of EU directives from Brussels and we need to be clever in our transposition of those directives.