Dáil debates

Thursday, 7 February 2008

4:00 pm

Photo of Jimmy DeenihanJimmy Deenihan (Kerry North, Fine Gael)
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Question 8: To ask the Minister for Enterprise, Trade and Employment if he has set a national target for the reduction of regulation in business as was promised to Dáil Éireann; and if he will make a statement on the matter. [4158/08]

Photo of Michael AhernMichael Ahern (Minister of State, Department of Enterprise, Trade and Employment; Minister of State, Department of Education and Science; Cork East, Fianna Fail)
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In March 2007, the European Council agreed:

administrative burdens arising from EU legislation should be reduced by 25% by 2012. Taking into account the different starting points and traditions, the European Council invites member states to set their own national targets of comparable ambition within their spheres of competence by 2008.

Prior to the spring European Council, the Government agreed that the Minister for Enterprise, Trade and Employment should lead the cross-departmental and agency drive and put in place a mechanism under the Secretary General of his Department to drive this agenda at national level.

As part of this effort, the Minister established the high level group on business regulation under the chairmanship of the Secretary General of the Department. That group comprises representatives of Departments and agencies, the business sector and a representative of ICTU. In its work to date, the group has been examining concrete measures to reduce the administrative burdens in five policy areas — taxation; statistics; environment; health and safety; and employment and company law — which are considered to impose the highest burdens on business.

I expect the high level group will submit its initial report by July 2008. Before setting a definitive national target in response to the European Council invitation, the Minister is consulting Government colleagues on what processes might be needed to assess the extent of administrative burdens on Irish business and on the measures that have been undertaken or are planned to reduce that burden.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I thank the Minister of State for his answer but I have heard it many times. I raised this question on 28 November 2007, the last time the Minister took Question Time. I have the good fortune to have the Official Report before me and I can see I specifically asked the Minister on several occasions when we would be given a target.

A number of European countries have had targets for some time, including Austria, the Netherlands, Denmark and even Italy. I asked the Minister about this several times and he told me it would happen within the next two months, which left a deadline of 28 January. Can I confirm that the Minister has reneged on his commitment to set a target as it has not yet been set?

Photo of Michael AhernMichael Ahern (Minister of State, Department of Enterprise, Trade and Employment; Minister of State, Department of Education and Science; Cork East, Fianna Fail)
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I was involved in the reduction of administrative burden in the last Government when I was Minister of State responsible for company law. Deputies have mentioned regulatory burden and we brought in audit exemption, which has been of great benefit to companies and accountants.

There are other areas in which changes have been made, leading to much angst being eliminated. These include redundancy payments as the process by which companies reclaim payments made to redundant workers have been streamlined. Claims can now be made on-line and there are savings of approximately €1.2 million for firms through this change.

There is also the area of tax clearance certificates. Instead of having to submit an original certificate in hard copy, the certificate can now be checked on-line by the Government agency awarding the contract. That is another simple change which has been beneficial to companies.

The Minister for the Environment, Heritage and Local Government has introduced new regulations whereby waste collection firms can apply to one local authority for a permit which will apply in other local authority areas. These are areas in which progress has been made.

An ESRI survey was carried out in 2006 and 2007 of 800 firms on their attitudes to regulation and 55% of those surveyed believed the overall amount of regulation in their sector was about right.

With regard to issues affecting international competitiveness, businesses ranked regulatory burdens at 14%, labour costs at 30% and infrastructural deficits at 13%. We are ranked in the World Bank's Doing Business 2008 report at number eight from 178 in terms of ease of starting and running a business. Aside from that, I hope the Minister will provide the target in the not too distant future.

Photo of Willie PenroseWillie Penrose (Longford-Westmeath, Labour)
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I have a particular interest in this area as well. Our committee set up a red tape index to measure bureaucracy in business. Is the Minister of State aware of the legislation and regulations small business owners are forced to read, understand and implement? There are almost 1,000 different major legislative items that affect the business. These include taxation, industrial relations and health and safety. It is an incredible amount. I realise some are important so I will not deviate from the topic. We should see if we can all achieve something.

Will the Minister of State request each Department to carry out a full audit of legislation under its remit on the cost burden of business against the benefits of legislation? From such an assessment a decision can be made as to how regulations can be streamlined. ISME has advocated the standard cost model, which is used in many jurisdictions, as the preferred option for this process. Would it not also be essential that a central co-ordinating body with relevant powers be given the necessary role to carry out this process, under a single ministry within a given time frame, and which would specify targets on administrative burden reduction within each Department? Will the Minister of State consider the introduction of regulation impact assessments which should be put included in all legislation and regulations imposed on small business? This would include formal assessments to be carried out, based on merited exemptions for small businesses pertaining to this legislation. A small business, such as a shop with ten employees, has to complete 50 forms, including some for the Central Statistics Office, and there are criminal sanctions for those who do not comply. It is time to get our house in order. We must try to ensure that small businesses, which are the bedrock of this economy, do not have to carry the burden of all that red tape and bureaucracy.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I will not go through the interesting list of the number of forms their members must complete that the Irish Small and Medium Enterprises Association, ISME, gave the committee on enterprise, trade and employment yesterday but I am delighted that I am in a public sector PAYE job because I would hate to be in business. There is obviously nothing happening. Nobody is being upskilled, a commitment to set a target for regulation is broken and the Minister is not here to explain why. I would be terrified to be running a business, with the level of inertia, disinterest and the lack of concern from the Minister of State.

Photo of Michael AhernMichael Ahern (Minister of State, Department of Enterprise, Trade and Employment; Minister of State, Department of Education and Science; Cork East, Fianna Fail)
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I agree with Deputy Penrose. I have worked on the other side of the fence.

Photo of Willie PenroseWillie Penrose (Longford-Westmeath, Labour)
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I know the Minister of State has done so.

Photo of Michael AhernMichael Ahern (Minister of State, Department of Enterprise, Trade and Employment; Minister of State, Department of Education and Science; Cork East, Fianna Fail)
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I have had to fill in endless forms and that is why, when I was involved in the company law area, I managed to get rid of some of them. It is Government policy to reduce the regulation by 25% and we have set up a high level group. I note the Deputy's comments and will convey them to the Minister because they are relevant.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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Is a 25% reduction in regulation the Government's domestic target?

Photo of Michael AhernMichael Ahern (Minister of State, Department of Enterprise, Trade and Employment; Minister of State, Department of Education and Science; Cork East, Fianna Fail)
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It is likely to be 25%. The EU target is 25%.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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What is the domestic target?

Photo of Michael AhernMichael Ahern (Minister of State, Department of Enterprise, Trade and Employment; Minister of State, Department of Education and Science; Cork East, Fianna Fail)
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Our regulatory burden is lower than that in most of Europe. The Minister will have to announce the exact figure but he has not told me because it is not in the reply. We will be aiming for a figure in the range of 25%.