Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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Question 7: To ask the Minister for Jobs; Enterprise and Innovation if he will develop financial supports to businesses to encourage them to keep staff gainfully employed instead of having to let them go. [28881/11]

Richard Bruton (Dublin North Central, Fine Gael)
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Job creation is central to our economic recovery and the programme for Government has job creation at its core. The role of my Department is to ensure that we have the right policies in place that will support and grow our enterprise base in order to facilitate both job creation and job retention. On a national basis, the jobs initiative announced on 10 May focuses our limited resources on measures that offer the greatest potential for expansion and employment creation in the domestic economy. There are 200,000 companies employing up to 900,000 people in the domestic economy and our job is to kick-start the initiative there because the sector is the backbone of the domestic economy. Initiatives such as the reduction in the VAT rate and the reduction in the low rate of employers' PRSI were designed to keep people gainfully employed. During the most acute phase of the recent recession, grants were offered to exporting companies to help them adapt to the difficult conditions. Some companies have used part-time working as a way of adapting to temporary falls in demand and receive support from the Department of Social Protection.

Very many of the programmes operated by the Department's agencies are designed to help businesses develop their product range, open up new markets or improve their skills and processes in order to keep people in employment. For example, Enterprise Ireland provides a range of supports to assist companies, especially SMEs, to meet the challenges of exploiting new business opportunities, thus sustaining jobs. These include research and development grants; programmes to improve productivity and processes; management development and mentoring; and supports to enter new export markets. The Minister's recent trip was all about exploring the huge potential in that regard.

The Government's work in restructuring the banks to create two pillar banks capable of lending into the domestic economy is central to our strategy for job protection. The Government has recognised that there still is market failure in providing finance to SMEs and we are working on the early introduction of a temporary partial loan guarantee scheme which will help.

Peadar Tóibín (Meath West, Sinn Fein)
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On a weekly basis, small businesses are going out of business and the jobs lost weekly are almost equivalent to the number of jobs lost in TalkTalk. This is a silent annihilation of businesses and the jobs involved. Each time a business closes and a person goes on to the live register, it costs the State €20,000. If we remove a person from the live register, there is a saving of approximately €13,000. Germany and other countries have a subsidy system whereby the Government gives the business a subsidy to employ an individual, perhaps on a short week or for three days a week. Can our Government not do something similar? If, for example, €500 million was spent over three years on such a programme, this would save the State €500 million net, because many of those people would not be going on to social welfare. This would also give the State the opportunity to provide training and up-skilling for these individuals on the two days they are not working.

John Perry (Sligo-North Leitrim, Fine Gael)
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The Minister for Social Protection, Deputy Burton, has introduced an internship programme which has been very effective as can be seen by looking at the uptake and the opportunity provided by the scheme for SMEs. The 200,000 small companies that employ 900,000 people are the backbone of our economy. We must recognise the services and manufacturing sectors and we have a deep understanding, respect and concern for them and will provide a service to them as they form a critical mass for the economy. I have spoken to several employers on the issue of the internship programme and I know that some changes will be made that will encourage a greater retention of staff beyond the nine-month period. The real job of government is job retention and to keep every business possible open.

The micro-finance fund to be introduced by the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, will be critical, as will the partial loan guarantee and the ring-fencing of €20 billion for the two banks to be lent to SMEs over the next three years. Our job is to ensure access to credit. However, a question that must be taken into account is whether companies are viable. Banks will not give money to companies that are no longer viable. Our job is to ensure confidence and credit in the economy. We have the highest rate of savings ever and must ask people to "Buy for Ireland" and encourage them to spend locally, because banks will not give money to a company that is not viable.

Peadar Tóibín (Meath West, Sinn Fein)
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The Government has told the banks to deleverage €70 billion and it has told them to give €6 billion to small businesses. The two objectives are mutually exclusive and cannot be achieved at the same time. With regard to the national internship programme and unemployment, we have almost 500,000 people on social welfare, but only 5,000 positions are being provided on the national internship programme. If the problem is as big as Kildare Street, the solution is the same size as this glass. The mismatch between the scale of the problem and the solutions attempted by the Government are incomprehensible. There is no match between the problem and the solution when there are only 5,000 internship places for 500,000 unemployed.

John Perry (Sligo-North Leitrim, Fine Gael)
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I come from a business background where it is said: "No problem, no business." There will always be problems, even if the Deputy assumes it is as easy as he assumes it is to solve the problem. The Government has clearly come up with a radical plan to encourage business people to hold onto staff. It has done the same with regard to the banking issue, through placing John Trethowan in charge of the credit review office. It has also ensured that the two pillar banks will be observed over the next three years so that the €20 billion that has been ring-fenced for SMEs will be dispensed. We also have the partial loan guarantees. I am on the ground with regard to business and it is not as simple as the Deputy thinks it is to solve the problems.

Peadar Tóibín (Meath West, Sinn Fein)
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The credit review office has only dealt with 30 cases this year.

Michael Kitt (Galway East, Fianna Fail)
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We must move on.

John Perry (Sligo-North Leitrim, Fine Gael)
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It is not a simple issue. Deputy Burton has initiated a very good internship programme and I guarantee there will be a lot more placements on it.