Dara Calleary (Mayo, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I thank Deputy Keating. This evening, we note the loss of Mr. Hugh Cooney, the former chairman of Enterprise Ireland, who did massive work for this country in that role and, more particularly in the past number of weeks, as an advocate of better health care particularly for men. I pay tribute to him and mark his passing. We had the Enterprise Ireland management team with us today at the enterprise committee and they reflected on a very successful 2014. Many of the initiatives that drove that success were ideas or visions that Mr. Cooney, as chairman, put in place. It is a very sad night and we wish his family, friends and colleagues every good wish at this incredibly difficult time.

The coverage of last week's budget focused on some welcome initiatives for the self-employed, namely, the tax-free allowance and some other issues, but it gave the impression that it was a bumper budget, particularly for the self-employed, when the reality is very different. A comparison of the likely outturn of the Department of Jobs, Enterprise and Innovation's budget this year versus what is promised next year shows a €44 million cut. There is no increase in the budget for the new local enterprise offices, even though they have all hit the ground running in their localities and are generating more activity. That was some of the feedback from our meeting today.

There has also been a cut in capital funding for Údarás na Gaeltachta and there is significant confusion and frustration in Gaeltacht communities regarding the role of Údarás, its interaction with other agencies and the lack of support available to Gaeltacht areas from other enterprise agencies.

The capital gains reduction for entrepreneurs is welcome, but it is still far off the mark compared with what is happening in Northern Ireland and in England. We are increasingly in competition with the Six Counties and with England, Scotland and Wales for people to establish businesses. The tax arrangements in those other jurisdictions are far stronger and more encouraging than those here.

The employment investment incentive scheme continues to be a drag and continues not to work. We are continuing to tinker with it, but it is still not taking hold. The Minister of State knows that too.

There is the whole issue around the credit guarantee scheme amendment Bill. The credit guarantee scheme was first independently identified as having issues in October 2012, even though we had been pointing out those issues for some time. We are three years in now. I know the delay is not in the Department, but, apparently, in the drafting office in the Attorney General's office. However, it is not good enough, because there are specific provisions within the credit guarantee scheme amendment Bill to allow businesses that are restructuring their finance because the banks are exiting the market to access the guarantee fund. They cannot do that until this legislation is passed. Many businesses - the Minister of State and the Chairman do not need to be told this - are being forced into a position of refinancing their packages because their banks are exiting. There are so many issues.

The changes to employer PRSI go nowhere towards covering the increase in the minimum wage and many employers are going to be out of pocket. We welcome the increase, but the manner in which the changes to PRSI are being made will leave many employers out of pocket. I encourage the Minister of State to look at that in the context of the Social Welfare Bill. Finally, when we look at the range submitted by the Department and the Minister of State as part of the ministerial team to the Department of Finance, we have to ask about the influence of the Department of Jobs, Enterprise and Innovation at the Department of Finance. Given that many of the proposals the Department of Jobs, Enterprise and Innovation submitted came from our committee or from its engagement with businesses all over the country, an engagement that has not been had in the Department of Finance, there is a great deal of frustration at issues like finance and supports within the business community at the moment. There is a need for a signal that those frustrations will be taken seriously.

Damien English (Meath West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I join Deputy Calleary and other members of the committee in offering condolences to the family of Mr. Hugh Cooney. The impact he had when it came to enterprise development and job creation goes without saying. He had a major influence on policy in that respect. I agree with Deputy Calleary and second his good wishes to his family at this time. It is a difficult time for them, but we recognise the work carried out by Hugh over the years.

The initial topic of debate was the supports and measures taken to encourage start-ups and entrepreneurship. That is a key part of what we are trying to do in Government. The first entrepreneurship strategy was produced by this Government. There were many Governments that went before it, made up of all the parties represented here tonight, which did not bother producing an entrepreneurship strategy, plan or policy statement. The idea of that is to focus the needs and concerns of all Government Departments, including the Departments of Education and Science and Jobs, Enterprise and Innovation, on what needs to be done to drive a new culture of entrepreneurship. That will feed into successful start-ups now and in the future. It is an important step and there is an implementation body behind that, chaired by the Minister, Deputy Richard Bruton. There were 96 actions across that policy statement and we are making progress on all of them. They are all part of the wider drive to support entrepreneurship. I know the Deputy also wants to focus on the budget, so I will come back to that, but there is a recognition that we have to do that and change the culture. I recognise that too. The enterprise committee had a role in some of the actions. Mr. John O'Sullivan chaired an initial forum to fit into the strategy that produced that document. Many key actions in that have been implemented, and rightly so. Key parts of that are mentoring, access to finance and a culture change to encourage people to think of being an entrepreneur. That is why we had the start-up gathering in early October, to drive that thinking and to advertise what is available to the start-up community, both locally and internationally. The start-up gathering had a big impact throughout the country, with over 400 events to get the message out that we are supporting start-ups.

The budget must be seen in context. I see it as a step in the right direction. It does not do enough for anybody in any sector, but it is a show of intent, to start pointing in the right direction that we want to do much more for entrepreneurs and for those who are in business. We had the new tax credit and we have committed to closing that gap over the next three years. Maybe if the economy allows it, we will close it more quickly. Why was it there in the first place? This is the first opportunity the Government has had to correct it. It is a signal of intent. It is worth €550 this year and we are committed to changing that in the next two years, so it is a very clear issue.

On capital gains, we know it does not go far enough to compete with our competitors. However, one must also review how it started in the UK. The tax percentage was higher, but there was always a €1 million level as well. That has increased in the UK. Likewise, I would see it as something we want to progress here. It starts at €1 million. We have a finance Bill and we can discuss it then and hopefully we can increase it over the years ahead as well. The 20% rate is a big improvement on the 33% rate. I understand what Deputy Calleary is saying, that it is not enough when compared to the UK or across the Border, but we have to accept that, again, this is a budget that tries to put us on the right footing. There is no magic pen to do everything we want to do in one year and one budget. We are signalling our intent of where we are hoping to go with this.

There are many offerings available to start-ups and existing businesses to encourage them to increase employment. Over 70% of businesses say they are confident they will increase the numbers they employ this year or next year. Supports are in place to encourage them to do that, including JobsPlus. There were different schemes over the years. Recommendations came from the committee to make it simpler and more straightforward and now it is quite straightforward for companies to say: "We will employ somebody off the live register. There is a grant for that and we will avail of it." There are many supports there. There have been 1,000 actions over the past three and a half years on the Action Plan for Jobs process. Over 90% of them are directly useful to SMEs, start-ups and companies.

Dara Calleary (Mayo, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I welcomed the policy statement on entrepreneurship at the time, but when another wing of the Minister of State's Department, the National Competitiveness Council, published the Irish competitiveness scorecard in 2015, it said that "elements of Ireland’s environment for entrepreneurship are relatively poor in an international competitiveness context; in particular, reducing the time and complexity of procedures associated with enterprise start-up". That was published some nine months after the enterprise strategy was published.

Second, the small business review group identified several issues. One of them, as the Minister will remember from his time as chairman of the enterprise committee, was the whole area of personal guarantees and the continued insistence of banks on personal guarantees from entrepreneurs who want to start up a business or grow a company. Has there been any action on that? I recall the Minister of State once described as archaic the fact that we are one of the few countries in the world that still insist on people doing that. What is the position on the proposed change in bankruptcy laws? Will it be done before the Government finishes up?

The Minister of State will know that I am really passionate about the area of entrepreneurship in education and I welcome the young entrepreneur programme. That has taken off very well and I see it invading schools in the same way the green flag project has done for the environment in schools. In terms of the curriculum review of entrepreneurship in schools, it cannot be taught; it must be fostered. The practicals, the encouragement and the experience of entrepreneurship cannot be learned from a book or learned by rote. It must be fostered and created. What supports are both the Minister of State's Departments putting in place to get some sort of cohesive sense of fostering an entrepreneurship culture in our schools?

Damien English (Meath West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

A couple of issues were raised there. First, I want to go back to the credit guarantee scheme. It is a priority of the Minister, Deputy Bruton, to bring that in.

On the issue of entrepreneurship in education, the entrepreneurship strategy singled out very clearly six top priorities, of which education is one. It cannot just be addressed in second or third level; it has to start at primary level.

A proper strategy will be put in place. I am very interested in getting this correct at primary and secondary levels and in third level education as well because, as Deputy Calleary correctly stated, we want to develop a culture of entrepreneurship. One cannot merely teach it. It must be part of one's ecosystem and education as well. That is a key priority also.

There were two other key questions. Deputy Calleary mentioned the regional plans but he failed to mention the local enterprise offices, LEOs, which are doing great work. There is funding to continue the great work LEOs are doing and to increase and expand their services also.

Science Foundation Ireland, SFI, is also doing great work and encouraging more SMEs to get involved in the research community. That also brings me back to the knowledge patent box, or "knowledge box". There is an impression that the knowledge box is not for small Irish companies. That is completely untrue. Over 2,000 companies on a yearly basis avail of the research and development grant and they are well able to use the knowledge development box to add to what they offer and increase their products and services, and sales. That is to encourage start-ups.

We are very much focused on start-ups and supporting businesses. The supporting SMEs online tool goes through in detail the 80 different Government supports that are available. I keep stressing to companies that it is difficult to give financial supports to companies that compete with each other on the high street. This is why many supports are directed to companies which export, and that is what we are trying to do. The internationalising agenda is our major focus and most companies understand that now. However, there is a range of soft supports available to encourage those companies to grow. Even the online tool is available in that regard. There are many issues there.

There is a competitive fund set up under the regional plans. Local areas, counties or regions can come together to avail of and compete for those funds to be able to back up something that they are doing well locally. That is another major area that we will be funding.