Paul Coghlan (Fine Gael)

I welcome the Minister of State and his officials to the House and I welcome this Bill, particularly the increase in the audit exemption levels. I was one of the first to mention this and to discuss it with the Minister of State. My call went unheeded for a long time but I always knew from my chats with the Minister that his heart was in the right place. He and I agreed on this matter from day one. This was first proposed by the Institute of Chartered Accountants in Ireland, a body that knows more than most about the need for us to sharpen our competitiveness levels. The absolute need for this increase arises from the British Government's decision to increase the threshold in its jurisdiction, including Northern Ireland. The introduction this year of a new suite of auditing standards which are more complex and rigorous than their predecessors also necessitates it. These standards were clearly developed to meet the needs of global capital markets and not the SME sector. However, because the Irish threshold figure is currently so low, it impacts adversely on the small companies in this jurisdiction.

Small businesses already face significant impositions in this high-cost economy and we need the Government to at least act as a facilitator, rather than an obstacle, to the advancement of the sector. We cannot sustain an auditing regime that differs so much from that of our nearest neighbours and competitors. It behoves us to provide a fair and equitable system which at least means a level playing pitch with the British.

I want to raise the issue of consumer rights, about which the Minister said that until they are put on a statutory basis there will be serious concerns. The consumer strategy group published a report in May 2005 which recommended that a new national consumer agency should be established. The legislation was due to be presented to the Oireachtas in December 2005 under the timetable set out by the consumer strategy group and the agency was meant to be operational by the end of June 2006. However, there is no sign of the legislation either in draft form or otherwise. In this Bill the Minister has made provision for a temporary replacement of the Director of Consumer Affairs for a period in excess of six months. As Members may be aware, the former Director of Consumer Affairs, Ms Carmel Foley, resigned some time ago to take a new position in the Garda Ombudsman body and her position has been taken on an interim basis by a civil servant from the Department of Enterprise, Trade and Employment. This is yet another indication of the lip service paid by the Government to consumers' rights. It is unfortunate that we must wait and perhaps the Minister of State's response will tell us when he envisages its being put on a statutory basis.

Small businesses are the lifeblood of the Irish economy. They pay half of VAT on services, 11% of corporation taxes and 37% of income taxes. The future of Ireland as a knowledge-based economy depends on the small, indigenous business sector. We must ensure we are equipped to facilitate its growth. Small and medium enterprises are the lifeblood of the economy. Some 170,000 businesses and 650,000 jobs are in the small and medium sector and it is vital that the little guy has a voice in Government. That is why we believe a Minister for small enterprise would lead to long-term strategic thinking, a point of contact for the entrepreneur and a gateway into the decision making process. We welcomed the publication of the report of the small business forum. However, as ever, the Minister for Enterprise, Trade and Employment, Deputy Martin, is still one report away from positive action.

After nine years it should not be necessary for the Government to publish a report highlighting the issues affecting small businesses. The small business sector has been hardest hit by 50 stealth charges and taxes imposed by the Government in the last four years. There is now a danger that the Minister will use this report as an excuse to talk shop and do little. Given that this report is still necessary, we will hold the Minister personally accountable for the success, or otherwise, of implementing the proposals.

The Minister must now state when, and how, he will implement the report's recommendations, as they cannot be allowed to gather dust like so many of his other initiatives. I am also concerned that many of the recommendations rely on co-operation between all Departments. The Government has shown time and again that its various Departments cannot work together, whether on the excessive regulation of businesses, or co-ordinating penalty points.

The Minister must set up a new mechanism to co-ordinate cross-departmental co-operation. Many of the report's recommendations were addressed by us at our recent Ard-Fheis, including the need to slash regulation and control local authority charges. We also called for all new legislation to be business-proofed before being passed into law. All these proposals are included in a plan of action for small enterprise, which we will roll out immediately on entering Government.

As the report states, action is necessary in order to overcome the many hurdles faced by the small and medium enterprise sector, the single most important sector of the economy. Action is necessary to combat Government-fuelled inflation, ensure widespread access to broadband, overcome the infrastructural deficit, and open up sheltered sectors to competition. None of these areas is being actively addressed by the Minister and the danger is that few of them ever will be.

Although this Bill is a recognition that the Companies Acts are in dire need of reform, it does not go far enough. I regret that the opportunity was not taken for more root and branch reform in this area, which would help the small and medium sector fulfil its potential. In respect of public sector tenders why do we not introduce an exemption on withholding tax for those below the new audit threshold? What about allowing companies to pay their corporation tax one year in arrears in order to improve the cash flow of small businesses? We again call on the Government to amalgamate the eight employment bodies and consolidate the 25 Employment Acts and 11 Companies Acts to lessen the burden on SMEs.

One of the main regulatory burdens that affects smaller businesses is the process required for compliance with employment laws. Employment issues are currently regulated by 25 Acts and eight separate bodies. According to IBEC almost 50 new labour Acts have been introduced during the past five years. As small businesses tend by nature to be labour intensive and involve a greater hands-on commitment from the owner-managers, they are hit hardest by the need continually to play catch-up with new employment legislation. The Minister of State feels as strongly about this as I do. I welcome his initiative in respect of the audit exemption threshold and appeal to him to use his influence, whatever about that of the Minister, Deputy Martin, to alleviate these burdens which cripple business.

This employment legislation can deter new businesses hoping to enter the market or existing businesses contemplating expansion, causing them to think again which slows up the process. We also call for the establishment of a branch of the Small Claims Court that will allow businesses whose turnover is lower than the audit exemption threshold to deal with disputes in a more simple and cost-effective manner.

It is unfortunate that the Bill has come to us so late because it will not pass before the summer recess and small businesses must wait many more months before they can avail of its provisions. Nevertheless, I welcome the Bill.