Mary White (Fianna Fail)

As a Government Senator and nominee of the Irish Exporters Association, and as the co-founder of a medium-sized business employing 100 people, which will rise to 130 by the end of the year, I am pleased to speak on this legislation. Given my experience, I can speak on the significance of this Bill for small and medium-sized businesses. The proposed measures are progressive in that they ease the regulation burdens on business and facilitate its more efficient participation in today's international economy.

The Minister of State and the officials in his Department have listened and responded to the concerns of small and medium-sized businesses. I commend him and his officials on their approach to these important issues. The legislation incorporates as many recommendations from businesses as fall under the remit of the Minister of State, and that is representative of the partnership-style of Government which has been so successful for our economy over the past ten years. The most welcome development in the Bill for small and medium business is the raising of the audit exemption threshold to the maximum allowable under EU rules, namely, €7.3 million turnover, up from €1.5 million.

The Bill will ease the additional administrative burden of annual audits for some thousands of businesses, and create a parity in the audit exemption thresholds with businesses in the North, in the United Kingdom and other EU states. This also affects voluntary and community organisations which will be relieved of the time and regulation burden of being audited because they fall under the new threshold.

The roll-back of the regulation has a symbolic significance in that the process of more and more regulation will henceforth be tempered. The important message to business people who participate on business fora, committees, etc., is that they will be listened to. The report of the Small Business Forum, published last April, recommended that Departments should formally assess the merits of exempting small businesses from new regulations, or of modifying such regulations to make allowance for the special needs of small business. The forum was set up by the Minister for Enterprise, Trade and Employment, Deputy Martin, and chaired by the general manager of Microsoft Ireland, Joe Macri.

Raising the audit exemption threshold to €7.3 million will ease the regulatory burden and obligation on many small and medium sized businesses to conduct a costly and burdensome annual audit. This was a key recommendation in the Small Business Forum's report.

When we started our business we had to do the audit every year which was wearisome and costly. It is hard on small businesses starting up because customers such as Senator Quinn, who is present, like to see a blue chip auditor. When we started up it cost us £1,000, a large sum of money. Now we pay approximately €15,000 and will not be exempt because we exceed the €7.3 million threshold. In addition, if a business does not have an in-house accountant it must pay for accounts management, etc., so it pays on the double. That is what makes this a dramatic initiative which sends out the message that the Government supports business and enterprise.

The Small Business Forum pointed out that while there are advantages in obliging companies to undertake statutory audits, these advantages can be outweighed by the enormous cost of an audit, in the region of €10,000 to €20,000. IDA Ireland is committed to developing the breadth and depth of the international financial services industry in Ireland. While continuing to market Ireland as a centre of excellence for transaction processing, IDA Ireland is also targeting other sophisticated revenue generating activities. Existing developments in securitisation give us the potential to develop as a primary centre for specialist debt and financing products. This is in line with lDA Ireland's strategy to drive the development of knowledge-intensive high value investments.

Business regulation in the field of company law feeds into improvements to our national competitiveness through high standards of corporate governance. This brings about a stable and predictable environment in which entrepreneurs can establish businesses, investors can invest, creditors can lend, and the interests of the employees, consumers and other stakeholders are protected. Ireland's economic future is inextricably bound up with the global economy through investment, trade, people and business generally. We have to be at the top of the game in every aspect that affects competitiveness. The progressive changes in securities trading, and transposition of two EU directives will bolster Ireland's competitiveness, helping us attract foreign investment in an ever more competitive global market.

In the securities trading industry the Bill makes it mandatory to hold in electronic form share certificates and stock transfer forms, bringing us in line with international norms. This will assist greater ownership of listed Irish securities by foreign investors, reduce costs associated with share dealing and enhance Irish securities competitiveness. Given that many Irish companies are listed on the Irish and London stock exchanges, this will be a beneficial and progressive move forward.

The Bill also seeks to limit the obligations on guarantors in respect of statements in the prospectus content — a prospectus being the legal document which outlines what a company has to offer participants and buyers. The Bill legislates for the conversion of the transparency and takeovers directives into Irish law. The transparency directive will raise the quality of information available to investors on the company's performance and financial position and any changes in shareholder policy. Ultimately, it will protect investors and enhance confidence in shareholding and the market.

The Bill will also give effect to the new takeovers directive of May this year. The Bill reflects the Minister of State's and his Department's and Government's recognition of the fact that the economic future depends on maintaining and furthering our competitiveness in an ever-evolving global marketplace. It is all about being competitive. Small and large companies will not survive if they are not competitive. I thank the Minister of State for sending a signal to our businesses and international business colleagues that Ireland is playing its part in globalisation, is not over-regulated, wishes to do business and wants its businesses to succeed.