Jerry Buttimer (Fine Gael)

The facts are the facts. The Senator is dead right. Governments of various hues since 1997 have brought us to where we are. Small and medium-sized enterprises, which are the lifeblood of our communities, are in serious trouble. I agree with Senator O'Malley that we need to get our house in order. We need to ensure this country's SME sector survives. I am concerned we will have nothing left.

I wish to refer to an e-mail I was sent by a friend of mine who owns a small enterprise in Cork. In the section of the e-mail dealing with the issues that affect him, he says that "costs are still too high". He mentions that his turnover has receded at a higher rate than costs like rent, rates, bank charges and energy costs. He asks legislators to force banks, energy companies, local authorities and insurance companies to realise that small businesses are the lifeblood of many local towns and that the services and employment they provide "must be preserved". He accepts that business people must endeavour to fulfil their obligations to the various institutions. That is the balance we must try to strike. We must allow SMEs to sustain, create employment and survive. The institutions must allow revenue to be generated and the banks must provide liquidity.

In the e-mail I mentioned, my friend also refers to the importance of allowing long-term leases to be amended to protect tenants in circumstances in which the level of business is not what was anticipated in the original business plan. Rightly or wrongly - he is approaching it from his own point of view - he calls on landlords to negotiate with lenders in order for them "to be able to service any borrowings." During the Celtic tiger years, the price of property was astronomical, rents went berserk and people lost the run of themselves. The fundamental task that faces all of us is to maintain and preserve the jobs we have, to create new jobs and to keep businesses afloat. This must be done. We cannot favour special interest groups or friends - we must look after all of our people. The other difficulty we have relates to consumer confidence. There is money in our country. People have money but they are afraid to spend it in advance of the budget. They are worried they are facing into four years of doom and gloom, brought to them in the main by Fianna Fáil and its friends.

The motion before the House notes that "1,132 businesses have been declared insolvent since the start of the year". That represents an increase of 12.5%. If that rate is sustained, almost 1,500 businesses will be gone by the end of the year. I listened to Senator Mooney's comments about the construction industry during the earlier debate on the banking sector. The construction industry is suffering the most. It is worrying that businesses in the services sector are also being affected. Almost 200 of them have gone out of existence. A further 140 businesses in the retail sector are also gone. We were told the establishment of NAMA would provide liquidity, ensure credit would flow, help to create viable businesses and households, allow our country to get moving again, enable people to get back to work and encourage consumer spending. Sadly, that has not happened. We need to send our banking institutions a message to the effect that credit must be allowed to flow. Approximately 40% of firms that have applied for credit facilities have encountered credit refusals. That is twice the refusal rate experienced during normal economic times. None of us wants bad business plans to be activated. At a time when viable businesses need to be able to access liquidity and credit, it is not good enough that so many of them are being refused. The Minister of State is familiar with this problem from his previous portfolio. I am concerned that the banks have become so insular and have retrenched to such an extent that they do not understand what they are doing.

Senator O'Malley spoke about pride. We all have pride in our country and want to see it rise Phoenix-like from the ashes to become a vibrant economic force once again. However, for that to happen leadership is required, as is a commitment and a willingness to reward entrepreneurs and help small and medium-sized enterprises, including that of the person who sent me an e-mail and whose small business is struggling.

The Minister of State is familiar with the Cork City and County Enterprise Boards. They carried out a confidence survey in which 61% of those surveyed said the level of credit availability was the same, which meant it was poor, while 36% said they believed bank credit facilities had deteriorated in the previous six months. That presents a massive problem in terms of confidence. Bank clients cannot access credit or pay suppliers and have outstanding debts. At a recent meeting between the Credit Review Office, the creation of which I welcome, and the Cork Chamber of Commerce there was a very clear indication of the need for businesses to use the Credit Review Office.

It is important that we establish the facts. The Financial Regulator and the Government can only do so much. The banks must play their part. We have bailed them out by giving them billions of euro. They, in turn, must help the economy to flourish and our entrepreneurs, not the big fat cats but the small business person whom the Minister of State and I both know and who is struggling to survive.