Averil Power (Fianna Fail)

I am pleased the Minister of State with responsibility for small business is present and welcome him to the Chamber. Small businesses have a significant value to the economy. Most companies employ fewer than 50 people and smaller businesses are better embedded in the local economy. While we have had major success in attracting large manufacturing companies to locate in this country and create upwards of 1,000 jobs overnight, some of these companies close within a few years leaving a massive employment gap in the local area. Small businesses, on the other hand, are spread out and more embedded in the local economy.

Our economic future lies in trying to encourage higher levels of entrepreneurship. It is noteworthy that the vast majority of small businesses are Irish owned whereas at least 40% of larger companies are foreign owned. Several key reports on industry have concluded that the future of the Irish and European economies lies in the services sector. Small companies account for 50% of the total turnover in this sector which has significant potential for growth.

Smaller enterprises face many problems. As Senators are aware, many have gone out of business in recent years, while many others are struggling. A large number of business owners worry that they will not be in business next week. Given the pressure the sector is under, I hope the small business advisory group, the first meeting of which the Minister of State chaired the other day, will quickly produce results.

Senator Kelly referred to local authority rates. While I welcome the positive measure in the jobs initiative to reduce VAT for the tourism sector, the level of rates is crippling local businesses and making it difficult for them to make a profit. As has been noted, when a company goes out of business the relevant local authority no longer receives rates from it. Energy costs also need to be addressed.

On the issue of access to credit, the previous Government established the Credit Review Office. The Irish Small and Medium Enterprises Association, ISME, has expressed concerns in recent weeks about whether credit is making its way through the system to small businesses. The position in this regard needs to be monitored to ensure credit is being released.

Senator Norris referred to bankruptcy legislation. The future of the economy lies in entrepreneurship and encouraging people with good ideas to take a risk. Ireland is one of the worst places in the world to take a business risk. International evidence shows that a large proportion of new business start-ups fail. Many entrepreneurs do not achieve success until they realise their third or fourth business idea. We must ensure people can make a mistake without being made bankrupt and prevented from starting up another company. This requires a review of the bankruptcy laws.

The enterprise agencies must become more proactive in their approach to incubation centres. While a procedure is in place to establish community enterprise centres around the country, the focus is on having local groups make the running in this regard. I hope Enterprise Ireland and the county enterprise boards, the role of which is under examination, will take a more proactive approach by identifying gaps and making it easier for local groups to establish new incubation centres. We need to find a means of supporting start-up companies. Incubation centres are a proven means of doing so.

The Tús scheme is an excellent initiative in the area of activation. Tús commenced at the start of 2011 and allows local sports and community groups to avail of the services of people who are unemployed. It gives the unemployed person skills and provides major benefits to sports clubs and other bodies which are able to take on coaches and so forth. I gather, however, that the number availing of the scheme has been low. Has the Government analysed the reasons for the low take-up and identified what steps could be taken to boost participation rates? The scheme has the potential to make a positive contribution.

Tourism is our largest domestic industry. Spread around the country it extends from bed and breakfast providers employing two people to hotels employing 500 people to the convention centre which employs more than 1,000 people. The sector has major potential to develop, especially in the area of marine tourism, which is underdeveloped. We are an island economy with beautiful natural resources but it is not something we are good at doing.

I represent the area of Dublin North-East where we have a fantastic coastline along Howth and Portmarnock but it is under-utilised. If one travels to Greece or countries with such harbours they do tours in and out every ten minutes and make a great deal of money from marine tourism. It is something on which we should have a more specific strategy.

I echo Senator Kathryn Reilly's sentiments about youth unemployment. One of this country's major advantages is that our young people are among the best educated in the world. It is a great loss to us that many of them are having to go abroad but there are provisions in the jobs initiative for internship programmes and training. The Government is building on the work the previous Government did in that area and I hope there will be a major impetus in that regard because if we can keep people at home when they finish their degree and enable them to build up the work experience they need, it will help them to build a future here. If we lose them to emigration and they start to build their lives elsewhere because they do not see any opportunities here it will be a great loss for the investment that has been made in their education both by themselves and the State.