John Perry (Sligo-North Leitrim, Fine Gael)

I thank Senators for their contribution to this debate and for their encouraging words of support for the measures in the jobs initiative. I am also grateful for the expressions of personal support on my appointment. I also congratulate the Leader on his appointment. As Minister of State with responsibility for small business, I fully recognise the critical role of 250,000 companies employing in excess of 750,000 people. There is broad agreement across the House on the importance of small business in generating growth and employment in our economy to assist with our recovery. There is a need to recognise the importance of this sector, to provide support to it and to encourage entrepreneurial effort and business development. Integral to this is the need to promote confidence among businesses and consumers alike.

Senator Burke referred to confidence and credit. There have been notable successes in recent months, including the massive jobs potential of the IDA investment in Ireland. Enterprise Ireland has been very successful and the real challenge of Government is the domestic economy. The programme for Government, the jobs initiative and my appointment as Minister of State with responsibility for small business, all confirm the commitment of the Government to small businesses. Our record over the first 100 days in office shows the seriousness of our intent. Senator Norris made a point about the bankruptcy laws and it is important that they are reviewed. They apply for 12 years in Ireland while the period is one year in the UK and that law will be examined. The challenge for Government is the speedy delivery of the jobs initiative, which should give confidence to businesses that their contribution is acknowledged and supported. Supporting businesses in the domestic economy is critical. I want to assure this House that I intend to continue to ensure there is a clear focus on the small business sector and that through my dedicated office I will reflect to Government the key issues that are having an impact on the sector.

I welcome the opportunity provided in this Seanad debate on the jobs initiative and competitiveness to hear Senators' views on the importance of small business and the contribution the jobs initiative will make to our economic recovery. Since the commencement of this debate, along with the Taoiseach, I launched and held the first meeting of the small business advisory group on Thursday, 16 June, the Government's 100th day in office. It is vital that the voice of small business is heard and reflected in our policies to grow jobs and rebuild the economy. I intend to drive this consultative process in my role as chairman of the small business advisory group. In endorsing my initiative in establishing the group, the Taoiseach emphasised that small business can be one of the key drivers in restoring our economic growth and in increasing our levels of employment.

I recognise that the small business advisory group will be working against the backdrop of the most difficult challenge ever confronted by this State in regard to public finances. It is essential that as a Government we communicate what we are doing and that we hear at close hand the issues that need to be addressed more urgently. I have listened to the many issues raised in this debate, including confidence and the sum of €20 billion ring-fenced over the next three years. It is important that this is transparent and evident. We must consider the measures that can be considered to further support small business. I have been encouraged by the robust and positive engagement by the members of the group and by their desire to bring forward practical suggestions to assist the sector. This will not be driven by the idea of another consultant but by straight talking, action and results. This Government does not need another consultant to produce another report. What needs to be done is evident.

Membership of the small business advisory group includes entrepreneurs and representatives from the main small business representative bodies, the Credit Review Office, the State enterprise support agencies, Forfás, Enterprise Ireland and the county and city enterprise boards, as well as officials from my own Department. Senator Coghlan referred to the involvement of Mr. Trethowan and I hope to raise the limit for his office's involvement from €250,000 to €500,000. Next October, it is the Government's intention to hold a forum on mobilising SMEs for the future of Ireland. This will be a national debate and I hope to launch it with the European Commission. In mobilising SMEs we hope to address the issues of regulation, credit access, procurement contracts, the think small first principle and opening new markets. The potential for growth in small companies is clear but many of them are being excluded from tendering for €15 billion in State contracts. Access to credit is paramount. The 2009 code for banking obliges the banks to respond to loan applications within a timeframe of 28 days. They cannot string clients out for four months.

A number of Senators spoke about the difficulties experienced by small businesses in accessing credit. This issue is at the core of Government action and is the centre of the jobs initiative. There are three principles in business. The taxpayer has put billions of euro into the banks and I expect them to invest that money in viable companies which can create jobs. It is a three-way combination. The taxpayer and the Government have delivered but the jury is out with respect to the banks. The small business people will create the extra jobs unless they are restricted from doing so by their banks. The Government is taking measures to restructure and recapitalise the banking system to ensure it provides substantial new lending into the economy. The financial authorities will be rigorously monitoring the banks' activities to ensure credit is available to borrowers who meet reasonable credit standard requirements. Banks have changed the definition of "viability" considerably but I intend to engage further with the Irish Bankers Federation, the two main banks and the other institutions in this regard. The Minister for Finance will be setting lending targets for the pillar banks and performance against these targets will be measured. I have the height of confidence in Mr. Trethowan's office. I have heard many stories about the difficulties that small companies are experiencing. People want support rather than grants. They want encouragement to retain their businesses. There is a great sense of pride in owning a family business. Nobody wants to close down a company because it has a huge impact on the family and everyone else.

Following the recapitalisation of the banks, there is sufficient capacity to provide credit to viable businesses. Such businesses should not be afraid to approach their banks or slow to appeal refusals of credit to the internal structures of the banks or the Credit Review Office. I urge businesses to make more use of these appeals mechanisms and ask Senators and other politicians, along with business representative bodies, to encourage businesses to follow formal appeals procedures. It is also important that examples of refusals are brought to our attention. Mr. John Trethowan has the capacity to pursue cases with the banks and has an open door to assist any small businesses being refused credit.

Several Senators welcomed the proposed temporary partial credit guarantee scheme announced as part of the jobs initiative. I am pleased to confirm there has been further action in this matter since our last discussions. A call for competition for the design of a scheme was published by my Department on the e-tenders website on 15 June. This will be a targeted scheme aimed at commercially viable businesses that can demonstrate repayment capacity for additional credit facilities but which cannot secure credit due to insufficient collateral for the additional facilities or because they are growth or expansionary companies which, due to their sectors, markets or business model are failing to get support under the banks current commercial lending.

It is important that we deal with vital emerging markets, such as tourism, creative arts, green energy, medicine and modern agriculture. The design of this scheme will draw on international experience to support new lending that would not otherwise have been extended by the banks. In this way, the scheme will complement rather than substitute existing lending activities by the main financial institutions. It will be designed to encourage banks to lend to new or expanding commercially viable SMEs to allow them grow, develop new products and expand into new markets. The Government's commitment will be for an initial period of one year. Specific performance criteria will be set down to allow for review and revision of the scheme at the end of that initial period before committing to a roll-over for subsequent years. There will be a modest level of exposure to the taxpayer when the scheme is launched, but there will also be a significant positive knock-on benefit to the economy in terms of job creation, welfare savings and returns to the Exchequer by way of tax revenue generated. It is intended to have a targeted scheme in place by the autumn. Of itself, the temporary partial credit guarantee scheme will not solve all the issues around access to credit but it will form a key component in the suite of initiatives aimed at ensuring the flow of credit.

The micro-finance start-up initiative is another key component. The Government acknowledges the difficulties which can be experienced by micro-enterprises in getting access to finance at an early stage of business development. Getting working capital is critical for start-up businesses. The Government is committed, therefore, to developing a suitable micro-finance fund for the micro-enterprise sector. Arrangements for the establishment and operation of such a fund will be developed in consultation with the relevant stakeholders, with a view to formalising proposals for this year's budget. This commitment represents the Government's contribution to filling this gap in the area of financing enterprise.

To improve the cash flow of businesses and particularly small businesses trading domestically, the Government is now requiring the Health Service Executive, local authorities and all other public sector bodies, excluding commercial semi-State bodies, to pay their suppliers within 15 days of receipt of a valid invoice. This measure is applicable from 1 July 2011. We hope to put in place a code of conduct for commercial companies whereby they pay smaller companies within 30 days because they can take up to 90 days at present. The initiative is an extension of the arrangement that currently applies to payments made to suppliers by Departments. I have already written to my colleagues asking them to take a direct interest in how the agencies under their aegis comply with the requirement. State agencies are also required to publish quarterly reports on their websites outlining their performance in meeting the new requirements. In addition, Ministers will be responsible for publishing reports on the performance of all bodies for which they have responsibility.

I note the concerns expressed by a number of Senators on the application of the pension fund levy designed to raise funding for the jobs initiative. The levy will apply at a rate of 0.6% to the capital value of assets under management in pension schemes approved by the Revenue Commissioners under Irish tax legislation. The schemes affected are retirement benefit schemes, that is, occupational pension schemes, retirement annuity contracts and personal retirement savings accounts, other than what are known as vested PRSAs. While the primary responsibility for policy in this area rests with the Minister for Finance, I can confirm that the pension fund levy provisions of Finance (No. 2) Bill 2011 were amended on Committee Stage to ensure that pension fund trustees will not be allowed to reduce disproportionately the benefits of any member or class of member of a pension scheme.

The pension fund levy is a temporary measure at a relatively low rate and will fund initiatives targeted to assist those most in need in the economy, namely, the unemployed. Much of the value of pension funds is attributable to the rolled-up value of generous tax reliefs that pension savings have historically been granted and continue to receive. The temporary levy on pension funds will allow recipients of past generous tax relief to make a contribution to assist those who are looking for jobs.

We touched on many other issues during this debate. Several Members, including the Leader, Senator Cummins, displayed an understanding, concern and respect for small companies, which is very important. Senator Cullinane made a point about the IT in Waterford. The criteria for the technological university of the south east is under review at present. The programme for Government is committed to exploring the creation of a university in the south east. The Leader has been actively pursuing that issue. It is important to put that on the record.

Given that he is present I will refer to Senator Colm Burke's points. The banking situation is critically important. It is at the heart of the difficulties in the domestic economy. It is critically important that we support enterprise. On Senator Cullinane's point on the jobs initiative, this is the first step. We are going to encourage the 250,000 companies to create jobs. Job creation is a core aim of the Government. We will encourage employers to create jobs. They will work closely with the Minister for Social Protection, Deputy Burton, on the transfer of welfare benefits to people taking up employment.

Reference has been made to many issues. The jobs initiative is just a start. A youth employment internship programme has commenced. A major announcement will take place on enterprise boards which will be effective in all regions. The Government is pro-business. We wish to encourage employment and get 500,000 people back to work. I accept that more needs to be done. There is much expertise within this House. I thank Senators for their contributions. I look forward to returning to the House to discuss many other issues. It is important that debate is generated on employment. We must engage with every elected Member, especially Senators. The many good contributions that were made will be taken on board by my senior civil servants in the formulation of a policy that will be focused on the recognition, respect and concern the Government has for business.

We are actively listening to those involved in the domestic economy. Foreign direct investment is doing exceptionally well. The Minister for Jobs, Enterprise and Innovation, Deputy Bruton, was in America last week where he received an extraordinary reaction. American and European companies are still investing in this country. Enterprise Ireland companies are doing exceptionally well. Our job at the moment is to kick-start the domestic economy. Small companies are the backbone of the domestic economy. That is why I very much value the extensive debate in the Seanad and the ideas that have been presented.

The Government is listening actively. Our job is to ensure that the ideas expressed in the debate will be taken on board in the coming months. The aim of the Government is to get this country back working again. I look forward to travelling around the country to all the constituencies in the coming months to clearly outline what the Government will do, which is to mobilise SMEs for the future of Ireland. We will travel to every county to mobilise SMEs and bring in the key people and the bankers to inform us about what they are doing in their region to help SMEs. Successful entrepreneurs exist and the Government's job is to create an environment that is conducive to employment. I am delighted to work in this area. I would appreciate it immensely if people would put forward their ideas to ensure that we are listening to people on the ground and that we are not like the previous Government which was intoxicated with power. Our job is to ensure we represent people, listen to the issues that arise and encourage enterprise.