John Kelly (Labour)

I welcome the Minister of State. I also welcome the report and its recommendations. As a businessman, he will be aware of the issues faced by this sector, including those mentioned by Senator O'Brien such as the need for a licence to have a Thomas the Tank Engine ride outside his shop in Ballymote, County Sligo. The first line of the advisory group's recommendation on commercial rates states: "Although rates are generally a relatively small proportion of business costs for small businesses, they can be particularly burdensome for some small enterprises." My experience is that rates are a huge issue for small enterprise everywhere I go around the country. That is the main issue from a business perspective in my part of the country and I called on the Minister of State previously for a national revaluation of rates based on the pilot scheme in Dublin where three local authorities benefited to the tune of a 35% reduction as a result of a review.

I welcome one of the recommendations in the report which states that the outsourcing of valuations should be considered. My question to the Minister of State, bearing in mind we need to bring them into line with current market reality, is to whom can these valuations now be outsourced if we take the Valuation Office out of the equation.

Another issue is the variation of rates from one county council area to another. A plain example comes from my own area of Monksland, County Roscommon. A person can throw a stone from Monksland across the River Shannon into Athlone in County Westmeath. The rateable valuation in Monksland is €74.34 per sq. ft. whereas in the thriving town of Athlone it is €52.27, a difference of approximately €22 per sq. ft. This begs the question of why anybody would want to set up a business in County Roscommon when they can go across the river and set up for much less. It is an issue that needs to be addressed nationally.

The report refers to a local government efficiency review group which could realise savings of €511 million per year. I welcome that and I welcome the recommendation that this €511 million be passed on to small businesses, whether by way of rate reductions or otherwise. However, I want to know where these savings are to be found. The figure seems specific. If the Minister of State said €500 million, I would believe he had thought it up, but whoever came up with the figure of €511 million must know that savings of that amount can be achieved. I would appreciate it if we could discuss that issue.

I am sure the Minister of State heard in his own home town during and after Christmas that every small business was going to close down. In my own town, a number of pubs and small businesses have closed. We spoke about this on the last occasion the Minister of State was in the House. There is a need for a two-tier rates system, one for the blue chip companies, to which the Minister of State himself referred when I discussed this with him in the House, and one for smaller businesses. If a small business employing one person has a rates bill of, say, €4,000 and the books show it cannot pay it, what is the point in undue pressure coming from the local authority to lead it to close down a business, putting either one or two people on the dole at a cost of €21,000 or €42,000 a year to the taxpayer? Where is the logic in that? The Minister of State referred to joined-up thinking in his opening address, which is an issue I raised with him on the same subject the last time he was in the House. At the end of the day, we are pulling this money from one pot. There is no point in shutting down a business over as sum of €4,000 when it will cost us €42,000.

With regard to encouraging new business to set up, there is a need to consider giving a rates holiday to new businesses or else introducing a staggered payment structure at reduced levels, knowing we must also be careful to ensure this cannot affect existing businesses and cannot lead to displacement or undue competition. Mindful of that, we talk a lot of how we need to promote tourism more and the great capabilities we have to do that. I come from a town where the brand new hotel closed down last Christmas and did not open its doors prior to Christmas because of the bad weather. It put 40 people on the dole and never re-opened, costing the taxpayer €840,000 a year in social welfare payments, purely because it was not able to pay a rates bill of €40,000 and a water rates bill of €30,000. Again, where is the joined-up thinking there? It will cost us in excess of €700,000 a year because nobody could see there was logic in doing business some other way.

The Minister of State asked for ideas on how we can create employment. I have said this several times in the House and will say it again. In the context of the back-to-work scheme, as it costs €21,000 a year to keep somebody on the dole, if we were to give €10,000 a year to an employer to take a person off the dole, we would save €11,000 a year for that person every single year. If we were to create 100,000 jobs per year in that way, we would save €1.1 billion on the social welfare budget, plus receiving extra tax, PRSI, universal social charge and every other charge of which we have recently heard. This is a way that we need to start thinking because there is no other way. The likes of Mr. Mark Fielding will agree with me, that one must give inducements to get people off the dole and to get employers to take them on.

Finally, I want to mention NAMA. It is not something about which I know a great deal. From my investigations over Christmas, apparently NAMA is concentrating most of its business in the UK property market - the figure is approximately 80% - and it seems to be ignoring what is going on in this country. In this country, there are many auctioneers and estate agents trying to reactivate the business property market and they are in negotiations with NAMA for the purchase of many of its buildings. In rural areas where buildings may not reach the same value as buildings in Dublin or in the UK, these auctioneers and estate agents have their i's dotted and t's crossed, and everything is done except for NAMA to sign off on the bottom line to state that the unit belongs to it. These auctioneers have been ready to set up small enterprises. They are ready to go. They are six months waiting in many cases in County Roscommon for NAMA to sign off on property and nothing is happening. It begs the question as to why we are paying somebody €1,000 a day for 365 days of the year to run NAMA when it is forgetting about Ireland first? I hope the Minister of State would use his influence and access to get the answer to these questions. I would welcome his response.