Aideen Hayden (Labour)

I welcome the Minister of State to the House. We are all aware of the excellent export figures we have had recently. However, this good news belies the real issue that in order to recover, the economy must look to the domestic market. I will highlight three issues that are important in this regard. The report of the advisory group mentions the laws relating to insolvency and debt and the importance of changing those laws. However, it does not deal with one aspect of the situation we had in the 1980s. Then, certain businesses folded up one day and reinvented themselves the following day. I do not suggest there was anything untoward or illegal about that.

Let me give an example. The former Business and Finance publication restructured itself in 2002 and recently, Murano Publishing, the publishers of Business and Finance, folded owing €500,000 to the Revenue and other preferred creditors and significant other sums to unsecured creditors. It is these unsecured creditors about whom I am concerned. There is an issue with regard to the current situation because the suggestion seems to be that as long as the Revenue and the principal banks are taken care of, we are happy with what is happening. The position of small businesses is not well catered for in this regard. We need to look at the rules relating to restructuring and insolvency to discover what can be done to protect the non-preferential creditors, in particular those who comprise the sector this report tries to highlight. These are small businesses such as those secured against Business and Finance, owed amounts of,for example, €34,680 for one creditor, €11,380 for another and €41,979 for another. These are sums that are very significant to any small business trying to run from day to day and month to month on very narrow margins. I have concerns about that.

The second issue I raise is the importance of expertise. We could go further in this area. It is well recognised that one of the major constraints to the growth of small businesses is management expertise. Part of the difficulty is that many of the courses offered to business are offered in very structured formats and are time constrained, rather than in the format of what I call "just in time" learning, which allows expertise to be given to companies and businesses when they need it. We need to place more emphasis on support and mentoring groups such as Plato. Our third level, and our institutes of technology sectors in particular, are also a huge resource that could be made available to businesses through, for example, creating relationships between Plato organisations and local institutes of technology. The Letterkenny Institute of Technology in my colleague Senator Harte's area, for example, is an excellent institution that could be brought in to play to offer that type of "just in time" learning and support to businesses at the point when they need it, for example, in terms of strategic plans, marketing and so on. I envisage a situation where qualifications could be earned by entrepreneurs and business persons on the basis of the business plans they prepare. In that way we would not just provide people with help, but would give them expertise that would be of value to them in the future.

The third issue has been touched on by a number of other speakers and relates to funding and money. We are all aware that our banks are not lending. The State is pouring money in at the top level, but it is not filtering down to the bottom. This concerns not only small businesses but the mortgage market. One of the groups not mentioned in the report of the advisory group is the construction sector. It is now down to forming just 3% of our GNP, but as any statistics show, a vibrant economy needs a construction sector at or around 10%. There is significant difficulty in that regard here. We will never grow back to those levels if we do not have finance coming into small businesses. Many of the small businesses here were construction companies, based in small communities and employing two, three or four low-skilled workers. I am not being critical, but we will not solve this problem through the micro-finance fund or the partial credit guarantee. We need to look again at the resources available to us. The State now owns the branch network of INBS, the old Irish Nationwide building society and I understand that is on the market currently. I suggest we do not sell that branch network, but reopen it as a bank aimed at small business and at the ordinary man on the street. We know the main banks are not lending and that no amount of carrot and stick will make that proposal work, so rather than putting money into them, why do we not get around that problem by using the facilities that are available to us and putting the money directly through those facilities to the people who need it?