John Kelly (Labour)

I welcome the Minister and all our guests in the Gallery. In line with what Senator Landy said about Labour Party Senators being involved in business, I was born and bred in a small retail shop in a rural area - my parents are still running it - so I know a little about small business. I do not claim to know everything but I have opinions on certain issues relating to business.

I will speak on three aspects of the motion. The first relates to opening up the rules on tendering and procurement to enable a wide range of firms and businesses to seek public contracts. This is an important issue. Under EU law we are making it easy for foreign companies to come to this country and get big contracts. We do not seem to be able to compete with them, in particular on major road projects. One could ask what is the material gain for us in doing that. There is no material gain.

"Identifying Opportunities for Sustainable Public Procurement", is a document that was produced by ClientEarth. It outlines the importance of ensuring sustainability criteria to achieve the most economically advantageous tender. It suggests that in any tender process it should not be just about the cheapest price. For road projects the Spaniards and Turks will offer the cheapest price and they will have their own money but in such a tendering process one must also build in whether there is a locally based company, if the company is a rate payer, and how many people are employed locally. If and when a local person gets a contract he or she will employ people and take them off the dole. They will be paying taxes in this country and there will be an economic advantage. That must be built into any future tendering processes for major works.

The second part of the motion refers to the provision of greater levels of social protection, including protection in the event of illness, for those who are self-employed and, in particular, for those whose businesses fail, leading to a collapse in income. I am a long-time campaigner for the self-employed who have no rights in the event of their becoming sick or unemployed. When I ran for the Seanad election it was the No. 1 item on my campaign card. When I ran in the previous election the same was the case. I have worked in that field for 28 years so I can understand the problems such people have. Following consultation between Labour Party Senators and the Minister for Social Protection, Deputy Joan Burton, we hope to find a resolution to the matter as soon as possible by means of a voluntary contribution that will entitle the self-employed to get disability benefit in the event of illness rather than the current means-tested payment for which they would probably not qualify.

I wish to refer to the recommendations of the advisory group on small businesses on commercial rates. The group said that although rates are generally a relatively small proportion of business costs for many businesses, they can be particularly burdensome for some enterprises. That is the truth. I have called on numerous occasions in this House for a national review of commercial rates. Some time ago a pilot scheme was carried out in three local authority areas in Dublin. The outcome was a 35% reduction in rates for those local authority areas. The Valuation Office says because it only has 12 or 14 staff it does not have the resources to address the issue but there is talk of outsourcing valuations. That should be considered in order that the matter will be dealt with soon.

Ridiculous situations arise across the country. I am from County Roscommon. Monksland is a large area in the county on the River Shannon adjacent to Athlone. The rate per square foot in the thriving town of Athlone is €52.27 and the rate in Monksland across the River Shannon is €74.34. There is a difference of €22. Why would anyone consider setting up a business in Monksland with such a rate? This is not something local authorities can deal with as they can reduce their rates by 1% or 2% if they can find savings for the benefit of small businesses but they cannot find savings of 22% or up to 35%. The solution must be found at Government level by putting a national review in place. The advisory group on small business also said that potential savings of €511 million could be found through local government efficiencies. I would ask the Minister of State from where those efficiencies are to come and whether they will be passed on to the ratepayers, because it is vital that they are. The Minister of State, Deputy Perry, and I have spoken about rates and are agreed on one matter, that we should possibly consider a two-tier rates system - one for the blue-chip companies and one for smaller businesses. As I have stated repeatedly, I cannot see the logic in a small business, which employs one or two persons and has a rates bill of €4,000 or €5,000 that it simply cannot pay, closing and putting the two employees on the dole at a cost of €42,000. There is no logic at all in that. There must be a better way. If the local authority were to forgo the rates, there would still be a saving of €38,000 to the taxpayer.

I have always stated, as I did a year and a half ago in Roscommon when Mr. Mark Fielding was present, that we should also look at the social welfare budget to create jobs rather than keep claimants at home. If, as I stated, it costs €21,000 a year to keep a person on the dole and we wanted to create 100,000 jobs by offering €10,000 of that €21,000 to an employer to employ somebody, we would saving €1.1 billion per year and create 100,000 jobs from which employees would pay tax, charges, etc.

On tourism and the hotel sector, many hotels are struggling. There was one in my home town of Ballaghadereen employing 40, but as I told the Minister of State previously, it had a rates bill of €40,000 a year and a water rates bill of €30,000. It was not able to pay that, as a result of which it closed and 40 people went on the dole at a cost to the taxpayer of €840,000. Why is there not an agency to deal with this to save money? If that rates bill could have been forgone, we would still save €750,000 to the taxpayer.

NAMA is concentrating far too much on the UK market, and I have said as much in the House previously. From speaking to auctioneers and estate agents, I am aware that they have been in contact with NAMA to buy properties at a modest price for those who are willing to set up in business and NAMA is dragging its heels on this. Many months later, NAMA has not signed on the dotted line. There are people waiting to set up business and we are not doing anything about it as a Government.

I agree with Senator Byrne regarding the self-employed, but it was Fianna Fáil that put the self-employed on the dole. When that party had an opportunity over recent years, it never looked after them once. Now the Senator is blaming us for the mess his party created.