Jimmy Harte (Labour)

I welcome the Minister of State, Deputy John Perry, as well as the representatives of the business community in the Visitors Gallery, particularly those from Letterkenny Chamber of Commerce who have made their way here today from County Donegal. Anyone who knows anything about business in the Border area will know there are extra difficulties being encountered as a result of the sterling-euro exchange rate and the differences in VAT rates, although the difference in the exchange rate is the bigger issue, as I know from talking to people in County Donegal.

The issue of VAT has been raised in the debate. A differential of 1% or 2% in the rate of VAT will not make or break a business, given the difficulties in getting businesses up and running. Like Senator Tony Mulcahy, I have been in business for 27 years, since I was in my early 20s. The 1980s were difficult, with interest rates running at 18% or 19%, whereas they are 2% or 3% today. Nonetheless, running a business is more difficult today.

SMEs are the ones which will get the country back on its feet again. They are and have been the backbone of the economy. A small, family-run business will be the last to give up; it will fight to the very end. That is the tradition in Ireland. People who set up their own business do not do it by chance but through determination and the business is generally passed on through the generations. The small business community has kept the country going and is employing hundreds of thousands of people.

I do not have to convince the people in the Visitors Gallery of how hard they work from Monday morning through to Sunday night. Those who work a five-day week do not appreciate their jobs. When a person is self-employed, it is a seven-day week. Many spend their time complaining about the Government and the current situation, but those involved in business do not have time to do this. They come to work in the morning and might have one minute in which to complain before having to get on with their business and getting through the day.

In recent years people often budgeted on an annual basis, but because of the way the economy has gone, many businesses are now budgeting on a monthly basis, which shows how difficult is the economic environment. Anyone involved in a small business knows he or she just has to get on with it as he or she cannot depend on somebody else to look after it.

Help from the Government is needed. I served as a member of Donegal County Council for 11 years and of Letterkenny Town Council for 17 years and every year the rates issue was topical. I have always said that in County Donegal the rates base is too small and that the pressure is on the business community which is suffering more than it did in the past. The rates base has to be extended. While I am open to correction, I understand 39% of all local government funding comes from commercial rates. This cannot be sustained.

In recent months I have heard speakers with a political agenda say, "Do not pay your household tax," "Let somebody else pay it," "Europe will pay it," or "I do not want to pay it." However, a small shop employing, say, two family members and a couple of others might be paying €3,000 or €4,000 just to keep the door open. At the same time, a person living next door in a private house worth more than the business might be refusing to pay the €100 household charge. The public must realise that if the small business community continues to suffers, jobs will not be available for their children, friends and neighbours.

Like most people, I have no difficulty in paying the €100 household charge. However, the funds must be spread throughout the country, as the business community is getting smaller. I assume, when rates were formulated 150 years ago, it was necessary to have a business premises, as people did not have laptops and cars then. Today there are many who are doing well in business but who do not contribute to the community through rates because they do not have a building. We must re-evaluate the rates system.

There are other anomalies which the Minister of State might address. I have experienced the following. When a town council or county council brings forward a motion to grant a reduction in rates for new businesses, the law does not allow this to happen. The county enterprise boards, of one of which I was a member for several years, can give grants to small businesses provided they do not interfere with others conducting the same business on the same street. The county councils should be able to do the same after examining how the normal market operates. If a building is left empty, the council concerned should encourage people to take it over. In many cases, in which rates are owed on a building, the next tenant is liable for them, which is unfair. If the system was run in a businesslike way by people such as those in the Visitors Gallery, many of these businesses would be operating again. If councils gave a 50% or even a 10% reduction, these properties would be opened again and there would be activity on the street. There is nothing worse than driving through a town and seeing "To Let" signs, boarded-up windows and paintings on windows to hide the fact that a building has been closed. We should examine anomalies such as these in order that a town council could, in certain designated areas of a town, give a rates reduction to new businesses, provided they are not interfering with a similar business in the town. There are many who want to get involved in business and as has been said, there are some 400,000 unemployed. Many people just need an incentive and an extra push from the Government to get involved. When that happens, more jobs are created and the cash starts to flow.

It will be the small business community that will bring the country out of recession, as it has done in the past. I wish those involved good luck in the future and ask the Minister of State to act on my requests.