Lorraine Higgins (Labour)

I welcome the Minister of State and the members of the business community who are in the Chamber for this debate on the proposed introduction of supports for small businesses and the self-employed. I thank the Minister of State for his responses to the issues raised by colleagues. I intend to refer to some of the specific challenges facing the business community.

Prior to my nomination to the Seanad I was self-employed all of my life, as are all members of my family. As such, I am very familiar with the particular challenges facing the many business people who are striving hard to keep their boats afloat. I have experienced some of those difficulties at first hand. In particular, I highlight the utterly disincentivising situation that exists in Ireland. Now, more than ever, we need people with an entrepreneurial spark and verve to feel secure in following their business dream. To that end, the current situation whereby one is prejudiced in terms of acquiring social protection following the collapse of a business must come to an end. How can we realistically encourage people to develop a business idea and seek out funding for that purpose if there is no safety net should things go wrong? Not only is this policy misguided, it is unacceptable in that it is utterly prejudicial to those concerned. I urge the Minister of State to liaise with the Minister for Social Protection in order to address this unfortunate anomaly in Irish law so that entrepreneurs in this State can set about creating jobs without fear of confronting a uniquely Irish problem should their business plans go awry.

I urge the Minister of State to prioritise the implementation of the European prompt payments directive which will inevitably be transposed into Irish law in the coming years. This directive would give many businesses the legislative framework and protection required so that Ireland can shift decisively to a culture of prompt payment. It will seek to reverse the trend of late payment by penalising debtors who delay via the introduction of interest charges and fixed penalties for those who fail to comply without further notice. The directive must not be limited in terms of application. It must apply to all businesses, including State bodies and multinationals that are in receipt of State supports. With 1,900 corporate entities being wound up in the State last year - which does not take into consideration partnerships and sole traders - this legislation is essential in encouraging greater confidence among business people and in affording protection to badly stung creditors who are operating in a very difficult marketplace.

An issue that has come to the fore in Irish life in recent times is that of access to credit and finance facilities. If businesses are to buck the unfortunate trend of years past, it is essential that this issue be addressed. While I welcome the budget announcement by the Minister for Finance, Deputy Michael Noonan, of a target of €3.5 billion in lending by Bank of Ireland and AIB to the SME sector, we must police that requirement more radically. I understand these banks are engaging in a horrible practice of withdrawing overdrafts and transforming them into term loans. This activity is masqueraded as new lending for the purposes of satisfying the requirements set down by the Minister for Finance. We must focus more radically on this behaviour and ensure we take into consideration the draw-down figures as opposed to loan approvals.