David Cullinane (Sinn Fein)

I move amendment No. 1:

In page 8, subsection (1), lines 33 and 34, to delete all words from and including "2 per cent" in line 33 down to and including "agreement." in line 34 and substitute the following:

"the administration costs of the loan to which the agreement relates and not less than 0.8 per cent of the principal of the loan.".

I welcome the Minister of State. On Second Stage my party gave the Bill a cautious welcome, as we must do whatever we can to help struggling small to medium-sized enterprises, SMEs, and support entrepreneurs and those with job creation ideas. Six businesses close everyday, which is far more than the number which open. Any help that can be given to new and existing enterprises to create jobs and support local economies will receive our backing.

This debate is occurring in the context of there being 440,000 people out of work. Not only will the Bill benefit businesses, it will also help those who will be employed on the back of this initiative. In our view, it does not go far enough. Sinn Féin would like a great deal more to be done in this area. A number of Senators, including the Leader, referred on the Order of Business this morning to the fact that the south east has been disproportionately hit in terms of job losses and a lack of supports for SMEs and business generally from enterprise agencies, including visits by them to the region, all of which have resulted in an almost 20% level of unemployment in the area. I am sure the Minister of State would agree that level of unemployment in any region is bad for its local economy.

I welcome that access to funds will be limited to small businesses which employ fewer than 250 employees. This makes perfect sense. I read the transcript of the Committee Stage debate on the Bill. While I am not a member of that committee, I know from reading the transcript that some sensible arguments were put forward on Committee Stage, including that bigger enterprises would, if included, soak up much of the money. That this measure is targeted at SMEs is in Sinn Féin's view a positive.

Sinn Féin also stated on Second Stage that the 2% charge on the borrower, as provided for in section 8, has the potential to undermine many of the other positive aspects of the Bill. We are seeking to have that charge removed but only in the context of what is possible. The Minister for Jobs, Enterprise and Innovation, Deputy Bruton, said on Committee Stage that a charge of 0.8% was necessary to ensure that it was within the bounds of State funding. We accept that. If that is the minimum percentage that needs to be set, we have no difficulty with it. Sinn Féin's amendment is in keeping with the Minister's statement on Committee Stage. We want to keep the charge on small businesses to the bare minimum. Any charge that would be seen as disproportionate or making it difficult for business to access the credit would not achieve what we are hoping the fund will achieve.

There is no legal imperative on the Government to impose a 2% charge. From where did that figure come and what criteria was used to determine it? If 0.8% is the minimum, why was it not set at that amount? Is 2% just an arbitrary figure? Perhaps the Minister of State will explain from where the 2% figure came. This percentage was chosen by the Government and it needs to spell out the reason for it. Sinn Féin believes that percentage is over and above necessary administration costs. We accept that there are administrative costs associated with the overall running of this fund. However, we believe this matter can be properly dealt with in the context of the 0.8% charge which we are proposing.

In essence, Sinn Féin believes that the 2% is too high. Unless the Minister can provide evidence to the contrary, we do not see any logic in setting it at that level. As I stated earlier, it is an arbitrary figure, one that will be a cost on small businesses, many of which are finding it difficult to survive. I accept what the Minister said on Second and Committee Stages, namely, that we need to ensure that this fund is targeted at viable businesses. That is crucially important. Perhaps it is one of the reasons the Minister is offering up the 2% charge. However, even viable businesses starting out need support. We must do all we can to keep costs down to a minimum. A Member from the Government side of this House called yesterday for a more flexible approach to local authority rates for businesses. It is important a single rate is not set for businesses, with no wriggle room for local authorities to show flexibility, in particular for those businesses that are suffering. Members of the Minister of State's party have previously been vocal on the need for a more flexible position in regard to rates. I ask that the Minister follow the logic of that in respect of this Bill and the amendment which are proposing to it which seeks a reduction of the charge from 2% to 0.8%.

I await the Minister of State's response. However, if he is not minded to accept the amendments, Sinn Féin will be forced to push them to a vote.