Mary White (Fianna Fail)

Before I discuss the Bill, I welcome the announcement on Tuesday of the establishment by Enterprise Ireland of a €250,000 competitive feasibility fund aimed at stimulating high potential business start-ups by female entrepreneurs. The fund will be open for applications from Tuesday, 17 July 2012 until 4 September 2012. This initiative is part of a drive by Enterprise Ireland to boost the number of innovative, export-oriented businesses being led and set up by female entrepreneurs. I hope there will be many applications. If Ireland had a similar ratio of female entrepreneurs as Australia does, then it would have an additional 34,000 businesses, an increase of over 15%.

As long as I am in this House, I will never oppose any measure that seeks to relieve the unemployment crisis. Accordingly, I welcome this Bill in principle. That said, I am not sure this measure will have significant impact. I am not saying the measure will not achieve what the Government is setting out. Rather, I am not sure the Government's target is significant. According to the Government, this measure will deliver 7,700 jobs in 5,000 companies over ten years. Some 5,500 of these jobs will be created directly, with the balance of 2,200 being created as an indirect consequence of the scheme. In other words, the fund will deliver one seventh of one job per company per year. What the Minister of States describes as a key part of the action plan for jobs 2012 will deliver one job per company covered by 2019. Does he consider this a satisfactory outcome? Is it not the case that the Microenterprise Loan Fund Bill 2012 is a little too micro in its ambitions?

In the Dáil the Minister stated, "The introduction of the microenterprise loan fund is one of the key commitments that my Department made in order to deliver positive and speedy results for this sector." He actually used the word "speedy". The creation of one job per company in the seven year period to 2019 is his version of speedy. Is he being serious in respect of his estimates in this regard? I would certainly like to be informed of the criteria on which these estimates were based. Was one of them that only a single job would be directly created per company funded? One can only wonder as to whether the Minister is deliberately setting the bar low in order to deflate expectations. In the event that the scheme delivers 1,500 jobs in its first year, will he be claiming that it had succeeded beyond all expectations?

Despite what I have said, the Fianna Fáil Party welcomes the Bill which is long overdue. The document issued when the Government launched it in May 2011 proclaimed:

In line with the commitment in the Programme for Government, a Microfinance Start-Up Fund to provide loans to small businesses is being developed. A workable scheme and optimum delivery mechanisms are now being considered and this work will be brought to fruition for the December Budget.

Six months later the Government announced details of a €100 million microfinance loan fund. It stated the fund would have an impact for 5,000 businesses and be in place in the first quarter of 2012. The scheme should, therefore, have been in operation by the end of March. When the action plan for jobs was launched in February, we were informed that a €100 million microfinance loan scheme would be going live in the immediate future. The summer recess is fast approaching and it is only now that the relevant legislation is being rushed through the Houses.

According to the Small Firms Association, 90% of small businesses are microenterprises. This means that they employ fewer than ten people and implies that there are in the region of 180,000 microenterprises in the country. The Minister and the Government intend, by means of the scheme outlined in the Bill, to assist 5,500, or approximately 3%, of these.

The Bill is rooted in the credit crisis faced by Irish businesses. In order for a company to be eligible for the scheme for which the Bill makes provision, it must, first, have had a request for credit declined by the banks. The Government informs us that, "The Scheme will provide loans ... for commercially viable proposals that do not meet the conventional risk criteria applied by the banks for various reasons, including the absence of collateral." The House recently dealt with the Credit Guarantee Bill and many of the contributions to the debate on it focused on the need for businesses to obtain credit. It is worth restating just how difficult it is for businesses to do this. The most recent report from Mr. John Trethowan of the Credit Review Office outlines the position in clear terms. He stated:

I am ... disappointed that there is not more evidence of support for "enterprise risk taking" on new and increased lending in the banks' current lending policies. This would suggest that their current risk appetite needs to be reassessed in order to support economic and employment recovery.

It should be borne in mind that many companies will not go to the Credit Review Office for fear that they will be punished by the banks if they dare complain that they are not receiving fair treatment.

The assessment of the position on credit issued in June is even more forthright and makes for worrying reading. ISME claims that the banks are hindering recovery, with 54% of credit applications refused by bailed out banks in the past three months. Its survey indicates that 82% of businesses which applied for funding have outlined that the banks are making it more difficult for them to access finance. The survey also claims that 96% of business owners are of the view that the Government had either a negative or no impact on SME lending. It confirms what so many of us know from our dealings with the SME sector, namely, that the banks are not lending. Two days ago ISME published another survey which shows the level of dissatisfaction among over 700 SMEs at the Government's performance in the areas of jobs, banking, costs and dealing with the troika. Commenting on the contents of the survey, Mr. Mark Fielding, CEO of ISME, stated:

[W]hile the electorate was willing to allow the government some time to come to grips with the economic situation, after sixteen months more was expected. The time of promises and announcements about announcements without any concrete action was long gone. The disappointing satisfaction ratings from SME business people was a clear reflection of the mood of the sector and a warning to government that much more needs to be done in the struggle to come out of the crisis. The difficult decisions necessary to restore our competitiveness and recovery must be taken.

At a press conference earlier today the representatives from the troika stated "Ireland's recovery programme remains strong in a challenging environment." That is good news. However, the country's budget deficit remains the largest in the European Union.