Michael Mullins (Fine Gael) | Oireachtas source

I welcome the Minister of State and thank him for his comprehensive speech which comes during European SME week. It is a great opportunity to provide information to businesses and potential start-up organisations on what supports are on offer to small and medium-sized businesses. It is an opportunity to promote entrepreneurship and particularly to encourage young people to consider starting small businesses that will give employment to themselves and possibly one or two others. It is also an opportunity to give recognition to the many fine entrepreneurs who have kept small businesses afloat in very difficult times. The Minister of State has great experience in the small business sector and is doing a fine job in helping to promote small businesses in his job as Minister of State.

The Action Plan for Jobs 2012, which identified 270 actions across 15 Departments and 36 agencies, is making some contribution to make it easier for companies to start up or expand thereby encouraging exports and job creation. Small business is pleased that the Government is in the process of overhauling five employment rights quangos which should be complete in 2013. I welcome the reform of the city and county enterprise boards, involving the local authorities in job creation. The comprehensive legislative programme, with the enactment of the Companies (Amendment) Act and the Competition (Amendment) Act, the Protection of Employees (Temporary Agency Work) Act, the Microenterprise Loan Fund Act and the Credit Guarantee Act, has been a significant contribution in helping small businesses.

The major question of finance has come up again today. We all come across that issue in our constituencies on a daily basis. The recent report of the Credit Review Office, which was mentioned on the Order of Business, certainly tells the full story. Small and in many cases successful businesses are not in a position to get money from banks. I will give one example from my county, Galway. Bill Madden Nursery has been in business since 1833 and is very successful in landscaping, and retail and wholesale nursery. It had reached the end of the road when it sent its application to the Credit Review Office. It could have gone under with a significant loss of jobs. It stated that it found that the people at the Credit Review Office were very helpful, professional and understanding, and gave valuable advice. The outcome of the review gave a new lease of life to the nursery allowed it to keep the jobs in place and continue in business. The review made the company's bank sit up and take its business seriously. The nursery would strongly recommend the process to other businesses that have not done so already. We need to send the message that if people are not happy with what they are hearing from their banks they should approach the Credit Review Office. It is very significant that 100 businesses are still in place employing 8,500 people.

Two small shopkeepers in my town, Ballinasloe, who are under pressure but are keeping legitimate businesses going, told me in the past week that the banks are treating them like criminals, which is not right. In one case a company employing 16 people needed ¤200,000 to keep afloat. It had ¤1 million worth of orders up to Christmas, yet the bank pulled the plug. That is not right and the banking system is not helping the lifeblood of the country - small and medium-sized businesses.

When we sort out our financial situation, other issues will need to be addressed, including the complexity of regulation and licensing in this country. The Minister, Deputy Bruton, gave an undertaking to reduce the level of bureaucracy and red tape by 25% by the end of this year. There is a great deal more to do in this area. We need to put in place a system that makes it easier for people to start up or continue in business.

The sick pay proposals were mentioned. There is great concern among the small and medium-sized enterprise sector in regard to the proposal that they bear the cost of sick pay. I urge the Minister of State to remain in close contact with his Cabinet colleagues on this issue. Another issue of concern for small businesses is that of commercial rates. An overhaul of the rates system is required. I believe that rates should be linked to turnover, ability to pay or profitability. There needs to be some sort of flexibility in this area. A one-size-fits-all situation does not work in the current economic climate. Small businesses expect and need better value for money from local authorities in terms of water and service charges. There is much work to do in this area.

Another issue for small businesses is the difficulties they are experiencing in obtaining payment for services rendered or goods delivered. Many companies are experiencing great difficulties in this regard, despite the legislation in place. Another bone of contention is, as mentioned by Senator Barrett, the issue of unfair competition. The hotel and hospitality industry is finding competing with NAMA properties an issue. This matter also needs to be addressed.

On the black economy, small businesses are under pressure from cash operated businesses, including people drawing social welfare benefits and operating small businesses. Many of these businesses are operating in competition with legitimate businesses that are paying their taxes and charges, which is unfair. There are many illegal activities in this area which also need to be addressed, including the sale of smuggled goods and diesel laundering, with which small shops cannot compete.

Senator Reilly referred to self-employed people whose businesses run into financial difficulty, leaving them unemployed. It is grossly unfair that people who have given stable employment in good times and have helped the State are not helped through difficult periods. The social welfare system needs to be adjusted to take account of this situation. I would ask that the Minister of State take this on board.