Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

This scheme will not be available to hotels in difficulty. Hotels will only be eligible where they have a three-year marketing and development plan approved by Fáilte Ireland. The operating or management of hotels, guesthouses, self-catering accommodation or comparable establishments will now qualify under the existing scheme, the employment and investment incentive and seed capital scheme. The hotel sector employs 51,000 individuals. Extension of the incentive to cover investments in this sector will help to sustain these jobs and potentially create additional employment.

Since the downturn in the economy, approximately 100 hotels have been placed in receivership or ceased trading. Many hotels which were potentially profitable were unable to continue trading without some restructuring of their debts. Attracting third-party investments will make it easier to achieve such restructuring. Establishments will only qualify where they are considered to be tourist-traffic undertakings and, as such, will be required to have a three-year development and marketing plan approved by Fáilte Ireland. I will review the measure in two years? time.

The scheme is extended to 31 December 2020. When introduced, the incentive retained the original expiry date for the business expansion scheme of 30 December 2013. The extension of the incentive is subject to state-aid approval by the European Commission. In that regard, it is important that an application for the extension of the incentive be made without delay. As this extension is contingent on EU approval, commencement is subject to ministerial order. I announced the extension at this time to provide certainty to those small and medium-sized enterprises, SMEs, that may avail of the scheme. It will also facilitate the application of the European Commission for state-aid approval and receipt of such approval without any requirement to suspend the incentive.

The employment and investment incentive and seed capital scheme came into operation on 25 November 2011. At this point, I do not have a full year?s statistics available on the impact of the incentive yet. However, an ex-ante economic impact assessment was completed by my officials before the incentive was introduced. The assessment was published on the Department?s website and indicated not only could this incentive be an important source of funding for SMEs but the companies which availed of its predecessor, the business expansion scheme, created significant numbers of jobs.

Given the current constraints on the availability of credit the continuance of the incentive is important for SMEs. We are continuing up to 2020 for industry in general and we are extending it to the tourist facilities for the reasons I have outlined.