Hildegarde Naughton (Fine Gael) | Oireachtas source

I welcome both the Minister and the legislation. We all have experience of dealing in our localities with small businesses which have been endured an extremely tough time in recent years as a result of the downturn in trade and the lack of credit available to facilitate refinancing and development. The new strategic investment fund which will make an initial amount of €500 million available for the SME sector is aimed particularly at small and medium enterprises and will be delivered through existing financial institutions, that is, the banks and other financial entities which qualify for participation. The SBCI is modelled on systems which operate in various other European countries and which have been shown to work successfully, particularly in Germany.
It is clear from the regulatory impact analysis that the proposals contained in the Bill constitute the most suitable vehicle for the delivery of credit to small and medium enterprises. The involvement of the German financial institution, KfW, in the scheme is the positive outcome of negotiations between the Taoiseach and the German Chancellor. The moneys it will provide, in addition to those from the European Investment Bank and the National Pensions Reserve Fund, will ensure the availability of low-cost funding to the SBCI for the next ten years. Fixing low rates for the next ten years will be of huge benefit to those SMEs in receipt of loans and also reduce the risk involved in seeking finance. The ability to lent these moneys, the inclusion of initial capital breaks and longer repayment periods than those currently available are all huge positives. The European Investment Bank has released a statement in which it warmly welcomes the establishment of the SBCI.
I wish to comment on a matter which was reported in last Friday's edition of The Irish Times. It appears that Opposition Members in the Dáil, including, I am surprised to say, Deputy Stephen S. Donnelly who knows more about these matters than any of the others quoted, roundly criticised the legislation in terms of the speed of its passage through the Dáil. The article to which I refer also contained an allegation regarding potential liabilities of €4 billion in State guarantees. Let us be clear about this matter. Since the Government came to office, the Opposition has been shouting for money we did not possess to be invested in various areas of the economy, including that to which the Bill relates. As a result of the excellent fiscal discipline displayed during the past three years, the Government has been able to devise a scheme which will lead to the investment of funds which are sorely needed in the SME sector. I will say this clearly in order that there will be no misunderstanding: the banks and other financial institutions which act as on-lenders have a responsibility to assess the risk in lending the moneys being made available. It is they, not the State, that will carry the risk. After Deputy Stephen S. Donnelly's reported criticism last week, he obviously had a change of heart and produced what can only be described as a litany of praise for the actions of the Government in this matter in an article he wrote for the Sunday Independent. The article did not contain one word about the speed with which the legislation had been passed in the Dáil. However, it did contain an acknowledgement that "Critically, these on-lenders will bear the risk of the loans to the SMEs, minimising the risk to the public money".
I very much welcome the legislation, particularly the contribution it will make to the retention and creation of jobs in the domestic economy. I look forward to its speedy enactment and the provision of much-needed credit for the SME sector.