Damien English (Meath West, Fine Gael) | Oireachtas source

I will check it. I am telling the Senator what it is about and I will check it with the Minister.

Senator Higgins asked about the EU recovery plan and what it can be used for. She made a good point about using that funding for public investment and public services. A major part of the response following Covid-19 will be building public capacity and investing in our public services, our public response and our public capital spend as well. It is different from what happened following the previous crash.We had the austerity versus stimulus conversation two weeks ago. We were not in a position after the previous crash to invest in capital. No one would give us money; we could not get it. Thankfully, we are now committed to spending more than €150 billion on capital and we will increase that figure. There is plenty of capacity for public investment, both capital and current, and also for investing in our ability to respond as a country to health scenarios and so on. The Senator is right to flag that but it is well flagged in the programme for Government that it is also our intention. Senator Keogan has put it in clearer, more straightforward terms but we are on the same page. We need to make sure it happens and businesses have access to different types of funding. This could be our own funding or, as the Senator said, maybe we could draw down some funding from the EU recovery plan. I am sure that is being looked at. The plan was signed off on by the European Council this week but it still has to go through the European Parliament. We have to ensure that happens as well. I have no doubt Irish MEPs will have a say in that as well. That European funding will not be used for the credit guarantee scheme but in other areas. I have no doubt Ireland will be able to benefit from it. We worked hard on that scheme to ensure there was the right balance of grants versus other funding, although I know people have different concerns on that.

I think I have covered nearly everything. Senator Wall mentioned the living wage and youth unemployment. There are strong commitments to a living wage in the programme for Government. It is a matter of setting out how we get there. I will be honest and say that these initial efforts were to aimed at providing a quick response to all the businesses. When everything has stabilised, we can focus on the plan to have a living wage in place in the lifetime of the Government. That is what we are trying to do and there are different ways of achieving that. A motion on this was tabled in the Dáil last week and there are different versions of the living wage. The minimum wage system has worked well so we might see how we can use that scheme or other schemes. Some people have called for a task force on the issue. While that is a conversation we need to have, it is not one for the next couple of weeks. We want to get the July stimulus plan out and get businesses reopened, stabilised and growing again. We want to get people back to work and that is happening, thankfully, every week but we need to built on that. That conversation is definitely one to be had.

Senator Wall correctly raised youth unemployment and I fully support him on the issue. There will be some initial responses today and we will build on that. I totally agree with the Senator that young people have to be protected during this crisis. They are a very vulnerable cohort in employment terms. They are highly skilled and motivated and we need to work with them to ensure they are either in education or in a job. That could involve a form of youth guarantee or whatever it takes. There are different ways of doing this but we must do it. The Taoiseach, the Tánaiste and others are very much committed to that and the Minister for Social Protection and Employment Affairs, Deputy Humphreys, and Minister with responsibility for Higher Education, Deputy Harris, will probably lead the charge on it.

Senator Wall mentioned apprenticeships. I firmly believe in education on the job. We have much to gain from the further education and training sector. The conversation is too often focused only on higher education. That is a mistake that many countries in Europe have made. The further education and training sector has much to offer and it certainly offers a very affordable way to access education. Many careers are best served by on-the-job training as opposed to a higher education course in college. The blend provided in further education is correct. We should look at what the job and career need. The conversation too often focuses around a person and what they want or need whereas it should be what is best for the particular career. People often forget that some very high profile people like Alex Ferguson were apprentices. There are loads of different ways to look at this. In fairness to the Labour Party, it has done considerable work on this. Five or six years ago, I worked with the former Minister for Education and Skills, Ms Jan O'Sullivan, on changing the whole story as regards apprenticeships. At that time, there were fewer than 29 routes to apprenticeships. That figure is now well over 60 and there is a commitment to go much further. More than 4,000 new apprentices have signed up this year, which is a very positive story. We need to build on that and ensure those apprentices are protected during the Covid pandemic. There are strong commitments on apprenticeships and funding has been allocated. The Senator was right to identify this issue. Apprenticeships are available for everybody, not only young people, although there is a particular focus on young people. We need to have a plan of action so young people know where they are going and how they can develop careers across various sectors.

Senator Higgins spoke about building resilience, which is what we are trying to do with these supports. While I recognise that some people want grants rather than loans, loans give businesses a bit of space. If businesses get a low-cost loan over six years, they will have time to reaffirm what they are doing and respond, adapt and grow.

Irish SMEs have shown great resilience over the years. We need to build on that. The Department also wants to encourage those same SMEs to think bigger and to think of growth plans. That is why we invest a lot in research and development, and innovation. We want businesses, especially in retail, to trade more online. A massive amount of money is being spent daily, or even hourly, on retail abroad and that money is leaving the country.There is no reason our retail sector cannot take part in that because we are a very successful exporting nation. Even in retail, there are many opportunities to win some of the market share of other countries, as well as holding on to some of our own market share. The Senator is right about recovery, resilience, and investing in business. That is what we will do and keep doing.

I will come back to the banks in a moment but Senator Gavan asked about the 90:10 guarantee ratio. We think a 80:20 ratio is the right place to land, although different countries are doing different things. I referred to Denmark, Austria, and a few others but I acknowledge that France has a 90:10 ratio. We think we are in the right space here, but we will monitor it. The Strategic Banking Corporation of Ireland, SBCI, is there and we are working with the banks.

Senator Murphy asked about the credit unions. The initial conversation around this scheme was with the three main pillar banks because they cater for 90% of the market. However, more than 70% of this guarantee will be made available in an open call to all lending institutions. Credit unions and other sectors can compete for that and I hope they do. As a few Senators, including Senator Buttimer, mentioned, credit unions have a lot of money available, which they want to either loan or invest. There is great potential to tap much more into the credit union movement. From a housing point of view, there is a lot of capacity for credit unions to invest in housing for people who are ageing and to get into that market, so we look forward to that. They can access this guarantee, as it is for them as well.

Senator Kyne noted the significance of microbusinesses and SMEs in Galway. That importance is common to all our areas because that is what we are trying to achieve. He requested that the Department link in with all businesses about this guarantee fund and the other supports we have. That is something we try to do regularly and we use a network of our various agencies to do so. However, it is an ongoing battle. For example, many companies which are entitled to the restart grant still have not claimed it. We have to constantly reach out to companies and we do so through all Departments and through Government messaging. We all have a role in that because these businesses are coming to us every day of the week and that is our job as public representatives. We get the message out through our councillor network to try to reach them, but we will get it out directly through the Department as well.

Senator Buttimer raised play centres, leisure centres, activity centres, cafés and all those different sectors, which often fall between two stools. I am committed to working with those sectors to ensure they get the supports they need because it is a difficult space. Some businesses will find it very hard to get their customers back in the door again and they will need us to help and protect them through that. They have a great organisation themselves, namely, Play Activity and Leisure Ireland, PALI, which is doing good work. We need to be able to work with them because there are issues in respect of restart grants, wage subsidies, insurance costs and so on. We believe the restart grant is a decent amount of money to help with some of those initial fixed costs and we will try to build on that with rates and so on as we go along.

The deferred tax credit for banks was raised and is the subject of some amendments. However, it is not overly relevant in this piece because the profits are to be passed on to the SMEs. This scheme is not for the banks to make a profit. I want to be clear on that. The deferred tax assets scheme, which Senator Higgins and others raised, is not really impacted by the Covid-19 credit guarantee scheme because the benefits of this guarantee are going to the enterprises and not the finance provider, in line with the requirements of the European Commission's temporary framework for state aid. That is what this is about. It is about supports for businesses, not banks. Senator Higgins has tabled an amendment on this issue so we will touch on it in that discussion as well. The loss relief for corporation tax is a long-standing feature of the Irish corporate tax system. It allows for losses incurred in the cost of business to be accounted for when calculating the business's tax liabilities and this mechanism is a standard feature of corporation tax systems in all OECD countries. We have it here. Senator Higgins raises this issue quite a lot when it comes to banks and we can discuss it again. Banks can bring forward that trading loss for a number of years. It is not really a conversation for this Bill because it is a matter for the Department of Finance but the benefits of this credit guarantee scheme go to businesses, not to banks. The Senator's issue is-----