Pat Casey (Fianna Fail) | Oireachtas source

I thank Senator Crowe for sharing his time and wish him the best of luck. He opened his doors last night for the fist time in four months, and I opened mine about a month ago. We are living examples. We are both living through this so we have a full understanding of the huge benefit this credit guarantee scheme can bring. I welcome it. It is the largest guarantee scheme in the history of the State and will hopefully facilitate low-cost borrowings through products, overdrafts, term loans and working capital. That is what is required at the moment. I welcome the change in the portfolio cap and the increase in the size of the scheme. The exposure to the State of €1.6 billion is significant. It is 80% of the loan fund and we must remember that when we are dealing with the banks. The State is taking the high risk of 80% here. The last thing businesses want to do at the moment is go further into debt. Any businesses that have been closed down are looking at a reduction of 80% in turnover figures. They are trying to service their existing borrowings out of a reduced income and the last thing they want to do is increase their debt further. Grants and tax incentives help give businesses that extra margin to pay suppliers or employees. That would be the preferred way to go. In business, as we all know, we need working capital. In my industry we get HSE, Fáilte Ireland and fire reports every year saying that work needs to be done. This could be targeted towards such funds, and the small working capital required could be repaid over a six-year period although we would prefer if we did not have to incur further debt because it questions our viability.

The Minister of State mentioned the banks. This is not about the banks but they are a key actor in this and they have to deliver as well. I do not think they have delivered through the credit guarantee scheme since it was initiated. There are some fundamental problems there. The Central Bank stated yesterday that while almost €160 million was applied for through that scheme, less than €5 million has been approved, and the working capital scheme is similar. All the other schemes, which actually help the bottom line of businesses to survive, have been oversubscribed.The timeframe for this is the end of December. Small and medium sized business will put together a business plan, get it to a financial institution, receive a negative outcome and go through an appeals process, which is the same process as that of the original application, with the same people making the decision. There is a need for some independence in the process in order that those in the SME sector can feel it has been fair and equitable. Some of us have chequered histories with the banks and we need to move on from this because some people have the potential to be very successful and they need to be treated in a fair and equitable manner. It is in everyone's interest that this works. There is no point in the Government backing a scheme to 80% and not getting the results it and the SME sector need if the sector is to survive. I have other suggestions but I might speak on them on Committee Stage.