Garret Ahearn (Fine Gael) | Oireachtas source

I welcome the Minister of State to the Chamber. I also welcome the Bill before the House, which is the largest credit guarantee scheme in the history of the State. It has been brought in on the day we are announcing the largest stimulus package in the history of the State. It certainly shows the Government is recognising the supports that businesses throughout the country need. This is significant because I have spoken to businesses and the chamber of commerce in County Tipperary and what they need are supports such as low cost loans and grants, and recognition of the challenges they have had in recent months. While they are very grateful for measures such as the temporary wage scheme, which has kept an awful lot of people throughout the country employed, the big challenge in the coming months will be restarting businesses and moving into the next phase of Covid-19 from a business perspective.

It is very important to recognise that 80% of this loan is guaranteed by the State and a ratio of 80:20 is a good balance. It would not be right to fully guarantee loans because the banks should carry some of the responsibility. However, it is also very important that the State guarantees a high enough percentage to encourage banks to give a low interest rate so that businesses feel comfortable taking out loans to restart. This is all about restarting businesses and giving them the confidence to get going again after an extremely difficult four or five months.

The credit guarantee scheme is part of the July stimulus package, which is the second of three stages of the pandemic. The number of measures introduced by this Government and the previous Government to support people and businesses since Covid-19 arrived on our shores in February and March is staggering. Approximately 600,000 employees were on the temporary wage subsidy scheme and 66,500 employers registered with Revenue for it. Almost 600,000 people were on the pandemic unemployment payment at its height. This number has almost halved, which is very welcome, and even in the past two weeks we have had a reduction of approximately 200,000 people on the pandemic unemployment payment, which is very encouraging. This means people are going back to work, which is very good. Many loans have been announced, including the €450 million Strategic Banking Corporation of Ireland Covid-19 working capital loan scheme, the €2 billion pandemic stabilisation and recovery fund and the €118 million sustaining enterprise fund. There are also grants and loans, including the €2,500 trading online voucher scheme, which has been extremely popular with businesses and I encourage it to be brought forward even more.There is the €2,500 lean business improvement grant from Enterprise Ireland and IDA Ireland and the €5,000 business financial planning grant from Enterprise Ireland. Then there was a range of different supports from the local enterprise offices, a stay of three months on commercial rates, which I suggest be continued, the €75 million funding package for the reopening of early learning and childcare services and the €50 million support scheme for beef farmers. That sets the context for the measures introduced in recent months to support different sectors. They are almost like a list setting out what a Government would do in five years rather than four months.

We are now moving into the second stage of this process, the third stage being the budget in October. One of the things I often hear from business owners in County Tipperary, who understand the Government has been supportive of them through this time, is that increased grants are needed. The restart grant is currently between €2,000 and €10,000. There is a real need for it to be increased to a much more significant figure and extended to more businesses such as bed and breakfast accommodation and sports clubs. These businesses will take up the grants because these types of grants are needed.

I spoke to a business owner yesterday who was in the unlucky position of having invested a substantial amount in opening a restaurant in a bar. He was ready to open in April and applied for a loan from the bank amounting to approximately 20% of his investment in the business to finish off the premises. He told me he fell into a bracket of people who were unlucky. As he recognised, a large number of grants were available for businesses that are up and running but not for businesses that are about to open. These businesses have to restructure their premises, whether restaurants or pubs, just like any other business would have to but they were not necessarily trading at the time of the Covid-19 outbreak. We should recognise that. The investment in these businesses is small money in the grand scheme of things but it is recognition these businesses have had to go through the same changes as every other business. The credit guarantee scheme, as the business owner in question would recognise, gives him the opportunity to secure a loan at low interest to finish off his own premises, safe in the knowledge that the cost will be much lower than he initially expected. That is encouraging and he was very positive about that.

I was pleased to note in section 3 that small and mid-caps and primary producers have also been included in the credit guarantee scheme, meaning farmers, fishermen and those in the horticultural sector will be covered. As someone who comes from a farming background, I know that farming is the one sector that is well able to take risks and get loans to spend on new machinery or investing in land or produce. It is well able to get loans. The fact farmers have been brought into this scheme is hugely welcome because they invest locally. The scheme is about encouraging people to spend locally and keep businesses up and running. Including the agricultural industry in that means money will come back into local areas, which is welcome. I welcome the Bill.