Peter Burke (Longford-Westmeath, Fine Gael) | Oireachtas source

I thank the Acting Chairperson. We were before our time in having to negotiate the first Fianna Fáil-Fine Gael coalition pact in the local chambers back in 2009. That paved the way for the future, indeed. I appreciate the good wishes.

I thank everyone for the opportunity to address this very important issue. I fully recognise that businesses are concerned about the rising costs they have faced in recent years. The Government has introduced or progressed several initiatives to improve working conditions in Ireland over recent years, including but not limited to the transition to a living wage and the roll-out of statutory sick pay. These changes were signalled in advance and were typically subject to public consultation prior to being adopted. These changes will be implemented incrementally over a number of years. My Department, in collaboration with the Department of Social Protection, has assessed the cumulative affect of these changes in a report published last month.

A range of measures are currently being brought forward to assist businesses in adjusting to these increased costs as well as more generally to improve the cost of competitiveness of firms, including making up to €15 million available to local enterprise offices to enable a top-up payment of up to €3,000 in energy efficiency grants for businesses in the hospitality and retail sectors, bringing the grant up to €8,000, and I am pleased to inform Senators that this measure is live as of Monday of this week; preparation of an options paper on the application of the lower 8.8% rate of employer PRSI contributions and the National Training Fund; a range of measures to reduce red tape and the administrative burden on businesses, including enhancing the small and medium enterprises, SME, test; and accelerating the roll-out of a fully functioning national enterprise hub, with staff available to provide immediate advice and support to vulnerable firms.

Separately, as part of budget 2024, the Government signed off on a package of €257 million for the increased cost of business grant. This grant has been set up in a way that makes it easily accessible to smaller businesses which may have had difficulties availing of previous schemes. Local authorities have written to businesses directly, providing them with a customer ID and pin to access the increased cost of business portal. I encourage businesses to register as soon as possible as they receive their letters. The closing date for registration is 1 May 2024. The portal opened on Thursday, 14 March, and as of 16 April approximately 34,000 businesses have registered for the scheme. Authorities will begin paying out this grant over the coming weeks.

Businesses must verify their eligibility through the online portal, showing that the business is commercially trading, operating directly within a commercially rateable premises and intends to trade for a three-month period following registration; the business has provided confirmation of its bank details; the business is rates-compliant, including those businesses with a phased payment arrangement in place; and the business is tax-compliant, providing a valid tax registration number. The grant provided will be for qualifying businesses with a 2023 commercial rates bill of less than €10,000. The increased costs of business grant will be paid at a rate of 50% of the business's commercial rates bill for 2023. For qualifying businesses with a 2023 commercial rates bill between €10,000 and €30,000, the increased cost of business grant will be €5,000. Businesses with a 2023 commercial rates bill greater than €30,000 are currently not eligible.

I, with my colleagues, have consulted businesses that have registered for the increased cost of business grant, and the feedback we received is that the registration process is very straightforward and only takes a few minutes. Businesses are currently concerned after previous experience that this would be an onerous task. Rest assured, it will not be.

It is also important to note that the Government has taken substantial action in supporting enterprises in recent years. A variety of supports have been made available to businesses, including through the temporary business energy support scheme, the business user support scheme for kerosene, and the Ukraine enterprise support scheme. In addition, many rateable premises will have benefited from a commercial rates waiver that was in place from 2020 to the first quarter of 2022.

Senators will also be aware of the ongoing excellent advice and support by the local enterprise offices, LEOs, as the first-stop shop for anyone looking to start or to grow a business as well as general business advice. Along with the financial supports available, they offer a suite of mentoring and training support supplemented with consultancy programmes that give the vital support required by small businesses at key stages of their development.

By availing of schemes such as the energy efficiency grant or the trading online voucher, small businesses can ensure their future resilience and competitiveness by upgrading their energy systems or opening up new markets online. I will shortly publish a new LEO policy statement which will clearly outline the role of the LEOs in contributing to the priorities of the White Paper on Enterprise. The extension of the 9% VAT rate on gas and electricity to the end of October 2024 will alleviate some of the pressures faced by businesses as a result of rising energy prices. It must also be noted that the reduced rate was originally due to expire on 31 October 2023.

In addition, budget 2024 introduced a number of measures which will be beneficial to businesses, including an increased VAT registration threshold of up to €40,000, up from €37,500, for services and €80,000, up from €75,000, for goods as well as an increase in the rate of research and development tax credit from 25% to 30% on qualifying expenditure on research and development from 1 January 2024. This will allow large multinational enterprises subject to a new minimum tax to claim a credit at the same rate they previously availed of and will allow SMEs to avail of the full benefit of the rate increase. The first year payment threshold of the research and development tax credit will also increase from €25,000 to €50,000 which will alleviate concerns for SMEs engaging in research and development.

A new reduced rate of capital gains tax of 16% will apply to angel investors in innovative start-up SME when they dispose of the qualifying investment for gains of up to twice the value of their investment up to €3 million. In addition, enhancements to the key employee engagement programme and the enterprise incentive investment scheme, EIIS, are beneficial for businesses. Additionally, I must highlight the effective role of the tax debt warehousing scheme in providing vital support to businesses during the pandemic and subsequent cost-of-living difficulties. In early February, the Minister, Deputy Michael McGrath, announced his intention to reduce to 0% the interest rate applying to warehouse debt.

While I recognise the difficulties that have been faced by businesses in recent years, I am sure Senators will agree that the changes to working conditions will have a positive impact for workers. Nonetheless, business concerns are recognised in the recommendations put forward in the working conditions report will be published on 5 March.