Malcolm Byrne (Fianna Fail) | Oireachtas source

Like others, I welcome the Minister. He served very well as Minister of State at the Department of housing and as Minister of State with responsibility for European affairs. I am certain he will bring his own innovative style to this job. I also pay tribute to his predecessor, Deputy Simon Coveney, who regularly attended this House and was certainly willing to engage with Members on issues. We wish him well in the next chapter. I am certain that the Minister, Deputy Burke, will be in the House as often as Deputy Coveney was and will take on board the views that are expressed.

Within Fianna Fáil, we have met regularly with quite a number of small business groups and most recently with RGDATA. With all of these initiatives that we talk about, which are very welcome, such as auto-enrolment and the increase in the minimum wage, businesses are very supportive but the fact they are all coming at once becomes a big challenge. This is one of the concerns that is raised when it comes to all of the additional “red tape” that comes along.

The Minister will notice that of the political parties represented here, it is telling that it is only the Government parties that are present, which says a lot about the commitment to business and, in particular, to supporting small businesses within this country. It is small businesses that are the backbone of our enterprise economy. They are rightly concerned about red tape and I appreciate the initiatives the Minister has about reducing those costs. The Minister will remember that for a small business, the cost is not just the financial cost but also the time and administrative costs. Big companies can have their own HR manager and marketing manager but for a small company, the owner is frequently responsible for HR, marketing, accounts and everything else.

I want to raise a number of issues with the Minister. I certainly share the views of some of my colleagues that we should explore splitting the VAT rate. I realise the very significant costs in this regard and I realise that when, in government, we reduced the 13.5% rate to 9% for a short period, some sectors, in particular the hotel sector, did not pass it on to consumers as we sought to be the case. However, if we can look at a split rate as has been done in other countries, particularly with regard to food because restaurants and the food sector are under a lot of pressure, I think that is worthy of consideration.

For many start-ups and scale-ups, one of the issues that is regularly raised is around access to funding, which in itself becomes a cost. Scale Ireland has raised this on a regular basis. While I appreciate that the Minister mentioned the increased research and development credit and reducing capital gains tax for angel investors, we have to look at ways to further enhance the digitisation of business and support those start-ups and scale-ups to avail of new technology. To put it bluntly, it has to be more than simply LEO grants to set up a website.As we move into an age when technology is influencing and impacting on all our lives, we have to be able to support a more thorough level of investment.

Senator Maria Byrne referred to commercial rates. We are coming up to the bicentenary of the Valuation Act, under King George IV, of 1826, which introduced the commercial rates system in Ireland that remains the basic system of funding local government. About €1 in every €3 that funds local government comes from commercial rates, predominantly from small businesses, contributing about €1.5 billion annually. The Minister will know this from his previous role. It is wrong that a 200-year-old system discriminates against bricks-and-mortar businesses as a way of funding local government. While the increased costs of business grant and so on are welcome and we can have all the reforms we want relating to the commercial rates system, as long as the system continues to penalise bricks-and-mortar businesses relative to online offerings, we will continue to have this problem. I appreciate that reforming local government is a big challenge but the idea that, in the modern world, a specific tax is determined on the basis of a business's floor space is just nuts. If we want to ensure businesses can be competitive, and in particular those businesses on our main streets, we have to ensure they are able to compete against online offerings, which means we cannot penalise them with commercial rates. We need to radically overhaul that model.

This session on reducing the costs of business has replaced the subject that was intended for debate this afternoon, namely, the legislation that would allow for a referendum on the unified patent court system. If we are talking about reducing the costs of business, an inventor or creator will have a very significant cost if, in order to get the patent for an invention, where they cannot get it in Ireland, they have to go through the courts in France, Denmark or the Czech Republic. The unified patent court system would significantly reduce the costs of business and also the administrative burden for any inventors or content creators. It would make life a hell of a lot easier if that were in place, and I am disappointed we are not going ahead with the referendum in June.

The Government, which has been very strong about fighting for small business, should get out there and make the case. This is a pro-European Government. I can certainly speak on behalf of Fianna Fáil and I know the Minister will do so on behalf of his party. The patent court system makes a lot of sense and for inventors and content creators, Ireland's membership of that court would result in significant reductions - in fact, five-figure reductions for the average inventor if they had to patent their invention throughout the European Union. It would be administratively far easier, as the Minister will know, but given this session is specifically about reducing the costs of business, that would have led to a reduction in costs, so I am disappointed with the paper he brought to the Government seeking to prevent it from proceeding with the referendum. I hope he might indicate in his response when it is planned to proceed with it because it is important for those businesses.

I welcome Deputy Burke's appointment and believe he will be an innovative Minister. I know he appreciates and understands it is critical we reduce the costs of small businesses and support them in creating employment and wealth within our communities, and I wish him well in what he does.