Denis O'Donovan (Fianna Fail)
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I welcome the Minister of State to the House.

Kathryn Reilly (Sinn Fein)
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There is a jobs crisis in our community which can be seen every day on the streets, standing on dole queues, and getting on planes saying goodbye to their native land. Our people demand to be brought back to work and in order to meet this demand we need investment proportionate to the crisis we are facing. We need to invest in our economy to deliver employment and increase competitiveness and growth. We need to stop spending billions of euro bailing out banks and servicing unsustainable debt. Investment must increase and we must increase the money we are making available to the economy. This jobs initiative has had to be revenue neutral and is on a scale that cannot make an impact and is therefore a lost opportunity of sorts. We need a jobs stimulus that will put people back to work and inject growth back into the economy. We need to take the big decisions to invest in the State's infrastructure and people. To date we have been following irrational strategies of austerity and bailing out insolvent banks. That has continually limited our options and landed us in our bailout - it has landed Greece in its second one. We need to start discussing strategies that open up options to free us from the bailout trap in which we find ourselves.

It will take a number of complementary steps for employment, growth and competitiveness. One step is labour activation. Only €29 million of the jobs initiative fund is allocated to jobs activation measures, which means that long-term unemployed people will essentially receive little benefit from the initiative. The Government needs to move swiftly to address a situation where for the first time in our history more than half of those who are unemployed are long-term unemployed. Recent figures from the British Department for Work and Pensions show that the number of Irish people moving to live in Britain last year increased by 25% to 13,920. The overwhelming majority of these people are in the 18 to 34 cohort. Young, educated and skilled people are leaving the State in their droves. While we welcome aspects of the Government's jobs initiative, it falls short of what is required to create jobs. We are finding ourselves falling back on the safety valve of emigration to pay for the economic shortcomings of the past.

The jobs initiative contains much less than what we were promised and what is required. Both Fine Gael and the Labour Party need to make good on the faith invested in them by the electorate and need to deliver on their election commitments. They need to stem the tide of emigration that is depriving us of so many talented young people and they need to get over 400,000 people off the live register into employment. The people are looking to Members of the Oireachtas for hope but we are hearing only platitudes.

Maurice Cummins (Fine Gael)
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I welcome the Minister of State, Deputy Perry, to the House. Job creation is central to Ireland's economic recovery. The programme for Government has job creation at its core. Small businesses are the backbone of our economy, as we have heard on many occasions. There are currently some 250,000 small businesses, employing approximately 700,000 workers. The appointment of Deputy Perry as Minister of State with specific responsibility for small business is a clear signal to the business community that small businesses are and will continue to be central to economic recovery. This is a very positive step on the Government's part.

Governments do not create jobs; entrepreneurs and risk-takers do and it is the businesspeople and exporters throughout the country who create wealth. Governments, however, can, through their decisions, have a positive influence on the environment in which wealth and job creators operate. The current Government is working hard to find ways to help, and not hinder, the efforts of those businesspeople and workers who will lift our economy out of the gloom.

The foundation stones that made our economy strong nearly two decades ago were controlled costs, a flexible and well-trained workforce, innovative new products and services, and access to export markets. Today we need to focus on getting new lines of credit flowing, reducing business costs and supporting new technology and innovation. The Government's jobs initiative addresses all these issues and more. It represents a very positive intervention to support entrepreneurs and businesspeople to create vitally needed jobs and rebuild our economy.

One of the key factors that impacts upon the viability of small businesses and their sector's ability to create jobs is access to credit. The Government's plans to restructure and recapitalise the banking system comprise the principal response to this challenge. These plans are designed to secure an adequate flow of credit into the economy to support economic recovery, even as the banking system is downsized. The banking system must provide substantial new lending to the economy. The business plan submitted by the pillar banks to provide over €30 billion in new lending over the next three years across core business areas is very important. Up to €20 billion of this sum will go to small and medium-sized business.

The financial authorities will be rigorously monitoring the banks' activities to ensure credit is available for borrowers who meet reasonable credit standard requirements. It is proposed that a partial loan guarantee scheme will be in operation by the autumn. This measure will be of particular help to the innovative companies we are trying to encourage as part of our growth strategy. For every €400 million guaranteed by the State, an additional 4,500 companies can obtain further credit that will, in turn, create over 8,000 jobs. A micro-finance fund will provide funding for small loans for start-up companies. Many start-up companies lack the small amounts of finance that can make the difference between success and failure. The commitment on a micro-finance fund is the Government's contribution to filling the enterprise finance gap in the market.

From 1 July next, all Government bodies, excluding commercial and semi-State bodies, will be required to pay suppliers within 15 days of receipt of a valid invoice. Given that the public sector enters contracts with suppliers worth €15 billion each year, the importance of such a policy for all companies that do business with the State is very clear. The Government is committed to keeping all costs that have an impact on business as low as possible to enable them to benefit fully from the stimulus provided by the jobs initiative. Work in this area is ongoing across all Departments.

One way to help job creation and improve labour cost competitiveness is to ease the cost of taking on new employees. Accordingly, in line with the commitment given in the programme for Government, there will be a halving of the lower rate of PRSI until the end of 2013 on jobs that pay up to €356 per week. This measure will take effect from 1 July next and will reduce employers' costs by 4%, which will offset the restoration of the national minimum wage committed to in the programme for Government. The existing employer job PRSI incentive scheme will remain in place until the end of the year so enterprises and businesses that have planned to take on staff under the scheme in the qualifying period may continue to do so.

The loss of competitiveness in the economy during the boom years, coupled with the global economic downturn, has had a profound impact on the bottom line for many Irish companies. This has led to a drastic knock-on effect for employment, with many employers having to lay off staff and reduce hours for those remaining. Addressing this loss of competitiveness has been one of the Government's top priorities since taking office. There have been recent improvements, for example, reductions in electricity and gas prices for businesses and the reduction and freezing of local authority rates. The cost to business of water services compares favourably with that of our main trading partners. The cost of broadband services compares favourably with the EU average.

The changes the Government has announced regarding the research and development tax credit will make Ireland a more competitive location for research and development activities. Thus, it will have a substantial impact on job creation in this vital sector. This revenue-neutral change will allow companies to choose whether to account for the credit against corporation tax or against the cost of employing researchers, and would greatly improve Ireland's attractiveness to multinational companies when comparing costs with those in alternative locations.

Other areas of the jobs initiative worthy of mention include the making available of an additional 20,900 places in specific education and skills training courses, including the back-to-education innovation places, post-leaving certificate courses, the third level Springboard programme and the new national internship scheme, which the Minister for Social Protection, Deputy Burton, will be discussing in this House at a later stage. Approximately 1,000 jobs will be created through the rehabilitation of the local and national roads along with the implementation of smarter travel and management systems. The additional €19 million in Exchequer funding being allocated for the retrofit scheme will create approximately 850 direct and 400 indirect jobs. It is likely that the impact of the jobs initiative on employment will be most visible from 2012, as economic activity picks up in response to the initiative and other Government measures. The stability programme update, published on 29 April, foresees net employment creation of 100,000 over the period 2012 to 2015.

The jobs initiative represents the first steps of the new Government on the road to improving the economy's international competitiveness and promoting job creation. The intention of the measures contained therein is to target the limited resources available at key sectors of the economy that can build the confidence that will encourage consumers to spend again, provide opportunities for those who have lost their jobs to re-skill and, more important, assist in getting people back to work.

David Norris (Independent)
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I welcome the Minister of State to the House and compliment the Leas-Chathaoirleach on his flexibility with regard to time as far the Leader of the House is concerned. I say this sincerely because the Leader always had a very strong interest in matters when he was on this side of the House. We spoke very closely on the development of the bio-fuels industry in County Waterford. The flexibility afforded is always very useful and I am glad the Leader was not curtailed.

The question of jobs is very significant. Former US President Bill Clinton was quite correct when he said, "It's the economy, stupid". Jobs are where it is at as far as this nation is concerned. We certainly need employment. Unemployment leads to desolation and despair. It is not just bad for the economy; it is bad for the personality. I am very hopeful because I have visited areas throughout the country and I have seen local start-ups and enterprise boards. I pay tribute to enterprise centres and enterprise boards which I have seen throughout the country, for example, in Roscommon several weeks ago. I knew the people there were working from their own experience and this is important. These are organically grown jobs on the ground. One company had the wonderful new idea of collapsible easily-exportable flood barriers. This came about because the people are based in the Shannon plain. It employs a small number of people here but it exports throughout the world and hopes to bring manufacturing back. These enterprise boards and Enterprise Ireland are a key part of what will be a successful outcome.

I have a small amount of experience of business myself and I am glad to state I was successful in running two small companies, one of which is still quite successful. One was in the tourism industry. We need to examine some issues and I know I am on the same side as the Government on this. For example, our bankruptcy laws are daft. They really need to be examined and I appeal to the Minister of State to bring back to his colleagues, in particular the Minister for Finance, that we must address the issue of enterprise boards.

With regard to enterprise, job creation and competitiveness we have an extraordinary Irish gene for creativity. I am known for speaking about James Joyce and I did it this morning and on the Order of Business but we also have science. We have Robert Boyle, the son of the Earl of Cork, with his law of the expansion of gases. I could go on and on. We have so much in the area of science and we do not recognise it enough. Another day, I will have the opportunity to develop this theme.

We should also consider Hollywood. I am very glad that we spend money there. There are begrudgers who say it is wrong to give a party in Hollywood at the time of the Oscars but it is not; it is perfectly right and I hope it continues. Look at what we contributed, from DW Griffith's "The Birth of a Nation"; Rex Ingram, the director of one of the great classics of the silent era, namely, "The Four Horsemen of the Apocalypse"; Richard Baneham, who was nominated for an Oscar for his work on "Avatar"; and actors such as Maureen O'Hara, Daniel Day-Lewis, Stephen Rea, Colin Farrell, Saoirse Ronan and John Ford. Just last week, I presented prizes as I had been on the judging panel for the ICCI's human rights short films competition and one of the other judges was Brenda Fricker, the only Irish person to receive an Oscar. There is so much we can be really proud of and creativity is the root of enterprise as well as the arts and science.

I mentioned Richard Baneham. He is a young man from Tallaght who was awarded a BAFTA for his contribution to "Avatar" and was nominated for an Oscar. This was our third nomination in the area of animation. How did this come about? I remember in the 1980s when the Government attracted a major animation company from New York, Sullivan Bluth, which was based in a huge studio on the docks. It was given special facilities in return for 5% Government ownership of the studio. It opened with a staff of 85 and soon increased this to 300. The studio took young people to the United States and then brought them back. Although the company closed down, it started something and there is real start-up energy in the country. The Ballyfermot-----

Denis O'Donovan (Fianna Fail)
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The Senator has 30 seconds remaining.

David Norris (Independent)
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I think I possibly have a little latitude.

Consider the way in which Ballyfermot College of Further Education took this up. Consider how we have combined technology and imagination with "Granny O'Grimm", "The Story of Kells" and "Give Up Yer Aul Sins". These are wonderful Irish stories with Irish imagination and technology. In the past decade, the animation sector has flourished and hundreds of people are involved and we have moved into cutting-edge 2-D and 3-D animation for cinema screens, television, web, mobile and game consoles. This is what happens when a new company with new skills comes to Ireland and receives support from Enterprise Ireland, Irish content is seen.

With regard to tourism we have had visits of Queen Elizabeth and President Obama. We have fantastic food and hotels which are available at cheap rates. We need to push this out.

We have a success story and we must keep telling it. We are not Greece. We have done the difficult tasks and this Government continues to do them. We continue to increase our productivity. Let us remember that we have a series of companies investing and giving very considerable amounts of employment in the United States. Although we have multinationals here, we also give a significant employment benefit to the United States.

Denis O'Donovan (Fianna Fail)
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I thank the Senator. Sometimes it is hard not to give him latitude.

David Norris (Independent)
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I appreciate that very much.

Lorraine Higgins (Labour)
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I wish to share time with Senator Kelly.

Denis O'Donovan (Fianna Fail)
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Is that agreed? Agreed.

Lorraine Higgins (Labour)
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I welcome the Minister of State, Deputy Perry, to the House. This is my maiden speech and before I make my statement on the jobs initiative may I state how honoured I am to have been selected as one of the Taoiseach's 11 nominees to the 24th Seanad? I am a native of Athenry, County Galway and have lived there all my life. I am delighted to be joined in Seanad Éireann by Senators Rónán Mullen and Michael Mullins. In my work as a barrister I have strived to achieve very high standards and I hope in this House my high standards will be retained and I will work hard on behalf of the people in Galway East and Ireland to give them the dedication they deserve.

I will now speak on the jobs initiative. As we are all aware, Ireland is experiencing a very challenging and turbulent economic time. However, in the programme for Government we have produced a very credible plan to restore the confidence and growth in our economy. Part of this plan is the recently announced jobs initiative and I welcome this development. However, it is but one step in the right direction to address all that has gone wrong in our economy in the past three years. We cannot beat this crisis overnight and the expectation that we will sort out in one fell swoop the unfortunate mess we inherited from the previous Fianna Fáil-led Government is foolhardy to say the least.

This is a sign of our intent in government and a move broadly welcomed throughout the country. In particular, I welcome the reduction of VAT to 9% for all businesses in the tourism industry. This measure will help increase turnover in the sector. This, coupled with the reduction in employer PRSI contributions, which will be available until 1 July 2013, will make it easier for employers in the sector to hire additional staff.

I also welcome the abolition of the travel tax. To have taxed people coming into the country in the first instance was ludicrous. We must recognise specific challenges as an island. Given the demise of our building sector, we are now reliant on tourism and we must facilitate the inward migration of tourists to the country. We need to keep open the businesses dependent on the sector and we need to keep their employees working. Its abolition is a positive move and along with a strategic marketing campaign abroad, it will open up Ireland to all of its core markets.

The only regret I have in this regard is that the initiative focuses solely on the three State airports with no reference whatsoever to Galway Airport, which is essential to my county's connectivity to the world. Galway is a county rich in history, geography, culture, facilities and infrastructure and can meet the needs of the thousands of tourists we are trying to attract. Notwithstanding the recent decision to stop the airport's funding at the end of the year, I want to know whether Galway Airport will be given a share of Tourism Ireland's marketing budget.

It must be recognised that the jobs initiative is just a beginning. More is needed to provide more jobs and maintain those close to the brink. We must look at new ways of financing businesses to assist this process. One in every two companies is in trouble and at risk of not being able to meet its daily financial and trading obligations. We need to address this immediately where businesses cannot acquire funds from their banks, very often experiencing an abrupt reduction of their overdraft facilities.

We also need to address the rates issue. Recently, I met a man in Galway who bought a pub five years ago. He demolished and rebuilt it in the expectation he was adding value to his property. However, his property was rerated and he now pays €15,000 per annum on rates. Next door to this enterprise is a similar business engaged in similar activity. Its owner pays €2,000 per annum in rates. How can we say this is fair? We need to get more equilibrium in the rating system in Ireland. If the rates bill was not hanging over this man's head he might provide an opportunity for people in the community to be employed. One should not underestimate the effect that creating one job can have on a small community.

Owing to the weak economic position in which the country finds itself, we do not have sufficient resources to fund large-scale policy initiatives to generate significant economic activity. Consequently, the jobs initiative will be budget neutral until 2014. What is significant about the measures that have been announced is that they demonstrate that the Government has ambition to move the country forward. They also show the world that we have an objective and, more important, a plan to achieve it. The initiative will help to facilitate the return to work of some of those who are unemployed. It will create confidence among the occupants of households as well as domestic companies and potential investors abroad.

John Kelly (Labour)
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I will focus on what has gone wrong and what changes need to be made. While I do not propose to reduce our generous social welfare rates, it is unfortunate that a series of other bonuses have been introduced for those in receipt of social welfare payments. Free travel and electricity, rent allowance, mortgage subsidies, medical cards and so forth make it difficult for recipients of social welfare to take up employment. They are one of the reasons for the large number of people who are in long-term unemployment. If new charges, for example, water rates or property taxes, are introduced, social welfare recipients should not be automatically exempted from paying them as to do so would make it even more difficult for people on social welfare to take up a job.

Everyone in receipt of social welfare costs the State €21,000 per annum. By giving employers €10,000 for taking one person off the dole queue, we would create 100,000 jobs in the retail and tourism sectors. It should be mandatory for anyone offered such a place to accept it. Those who refuse to participate should have their payment reduced by 5% per annum until such time as they find work. The creation of 100,000 jobs would save €1.1 billion per annum.

Overpricing in the hotel sector, an issue I raised on the Order of Business last week, was referred to by two Senators this morning. I propose adopting the French model under which two star, three star, four star and five star hotels may only charge prices within a fixed price bracket. This would prevent hotels from charging ridiculous prices, such as the €499 per night charged by some establishments last weekend to coincide with a number of concerts in Dublin.

I also raised the issue of rates last week. I ask the Minister to outline the Government's proposals in respect of the rates charged to small businesses. If a business goes under and only one person joins the dole queue, the cost to the taxpayer will be €21,000 per annum. This does not make sense of the company's rates bill is €5,000 per annum. As I have noted previously, for every negative action there will be a reaction.

All of the issues I raise create costs for the Department of Social Protection. Only one small pot of money is available to this country. It is wrong to think of various Ministers having different budgets because we only have one budget. As such, we must formulate ways of ensuring we do not create costs for the taxpayer. Adopting my proposals would reduce the social welfare bill.

Averil Power (Fianna Fail)
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I am pleased the Minister of State with responsibility for small business is present and welcome him to the Chamber. Small businesses have a significant value to the economy. Most companies employ fewer than 50 people and smaller businesses are better embedded in the local economy. While we have had major success in attracting large manufacturing companies to locate in this country and create upwards of 1,000 jobs overnight, some of these companies close within a few years leaving a massive employment gap in the local area. Small businesses, on the other hand, are spread out and more embedded in the local economy.

Our economic future lies in trying to encourage higher levels of entrepreneurship. It is noteworthy that the vast majority of small businesses are Irish owned whereas at least 40% of larger companies are foreign owned. Several key reports on industry have concluded that the future of the Irish and European economies lies in the services sector. Small companies account for 50% of the total turnover in this sector which has significant potential for growth.

Smaller enterprises face many problems. As Senators are aware, many have gone out of business in recent years, while many others are struggling. A large number of business owners worry that they will not be in business next week. Given the pressure the sector is under, I hope the small business advisory group, the first meeting of which the Minister of State chaired the other day, will quickly produce results.

Senator Kelly referred to local authority rates. While I welcome the positive measure in the jobs initiative to reduce VAT for the tourism sector, the level of rates is crippling local businesses and making it difficult for them to make a profit. As has been noted, when a company goes out of business the relevant local authority no longer receives rates from it. Energy costs also need to be addressed.

On the issue of access to credit, the previous Government established the Credit Review Office. The Irish Small and Medium Enterprises Association, ISME, has expressed concerns in recent weeks about whether credit is making its way through the system to small businesses. The position in this regard needs to be monitored to ensure credit is being released.

Senator Norris referred to bankruptcy legislation. The future of the economy lies in entrepreneurship and encouraging people with good ideas to take a risk. Ireland is one of the worst places in the world to take a business risk. International evidence shows that a large proportion of new business start-ups fail. Many entrepreneurs do not achieve success until they realise their third or fourth business idea. We must ensure people can make a mistake without being made bankrupt and prevented from starting up another company. This requires a review of the bankruptcy laws.

The enterprise agencies must become more proactive in their approach to incubation centres. While a procedure is in place to establish community enterprise centres around the country, the focus is on having local groups make the running in this regard. I hope Enterprise Ireland and the county enterprise boards, the role of which is under examination, will take a more proactive approach by identifying gaps and making it easier for local groups to establish new incubation centres. We need to find a means of supporting start-up companies. Incubation centres are a proven means of doing so.

The Tús scheme is an excellent initiative in the area of activation. Tús commenced at the start of 2011 and allows local sports and community groups to avail of the services of people who are unemployed. It gives the unemployed person skills and provides major benefits to sports clubs and other bodies which are able to take on coaches and so forth. I gather, however, that the number availing of the scheme has been low. Has the Government analysed the reasons for the low take-up and identified what steps could be taken to boost participation rates? The scheme has the potential to make a positive contribution.

Tourism is our largest domestic industry. Spread around the country it extends from bed and breakfast providers employing two people to hotels employing 500 people to the convention centre which employs more than 1,000 people. The sector has major potential to develop, especially in the area of marine tourism, which is underdeveloped. We are an island economy with beautiful natural resources but it is not something we are good at doing.

I represent the area of Dublin North-East where we have a fantastic coastline along Howth and Portmarnock but it is under-utilised. If one travels to Greece or countries with such harbours they do tours in and out every ten minutes and make a great deal of money from marine tourism. It is something on which we should have a more specific strategy.

I echo Senator Kathryn Reilly's sentiments about youth unemployment. One of this country's major advantages is that our young people are among the best educated in the world. It is a great loss to us that many of them are having to go abroad but there are provisions in the jobs initiative for internship programmes and training. The Government is building on the work the previous Government did in that area and I hope there will be a major impetus in that regard because if we can keep people at home when they finish their degree and enable them to build up the work experience they need, it will help them to build a future here. If we lose them to emigration and they start to build their lives elsewhere because they do not see any opportunities here it will be a great loss for the investment that has been made in their education both by themselves and the State.

Pat O'Neill (Fine Gael)
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The Minister is very welcome to the House. I am delighted to welcome the Government's jobs initiative. I remind Senator Reilly that we are giving hope through this jobs initiative. It must be remembered that out of the little acorn grows the mighty oak, and this is only the start of getting this country back to work.

Senator Power spoke about rates. During my time on Kilkenny County Council we did a survey on rates. Rates is an issue with small businesses but 80% of businesses in Kilkenny were paying rates of less than €3,000 per year. If that was reduced by even 10% it is only €300 per year.

The biggest charge facing small businesses, and I hope the Minister will examine it, is water in and water out charges. With the rollout of water metering to every house within the next two years we may be able to bring down the price of water because water is a finite resource. It costs money to treat it but if every house is paying, business may be charged less.

This initiative is the central plank of the Government programme and it has delivered on its promise despite the huge challenges and pressures it is facing. I commend the Government, in particular the Minister centrally involved in this important programme.

Leaving aside the excellent content of the jobs initiative, the fact that this Government has hit the ground running and prioritised creating employment opportunities will help to restore confidence. What we were used to in this country prior to the election was a Government looking bewildered as the economy spiralled downwards. What the Taoiseach, Deputy Enda Kenny, and his team of Ministers have delivered since taking office is a competence and sense of purpose that was tellingly lacking in the past.

The jobs initiative is multifaceted. For example, in providing €30 million for school works this summer the Government is not only addressing the need to provide work for those involved in the construction sector and related areas, including traders and suppliers, but also recognising that during the boom the previous Government failed to address the infrastructure and repair of many schools. That is an example of joined-up thinking that was sadly lacking under the previous Fianna Fáil led Administrations.

The Government has estimated that the capital works scheme for schools that is part of this jobs initiative will create approximately 2,400 jobs and 480 indirect jobs. We can all recognise that it is rare for a Government measure to have the capacity to create such a volume of jobs directly, and I very much welcome that measure.

The jobs initiative will provide €60 million for regional roads. Like many of my colleagues here, I spent the weeks before the Seanad election travelling the highways and byways of Ireland. In total I travelled approximately 10,000 kilometres and therefore it is with a degree of knowledge when I say that the Government is being far-sighted in providing an additional €60 million for regional roads. The roads scheme is expected to create 1,000 badly needed jobs which will play a vital role in stemming the tide of emigration as well as helping to restore confidence in communities, thereby kick-starting local economies. That is joined-up thinking in government in choosing those areas to target.

I welcome the decision to reduce the air travel tax to zero. The introduction of the travel tax was short sighted. It did more harm than good and failed to deliver on its intended purpose. Again, in choosing to reduce the travel tax to zero rather than removing it from the Statute Book, the Government is showing a foresight that previous Governments lacked. The Minister, Deputy Noonan, has stated that the reduction of the travel tax to zero is aimed at incentivising airlines to open new routes and boost passenger numbers. If airlines fail to do that, the tax will be reinstated following a review at the end of 2012. The Minister, Deputy Noonan, is showing clearly his expertise and competence in this regard in the way he is choosing to deal with the travel tax.

Similarly, the decision to cut the lower rate of VAT from 13.5% to 9% on a range of tourism related goods and services until the end of 2013 is a clearly thought out and targeted measure. This VAT cut will apply to restaurants, catering services, hotel and holiday accommodation and various entertainment services such as admission to cinemas, theatres, museums, fairgrounds, amusement parks and the use of sporting facilities. In addition, hairdressing and printed matter such as brochures, maps, programmes and newspapers will apply at this new rate.

We are all familiar with the plight of restaurants and hotels in particular which are struggling to cope with the changed economic environment. This new VAT measure will not only entice foreign tourists into the country but also encourage Irish people to make the best of the many fine hotels this country can offer. Encouraging people to holiday at home is important in the context of keeping money in the country and the VAT reduction will contribute towards those efforts. I am aware that the Minister for Transport, Tourism and Sport has been vocal in pointing out the advantages for Irish people of holidaying in Ireland. It is a pity the Government cannot control the weather.

Coming from Kilkenny I am aware that a reduction in the travel tax will benefit my native county which, although it is popular with tourists, still does not receive the recognition it deserves. County Kilkenny has many important historical monuments and buildings, particularly from the Norman period. Our most recent discovery of a hidden gem is the fact that Barack Obama's uncle five times removed is buried in St. Canice's Cathedral. John Kearney is a former Bishop of Ossory, and I am hopeful that the President's recent visit may entice American tourists to Kilkenny.

It is not just the Americans who may be interested in tracing President Obama's roots. It is hoped that a new short-term visa waiver programme will encourage tourists who may not have traditionally visited Ireland to come here. The visa waiver programme applies to 14 nationalities who ordinarily require a visa to enter the State.

Coming from a small village in County Kilkenny I have been struck by the plight of young people, many of whom cannot find work and believe they have no option but to emigrate. Accordingly, I am very pleased to welcome the 20,900 places the Government is making available for training, education and upskilling under a range of schemes. There will be a national internship, with 5,000 places, which will create work placement for a six to nine months period and provide €50 per week in addition to social welfare entitlement. Significantly, this scheme will operate in private, public and voluntary sectors. Almost 6,000 places are to be created at level 6 of the national framework for qualifications. This measure will target sectors with significant unemployment and will begin this autumn. It is clear that much thought has gone into all these measures. The back to education initiative mentioned by the Leader will be extended to provide 3,000 places targeted at adults who did not have a second level education.

Credit facilities were mentioned. One of the industries helping this country to fight back is agriculture, and we must make sure that the credit facilities are passed on to the agricultural sector as well.

David Cullinane (Sinn Fein)
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Like the previous speaker, I will be laying down roots of my own in Kilkenny shortly as my wife is in Kilkenny General Hospital expecting our second child.

Pat O'Neill (Fine Gael)
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It will be good to see the child wearing the black and amber.

David Cullinane (Sinn Fein)
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We will see about that. I want to put my remarks into context. I cannot agree with previous speakers who stated that this jobs initiative amounts to ambition on behalf of the Government. It has been said on numerous occasions that this initiative is revenue neutral but I believe it is jobs neutral as well. I fail to see where the real jobs will come from and in that regard the context has been clearly set out for us again with the latest CSO and live register figures. A total of 440,000 people across this State are out of work, and 14,500 of those are in my county of Waterford. Well over 100,000 young people have emigrated and potentially more will emigrate in the coming months. They do not see any real hope in what was delivered in this jobs initiative.

The measure of success of this jobs initiative or any initiative the Government will take is whether it will eat into the live register figures, so to speak. I am not happy saying this but I have no doubt that given the initiative and the fact that it failed in so many areas, we could be back here 12 months from now discussing similar live register figures, which would be an indictment of this Government. Many promises were made during the course of the election campaign about 100,000 jobs here and 50,000 jobs there but I do not believe those jobs will materialise.

The Government must avoid making the mistakes of the previous Government. One of its biggest mistakes was to believe that cuts provided the way out of recession, such as cutting people's pay and welfare benefits. A previous speaker spoke about some of the secondary benefits people on social welfare receive. The reason they receive those benefits is because they need them. When the low income and middle income families see their wages cut, that has the opposite effect and we have seen that. We have had all these cuts over the last number of years, and we have seen a reduction in retail sales. The reason small businesses across the State are suffering is that footfall is down and people have less money to spend. They are fearful and are tightening up their spending. That is why I have called several times for a proper discussion on the future of the JLCs. It is very important to me because if we continue to cut the pay of low income families, which it seems the Minister is about to do, this means that the industries where those people work, such as the retail sector, hairdressing or whatever, will be punished again because people will have less money to spend in restaurants, grocery stores and so on. Every euro taken from the pocket of a low income family is taken from the tills of local retailers. That has happened over the last number of years and will happen again if this Government continues on its course.

There is some good news on the jobs front in Waterford. A serious regeneration programme is being opened up in Waterford, with three museums known as the Viking Triangle located on the Mall in the city. It is a fantastic initiative and was supported by the city manager, all the political parties and the previous and current Governments. It will create jobs and bring tourists to the area, and it complements the House of Waterford Crystal. I commend all of those who were involved in that initiative.

The county and the region I come from has been operating with one hand tied behind its back for many years due to the failure of the previous Government to designate Waterford IT as a university of the south east. We hear much about funding and money being made available for certain projects, yet this could be done by the Government and would lift the entire region. The reason we need a university is for funding, autonomy, and branding, but also because many young people have to leave Waterford and go to Dublin, Cork and Limerick for fourth level education. They should be able to stay in the city and the region and get the education they need. This is the kind of initiative that the Government could be examining. It is not all about finance, and it is one act the current Government could do that would lift the lives of so many people in Waterford and the south east.

I am very conscious of the mistakes that have been made by the previous Government. We all went through a tough election campaign and we know many people out there are suffering and are looking for hope and something different. However, I have to say that I do not believe this jobs initiaitve steps up to the mark at all. It does not offer hope to those people who are out of work, and the Government has shown a lack of ambition in terms of stimulus, getting people back to work, supporting entrepreneurs and dealing with the real issues that affect business people, such as rates, service charges, rents and so on. These are the issues that we need to tackle. We must support those entrepreneurs and make sure that those people who want to create jobs are given the time and space to do so. The way to do that is not to cut the pay of low income families. That will have the opposite effect. What happened over the last few years clearly has not worked. It has brought us to a situation where 460,000 people are out of work. Let us reverse that trend, make better decisions and get some of those people back to work.

Paul Coghlan (Fine Gael)
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I join others in welcoming the Minister of State to the House. In regard to this subject, we know that the heart of the Minister of State is in the right place. His appointment by the Taoiseach was one with which everyone heartily concurred.

We are in difficult times. My colleague referred to banks, an area where there is genuine difficulty and some confusion about what is available. The Government put in place a plan that banks had to have €30 billion available over the coming three years. There is not much evidence of this money flowing to small businesses. I have great time for Mr. John Trethowan, the credit controller, but the limit on sums that can be referred to him, €250,000, should be increased immediately to €500,000. I believe a request has been made to this effect. I have no doubt Mr. Trethowan is prepared to take this on. He is a fair and reasonable practitioner in the prudent sense. Many cowboys invaded banking in recent times but he is not one of them. I will not say he is a strict northerner but he will not allow banks to incur bad debts. There must be great prudence in weighing up matters but businesses that have existed for years are being pressured by the lack of availability of credit. We have all heard of instances where banks cut back on an existing facility that has been in place for years. It was a normal seasonal matter for one business that I have in mind. That is unreasonable and it must be halted.

There are serious difficulties with rent reviews for small businesses. Initially, there were great difficulties in that regard but the landlords, particularly in provincial town Ireland, saw sense quickly. There are so many units lying idle in the streets of our towns that the landlords reduced rents after dialogue and negotiation. They were correct to do so. Who wants an empty house? Holding onto the tenant or the shopkeeper at a reduced rent is worthwhile. A year or so ago the opposite was happening but I do not think it is happening now. People are anxious to hold on to businesses.

One of the greatest causes of damage to small businesses in Ireland, particularly retail businesses in provincial towns, was bad planning. As a result of out-of-town developments, planners and developers are responsible for the empty shops in main streets and side streets of any town in Ireland. This is because of what was allowed to go out of town and this has caused job losses and untold damage in towns. I appeal to the Minister of State to use his good offices to have the situation addressed.

John Perry (Sligo-North Leitrim, Fine Gael)
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I thank Senators for their contribution to this debate and for their encouraging words of support for the measures in the jobs initiative. I am also grateful for the expressions of personal support on my appointment. I also congratulate the Leader on his appointment. As Minister of State with responsibility for small business, I fully recognise the critical role of 250,000 companies employing in excess of 750,000 people. There is broad agreement across the House on the importance of small business in generating growth and employment in our economy to assist with our recovery. There is a need to recognise the importance of this sector, to provide support to it and to encourage entrepreneurial effort and business development. Integral to this is the need to promote confidence among businesses and consumers alike.

Senator Burke referred to confidence and credit. There have been notable successes in recent months, including the massive jobs potential of the IDA investment in Ireland. Enterprise Ireland has been very successful and the real challenge of Government is the domestic economy. The programme for Government, the jobs initiative and my appointment as Minister of State with responsibility for small business, all confirm the commitment of the Government to small businesses. Our record over the first 100 days in office shows the seriousness of our intent. Senator Norris made a point about the bankruptcy laws and it is important that they are reviewed. They apply for 12 years in Ireland while the period is one year in the UK and that law will be examined. The challenge for Government is the speedy delivery of the jobs initiative, which should give confidence to businesses that their contribution is acknowledged and supported. Supporting businesses in the domestic economy is critical. I want to assure this House that I intend to continue to ensure there is a clear focus on the small business sector and that through my dedicated office I will reflect to Government the key issues that are having an impact on the sector.

I welcome the opportunity provided in this Seanad debate on the jobs initiative and competitiveness to hear Senators' views on the importance of small business and the contribution the jobs initiative will make to our economic recovery. Since the commencement of this debate, along with the Taoiseach, I launched and held the first meeting of the small business advisory group on Thursday, 16 June, the Government's 100th day in office. It is vital that the voice of small business is heard and reflected in our policies to grow jobs and rebuild the economy. I intend to drive this consultative process in my role as chairman of the small business advisory group. In endorsing my initiative in establishing the group, the Taoiseach emphasised that small business can be one of the key drivers in restoring our economic growth and in increasing our levels of employment.

I recognise that the small business advisory group will be working against the backdrop of the most difficult challenge ever confronted by this State in regard to public finances. It is essential that as a Government we communicate what we are doing and that we hear at close hand the issues that need to be addressed more urgently. I have listened to the many issues raised in this debate, including confidence and the sum of €20 billion ring-fenced over the next three years. It is important that this is transparent and evident. We must consider the measures that can be considered to further support small business. I have been encouraged by the robust and positive engagement by the members of the group and by their desire to bring forward practical suggestions to assist the sector. This will not be driven by the idea of another consultant but by straight talking, action and results. This Government does not need another consultant to produce another report. What needs to be done is evident.

Membership of the small business advisory group includes entrepreneurs and representatives from the main small business representative bodies, the Credit Review Office, the State enterprise support agencies, Forfás, Enterprise Ireland and the county and city enterprise boards, as well as officials from my own Department. Senator Coghlan referred to the involvement of Mr. Trethowan and I hope to raise the limit for his office's involvement from €250,000 to €500,000. Next October, it is the Government's intention to hold a forum on mobilising SMEs for the future of Ireland. This will be a national debate and I hope to launch it with the European Commission. In mobilising SMEs we hope to address the issues of regulation, credit access, procurement contracts, the think small first principle and opening new markets. The potential for growth in small companies is clear but many of them are being excluded from tendering for €15 billion in State contracts. Access to credit is paramount. The 2009 code for banking obliges the banks to respond to loan applications within a timeframe of 28 days. They cannot string clients out for four months.

A number of Senators spoke about the difficulties experienced by small businesses in accessing credit. This issue is at the core of Government action and is the centre of the jobs initiative. There are three principles in business. The taxpayer has put billions of euro into the banks and I expect them to invest that money in viable companies which can create jobs. It is a three-way combination. The taxpayer and the Government have delivered but the jury is out with respect to the banks. The small business people will create the extra jobs unless they are restricted from doing so by their banks. The Government is taking measures to restructure and recapitalise the banking system to ensure it provides substantial new lending into the economy. The financial authorities will be rigorously monitoring the banks' activities to ensure credit is available to borrowers who meet reasonable credit standard requirements. Banks have changed the definition of "viability" considerably but I intend to engage further with the Irish Bankers Federation, the two main banks and the other institutions in this regard. The Minister for Finance will be setting lending targets for the pillar banks and performance against these targets will be measured. I have the height of confidence in Mr. Trethowan's office. I have heard many stories about the difficulties that small companies are experiencing. People want support rather than grants. They want encouragement to retain their businesses. There is a great sense of pride in owning a family business. Nobody wants to close down a company because it has a huge impact on the family and everyone else.

Following the recapitalisation of the banks, there is sufficient capacity to provide credit to viable businesses. Such businesses should not be afraid to approach their banks or slow to appeal refusals of credit to the internal structures of the banks or the Credit Review Office. I urge businesses to make more use of these appeals mechanisms and ask Senators and other politicians, along with business representative bodies, to encourage businesses to follow formal appeals procedures. It is also important that examples of refusals are brought to our attention. Mr. John Trethowan has the capacity to pursue cases with the banks and has an open door to assist any small businesses being refused credit.

Several Senators welcomed the proposed temporary partial credit guarantee scheme announced as part of the jobs initiative. I am pleased to confirm there has been further action in this matter since our last discussions. A call for competition for the design of a scheme was published by my Department on the e-tenders website on 15 June. This will be a targeted scheme aimed at commercially viable businesses that can demonstrate repayment capacity for additional credit facilities but which cannot secure credit due to insufficient collateral for the additional facilities or because they are growth or expansionary companies which, due to their sectors, markets or business model are failing to get support under the banks current commercial lending.

It is important that we deal with vital emerging markets, such as tourism, creative arts, green energy, medicine and modern agriculture. The design of this scheme will draw on international experience to support new lending that would not otherwise have been extended by the banks. In this way, the scheme will complement rather than substitute existing lending activities by the main financial institutions. It will be designed to encourage banks to lend to new or expanding commercially viable SMEs to allow them grow, develop new products and expand into new markets. The Government's commitment will be for an initial period of one year. Specific performance criteria will be set down to allow for review and revision of the scheme at the end of that initial period before committing to a roll-over for subsequent years. There will be a modest level of exposure to the taxpayer when the scheme is launched, but there will also be a significant positive knock-on benefit to the economy in terms of job creation, welfare savings and returns to the Exchequer by way of tax revenue generated. It is intended to have a targeted scheme in place by the autumn. Of itself, the temporary partial credit guarantee scheme will not solve all the issues around access to credit but it will form a key component in the suite of initiatives aimed at ensuring the flow of credit.

The micro-finance start-up initiative is another key component. The Government acknowledges the difficulties which can be experienced by micro-enterprises in getting access to finance at an early stage of business development. Getting working capital is critical for start-up businesses. The Government is committed, therefore, to developing a suitable micro-finance fund for the micro-enterprise sector. Arrangements for the establishment and operation of such a fund will be developed in consultation with the relevant stakeholders, with a view to formalising proposals for this year's budget. This commitment represents the Government's contribution to filling this gap in the area of financing enterprise.

To improve the cash flow of businesses and particularly small businesses trading domestically, the Government is now requiring the Health Service Executive, local authorities and all other public sector bodies, excluding commercial semi-State bodies, to pay their suppliers within 15 days of receipt of a valid invoice. This measure is applicable from 1 July 2011. We hope to put in place a code of conduct for commercial companies whereby they pay smaller companies within 30 days because they can take up to 90 days at present. The initiative is an extension of the arrangement that currently applies to payments made to suppliers by Departments. I have already written to my colleagues asking them to take a direct interest in how the agencies under their aegis comply with the requirement. State agencies are also required to publish quarterly reports on their websites outlining their performance in meeting the new requirements. In addition, Ministers will be responsible for publishing reports on the performance of all bodies for which they have responsibility.

I note the concerns expressed by a number of Senators on the application of the pension fund levy designed to raise funding for the jobs initiative. The levy will apply at a rate of 0.6% to the capital value of assets under management in pension schemes approved by the Revenue Commissioners under Irish tax legislation. The schemes affected are retirement benefit schemes, that is, occupational pension schemes, retirement annuity contracts and personal retirement savings accounts, other than what are known as vested PRSAs. While the primary responsibility for policy in this area rests with the Minister for Finance, I can confirm that the pension fund levy provisions of Finance (No. 2) Bill 2011 were amended on Committee Stage to ensure that pension fund trustees will not be allowed to reduce disproportionately the benefits of any member or class of member of a pension scheme.

The pension fund levy is a temporary measure at a relatively low rate and will fund initiatives targeted to assist those most in need in the economy, namely, the unemployed. Much of the value of pension funds is attributable to the rolled-up value of generous tax reliefs that pension savings have historically been granted and continue to receive. The temporary levy on pension funds will allow recipients of past generous tax relief to make a contribution to assist those who are looking for jobs.

We touched on many other issues during this debate. Several Members, including the Leader, Senator Cummins, displayed an understanding, concern and respect for small companies, which is very important. Senator Cullinane made a point about the IT in Waterford. The criteria for the technological university of the south east is under review at present. The programme for Government is committed to exploring the creation of a university in the south east. The Leader has been actively pursuing that issue. It is important to put that on the record.

Given that he is present I will refer to Senator Colm Burke's points. The banking situation is critically important. It is at the heart of the difficulties in the domestic economy. It is critically important that we support enterprise. On Senator Cullinane's point on the jobs initiative, this is the first step. We are going to encourage the 250,000 companies to create jobs. Job creation is a core aim of the Government. We will encourage employers to create jobs. They will work closely with the Minister for Social Protection, Deputy Burton, on the transfer of welfare benefits to people taking up employment.

Reference has been made to many issues. The jobs initiative is just a start. A youth employment internship programme has commenced. A major announcement will take place on enterprise boards which will be effective in all regions. The Government is pro-business. We wish to encourage employment and get 500,000 people back to work. I accept that more needs to be done. There is much expertise within this House. I thank Senators for their contributions. I look forward to returning to the House to discuss many other issues. It is important that debate is generated on employment. We must engage with every elected Member, especially Senators. The many good contributions that were made will be taken on board by my senior civil servants in the formulation of a policy that will be focused on the recognition, respect and concern the Government has for business.

We are actively listening to those involved in the domestic economy. Foreign direct investment is doing exceptionally well. The Minister for Jobs, Enterprise and Innovation, Deputy Bruton, was in America last week where he received an extraordinary reaction. American and European companies are still investing in this country. Enterprise Ireland companies are doing exceptionally well. Our job at the moment is to kick-start the domestic economy. Small companies are the backbone of the domestic economy. That is why I very much value the extensive debate in the Seanad and the ideas that have been presented.

The Government is listening actively. Our job is to ensure that the ideas expressed in the debate will be taken on board in the coming months. The aim of the Government is to get this country back working again. I look forward to travelling around the country to all the constituencies in the coming months to clearly outline what the Government will do, which is to mobilise SMEs for the future of Ireland. We will travel to every county to mobilise SMEs and bring in the key people and the bankers to inform us about what they are doing in their region to help SMEs. Successful entrepreneurs exist and the Government's job is to create an environment that is conducive to employment. I am delighted to work in this area. I would appreciate it immensely if people would put forward their ideas to ensure that we are listening to people on the ground and that we are not like the previous Government which was intoxicated with power. Our job is to ensure we represent people, listen to the issues that arise and encourage enterprise.