Seanad debates
Tuesday, 3 October 2023
Nithe i dtosach suíonna - Commencement Matters
Small and Medium Enterprises
1:00 pm
Fiona O'Loughlin (Fianna Fail)
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I want to thank the Cathaoirleach for selecting this issue, and the Minister of State at the Department of Enterprise, Trade and Employment, Neale Richmond, for coming along here today. I want to discuss an issue of utmost importance, and that is the economy of south Kildare. I totally understand that within the Minister of State's brief, the economy of every county and constituency in Ireland is very important to him but he will forgive me for being parochial on what I am going to talk about. As we all know, a thriving economy is the backbone of any community, in terms of employment and investment in shops, employment and people having the opportunity to shop locally in their own town and community. It is essential that we all work together to foster growth and prosperity within our communities.
Kildare South holds tremendous potential for economic development. It is a very strategic location that has well-connected transport links and a very skilled workforce. In order to harness all of those advantages it is important that we prioritise key areas in building a robust and sustainable economy. It is important that we look at foreign direct investment, FDI, and how we can attract businesses. For example, we have 39 IDA Ireland companies employing 12,174 people in Kildare, and employment among IDA Ireland clients has improved and increased by around 30% in the past five years, which is very significant. Some 9,270 people were employed in Enterprise Ireland-supported companies in 2022. However, I will speak in the main about the small and medium-sized businesses. It is vital that we support and nurture our existing businesses, small, medium and large. Local enterprises are the very lifeblood of our economy in providing jobs and services to our community. At the moment, the SME sector represents about 86% of ratepayers in Kildare. Some people think of Kildare as the place that has the very large IDA companies but the fact that 86% of our rates come from the SME sector is very important.
With my colleague, the Minister for Finance, Deputy Michael McGrath, I recently hosted a pre-budget breakfast for local business people from around Kildare. They were rightly impressed by the Minister's depth of knowledge and clear grasp of all the issues within his portfolio. However, there are many more day-to-day concerns that fall under the Minister of State's remit and that of the Department of Enterprise Trade and Employment. A recent survey showed that almost one third of business owners in Kildare noted recruitment and retention as their number one challenge and concern while one in six noted the cost of energy and raw materials. Rising interest rates and access to capital are other issues of concern. I thank Kildare Chamber of Commerce for sharing these figures with me.
From speaking to local business owners, I know that they are very worried about the relative uncertainty with the economy at present, whether it is in regard to staffing, costs, the impact of inflation and interest rates or the many other daily worries and concerns business owners in South Kildare face. We are very lucky to have a well diversified economy in Kildare. I know only too well the entrepreneurship skills that exist. It is vital the Department protects our local businesses.
I am asking the Minister of State what his Department can do to help support our local businesses with the concerns we have in the uncertain world in which we live.
Neale Richmond (Dublin Rathdown, Fine Gael)
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I thank the Acting Chair and Senator O'Loughlin. It is always great to spend time with them and in the Seanad more generally. I was going to list out some of the Enterprise Ireland and IDA numbers for Kildare but the Senator has already jumped the gun on that so I will not repeat them. However, it is worth noting how sizeable and important they are first and foremost for the local economy but also for Ireland Inc. as a whole. The Senator rightly mentioned our small and medium-sized enterprises and our new enterprises. I want to mention the work of the local enterprise office in Kildare. I hope to visit there soon when industrial action allows.
In 2002, the local enterprise office in Kildare supported 256 businesses providing 1,297 jobs and a net growth of 148 new jobs. This was done through the mentorship of almost 500 business people and financial supports to the tune of €900,000. These small enterprises are the new ones that have been created in the last year or so. They are the ones that are able to access the grants and the ones with fewer than 15 employees that can make the most of the opportunity being provided to address the very clear challenges that counties like Kildare face.
On the whole, it is right to say that businesses in Kildare are doing really well. Thanks to these businesses, the county has seen a decrease in those on the live register of 52% since 2016. This is really huge progress and it should be celebrated. I fully acknowledge the Senator's concern and that of those business people who she met recently, along with the Minister for Finance, Deputy McGrath.
I will try to provide some insight into what is being done, what can be done and what hopefully might be done additionally after the budget next week. The first area is directly under my remit not only in the Department of Enterprise, Trade and Employment but as the line of Minister of State with responsibility for employment affairs. I refer to the skills shortage and the lack of available staff. This issue is impacting every single sector of the economy and every business of every size, but in particular the smaller businesses that need to be more agile when it comes to rostering, hours and shift work. The proposed solution to this is to take a two-pronged approach. This is a whole-of-government approach that starts in my Department but feeds into the work of other Departments such as the Department of Further and Higher Education, Research, Innovation and Science, the Department of Education, the Department of Health, the Department of Agriculture, Food and the Marine and the Department of the Environment, Climate and Communications. It feeds into everything basically.
The approach tries to ensure upskilling and continuous learning opportunities for our workers to ensure they are equipped to thrive in what is very clearly a changing work environment.The advent of artificial intelligence, technological changes and changes to the workplace all involve retraining and upskilling, and every Department is involved in ensuring our workers have access to courses and skills required throughout their careers.
Apprenticeships will play a key role. We do not have enough tradespeople in Ireland. Apprenticeships can be taken in insurance and retail and in many more trades than the traditional craft trades that people associate them with. This will help to ensure we have the necessary skills for businesses in the future.
To help businesses in the here and now, we have our work permit system. Last year, my Department issued 40,000 work permits to workers from outside the EEA, which includes the EU countries, Iceland and Liechtenstein, and from Switzerland. Some 4,500 people came from the United Kingdom and about 30,000 people came from the EU to work to fill the skills gaps. We know that many businesses rely on the work permit system and inward migration, so we are currently undertaking a review of the occupations eligible for a permit to ensure the system is truly working for businesses. This is the short-term measure. Last year, 40,000 people came from the EEA. This year, we expect the number to be about 38,000. In 2021, it was 19,000. Therefore, we can see a systematic jump as we come out of the pandemic and crisis. That is the key area we look to address.
With regard to labour shortages, the Deputy mentioned energy bills, interest rates, insurance rates and much else besides. I will use my time for supplementary questions to address these because the Senator will have further questions on them and I have already eaten up the time.
Eileen Flynn (Independent)
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I should have added that the Minister of State is very welcome to the House. There is always a positive engagement when he is here.
Fiona O'Loughlin (Fianna Fail)
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I thank the Minister of State for his very comprehensive reply. I acknowledge the work of the staff of the local enterprise offices, LEOs, including Ms Jacqui McNabb. Ms McNabb is absolutely inspirational and her team do really incredible work mentoring and supporting new businesses. However, with regard to existing businesses, I believe that apart from addressing the obvious shortage of skilled labour mentioned by the Minister of State, providing access to capital is really important.
I also want to give a shout out to Mr. Allan Shine and his team in County Kildare Chamber because they work very well with the LEO and Kildare County Council in attracting employers and supporting employers within Kildare.
The Minister of State mentioned apprenticeships. He is absolutely right that we need more. One area of concern is north-west Kildare, with which I know the Minister of State will be familiar. It is on the border with Offaly. We do not really have any apprenticeship programmes there. I am referring to the area between Rathangan, Allenwood and Carbury and also to some very small areas. I mentioned this before to a former chief executive of the Kildare and Wicklow Education and Training Board, ETB, in respect of providing a building.
We are lucky that plenty of houses are being built in Kildare but there is still concern about the cost. For those who may have to access jobs that are not that highly paid, there is an issue around the affordability element.
Neale Richmond (Dublin Rathdown, Fine Gael)
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I thank the Senator and Acting Chairperson for their very warm welcome.
I am more familiar with the southern end of the Senator's county because my late father was employed by an Athy-based company for 35 years. The southern end is much closer to the Senator's own home but I will take on board what she said about the area around Rathangan and Carbury, leading into the Offaly area.
Fiona O'Loughlin (Fianna Fail)
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And Edenderry.
Neale Richmond (Dublin Rathdown, Fine Gael)
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And, of course, Edenderry, where my mother-in-law is from. How could I forget that?
I will raise the matter with Kildare and Wicklow ETB and do so also when talking to the LEOs, Enterprise Ireland and indeed IDA Ireland about the opportunities for investment in the area.
Capital is an issue that comes up in every engagement I have with businesses of all sizes that wish to scale up. We certainly believe the new abilities given by the Minister of State at the Department of Finance, Deputy Carroll MacNeill, to the credit union sector represent an opportunity to bridge the gap and provide finance that may not be coming from the pillar banks or investors of another scale.
On housing, the Senator is correct that a massive amount of construction is ongoing in Kildare. It is really welcome. Supply is the key to addressing all issues, but this means the supply of all types of homes. I am referring not just to the private three-bedroom and four-bedroom dwellings but also to those associated with the cost-rental and social and affordable housing schemes and to apartments and duplexes. The more of these we see, the more we will address the key accommodation problems faced by those on lower salaries or starting off in their careers.
All in all, I know what an amazing advocate the Senator is for her entire county, particularly the southern part.This is a good and frank exchange. I am due to visit Kildare officially with the LEOs and the County Kildare Chamber, facilitated by Ms Sinéad Ronan, when I get an opportunity to do so. I look forward to the Senator joining me when I visit Kildare.
Eileen Flynn (Independent)
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The Minister of State, Deputy Noonan, is welcome to the House.