Dominic Hannigan (Meath East, Labour)
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Question 236: To ask the Minister for Jobs, Enterprise and Innovation the plans he has to support small and medium enterprises; and if he will make a statement on the matter. [34834/11]

Richard Bruton (Dublin North Central, Fine Gael)
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The Government is fully committed to addressing the issues of particular concern to SMEs. Already some important issues have been tackled under the Jobs Initiative. These include initiatives such as:

The design of a Temporary, Partial Credit Guarantee Scheme. A targeted Scheme will be in place over the coming months and will operate for one year;

An initiative on a Microfinance Fund;

The extension of the 15-day prompt payment arrangements across the wider public sector in Ireland for invoices received after 1 July 2011.

Access to Finance is obviously a key issue for the small business sector which is heavily dependent on the banking system. The initiatives taken by the Minister for Finance to restructure and re-capitalise the banking system is the principal response to making credit available. A range of measures has been announced to reorganise, recapitalise and deleverage the domestic financial system in order to restore the banks to health and continue to provide a secure banking system for deposits. These measures create capacity for the pillar banks to lend in excess of €30 billion over the next three years in SME and other important sectors. Government has imposed lending targets on the two domestic pillar banks for the three calendar years, 2011 to 2013. Both banks will be required to sanction lending of at least €3 billion this year, €3.5 billion next year and €4 billion in 2013 for new or increased credit facilities to SMEs.

The design phase of a Temporary Partial Credit Guarantee Scheme is nearing completion and I will bring formal proposals to Cabinet shortly.

In line with the commitment in the Programme for Government, a Microfinance Loan Fund to provide loans to micro enterprises is being developed. The Fund, including scheme design and appropriate delivery mechanisms, is being developed with a view to formalising proposals before the end of the year.

The Prompt Payments initiative plays an important role in redressing the cash flow difficulties experienced by small businesses. It is important that Government makes timely payment to all the businesses around the country who supply goods and services to the public sector. In accordance with the Government's Decision of 19 May 2009, all central Government Departments are now required to pay their business suppliers within 15 days of receipt of a valid invoice. In addition, the Government now requires the Health Service Executive, the 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.

The Small Business Advisory Group was established on 16 June 2011 and is chaired by my colleague Mr. John Perry, Minister of State for Small Business. Its objective is to facilitate structured and regular dialogue with representatives of the small business sector on issues of concern. It is intended to present a report on priority issues to the Cabinet Committee on Economic Renewal later this month. The High Level Group on Business Regulation, also chaired by Minister Perry, was set up to provide a fast-track mechanism for business to communicate specific red tape issues to Government and follow through on their implementation. The Group works to identify the administrative burdens placed on businesses, particularly SMEs, arising from regulation and to determine ways to reduce and simplify these or eliminate them where they are unnecessary. The Group has already processed a range of red tape issues and continues to seek practical solutions to further concerns. In addition to this work, the High Level Group was involved in validating the administrative burdens identified with my Department in 2009 and 2010 as part of the target to reduce administrative burdens by 25% by 2012.

The Enterprise Development agencies also have a very significant role to play in providing support to SMEs and Enterprise Ireland provides supports to companies in areas such as:

· Driving sustained R&D and innovative activities direct support for in-company R&D and collaboration;

· Supports to drive sales and marketing capabilities of companies;

· Building Leadership and Management Capabilities;

· Embedding Competitiveness Improvements through a tailored programme of Lean Initiatives;

· Financial supports, including grant aid to support business development activities in established companies.

Furthermore, the County and City Enterprise Boards (CEBs) promote and develop indigenous micro-enterprise potential and stimulate economic activity and entrepreneurship across the country. The CEBs deliver a series of programmes to underpin this role and provide both financial (grants) and non-financial (advice, training and mentoring "soft supports") assistance to project promoters who have the capacity to achieve commercial viability.

I am confident that the focus that this Government has brought to bear on the particular areas of concern for SMEs, will yield real benefit to individual enterprises and the economy as a whole in the short to medium term.