I commend Deputy Dara Calleary on the motion. He has rightly pointed out the importance of small and medium enterprises and the fact that 350,000 self-employed people are involved in this sector. It is important to acknowledge the work of small and medium enterprises, which account for a great majority of all active business enterprises in the Republic, employing 68% of the workforce and generating just over half of the State’s annual turnover, according to the Central Statistics Office.
We know Ireland is acknowledged as a world leader in attracting foreign direct investment, with 160,000 people employed by multinationals. That is all the more reason to give more prominence to the role of the self-employed and business owners in the economy. There is great diversity in the SME sector, ranging from small engineering firms to local supermarkets. While we have a worldwide reputation for exports, particularly in the agriculture sector, more than half of the workforce in Ireland – around 56% – work for native companies that do not export anything. Therefore, unemployment and the jobs crisis cannot be solved by focusing on foreign direct investment alone. If we support the SME sector, and I hope we do, we will ensure there are job opportunities for those with traditional skills as well as people with high-tech qualifications.
A number of recommendations have been made on this side of the House. For example, it is important to increase PRSI benefits for the self-employed, the importance of access to credit for the SME sector cannot be stressed enough, and we must end the disparity in tax treatment between the self-employed and PAYE workers.
The CSO’s Business in Ireland 2012 study provides an interesting snapshot of the importance of small business to the Irish economy. The study indicates that while SMEs employ almost seven in every ten workers, they account for less than half of the State’s gross added value. In other words, we are relying more and more on foreign multinationals. Other CSO figures going back to June 2012 show that there were 185,500 active businesses in operation here, employing 1.2 million workers. Over 90% of these SME businesses were classified as microenterprises with fewer than ten employees.
I would like to give the example of Ballinasloe Area Community Development Limited, or BACD, a volunteer company run by a board of directors which was set up in 1999. The prime aim of that company was to create jobs in Ballinasloe following the loss of approximately 1,300 jobs at AT Cross, Dubarry and Square D. This company had the author of the CEDRA report, Professor Cathal O’Donoghue, as a guest speaker at its AGM last year, and the chief executive of Action for Market Towns, Mr. Chris Wade, came from the UK on a fact-finding mission to Ballinasloe. Only last week, the Minister of State, Deputy Ann Phelan, addressed a meeting of BACD in Ballinasloe on the €250 million rural development programme. There are local people in Ballinasloe who are very anxious to work together on job creation.
What has been very disappointing is the fact that no funding has been provided to the community enterprise scheme for business development management training since 2012. A replacement scheme, the regional action plan for jobs, was announced in February of this year, but community enterprise centres are still awaiting further details of the scheme. It is also disappointing that there is no information on site visits by IDA or Enterprise Ireland clients to Ballinasloe and other smaller towns. The same is true for many market towns or smaller towns in Counties Galway and Roscommon. The focus always seem to be centred around Galway city, while other towns are described as being so many miles or so many minutes from Galway city. We really have to look at that and try to help out these towns.
Such towns used to have town councils, which played a major role in trying to develop industry, but since these councils were abolished, the towns feel they are being forgotten by the IDA and Enterprise Ireland. There should at least be information in the Minister’s Department on the question of site visits to these towns. This information is available for other towns, so why is it not available for Ballinasloe, Tuam or Loughrea?
There is also the issue of helping those SMEs in distress in regard to practical issues such as accountancy fees in order to support applications for new credit or restructuring with the banks. There is also the tax disparity between PAYE workers and the self-employed, which should be highlighted. To give one example, a self-employed single person on an income of €15,000 pays almost six times as much tax and PRSI as an employee on the same income, which shows the disparity that exists. This should be tackled in order to help the SME sector.