Employment creation is a key component to restoring confidence in our economy – Perry
Address by Minister for Small Business, John Perry T.D. at the SFA Annual Conference, “Restoring Consumer Confidence”
Check Against Delivery
Wednesday 20th June 2012
- Govt focused on ensuring Irish companies are supported in every way to develop their business, increase exports, create jobs and re-build the economy
- Ability of small businesses to succeed and grow underpins our future potential for jobs, growth and prosperity
- Competition within Ireland’s domestic economy - vital to improving overall competitiveness and increasing consumer demand
Good Morning Ladies and Gentleman. Firstly, I would like to thank Patricia Callan for inviting me to address your conference today.
The theme of today’s conference “Restoring Consumer Confidence” is of vital importance to the Government. The Government considers that the best means to improve consumer confidence is to restore sustainability to the public finances, repair the banking system and return the economy to sustainable growth. Effectively addressing these key areas will result in increased employment, investment and consumer spending and will be crucial in driving this country forward.
Job creation and retention is central to our economic recovery and the Programme for Government has job creation at its core.
The role of my Department is to ensure that we have the right policies to support enterprise and innovation so that quality employment opportunities can be grown and maintained. It is only by fostering the right environment for businesses to expand that we will see new jobs coming on stream.
Employment creation is a key component to restoring confidence in our economy. An improved employment environment, will in my view, restore both business and consumer confidence.
With increased employment, people will become more confident, in terms of spending more of their disposable income on goods and services.
That is why this Government’s focus has, since coming into office last year, concentrated on job retention and job creation initiatives, so as to restore confidence in the economy.
In May 2011, the Government launched a ¤500M Jobs Initiative which has the objective of:
- Restoring confidence in the economy, both internationally and domestically;
- Supporting the maintenance of existing jobs, and facilitating the creation of new ones;
- Improving the business environment and assisting people to get back to work.
Small businesses are a central part of the economy and play a vital role in society and local communities as well. The Government are aware that it is absolutely critical to put SMEs right at the centre of our thinking in driving economic recovery.
The ability of small businesses to succeed and grow underpins our future potential for jobs, growth and prosperity. Government is focused on ensuring that Irish companies are supported in every way to develop their business, increase exports, create jobs and re-build the economy.
Advisory Group for Small Business
One of the first initiatives that I took as Minister for Small Business was to look at the need to have continuing dialogue structures in place whereby the concerns of small businesses could be brought to the attention of the newly-appointed Government.
The Advisory Group for Small Business has brought the collective insight of its stakeholders in the Small Business sector to Government and in doing so has identified a number of priority Actions to be implemented by Government.
A number of these recommendations have fed into the Action Plan for Jobs, particularly in relation to assisting the small business sector to cope with the current economic crisis and to prepare businesses for future growth and job creation.
Action Plan for Jobs 2012
The Action Plan for Jobs 2012, published in February 2012, clearly shows the commitment this Government has to Small Business.
The Action Plan shows our commitment to implement change and reform in a step by step approach, to re-energise the economy, to meet the challenges of recovery, to address a failed economic model, to restore confidence and to enhance Ireland’s position in the world.
My Department is driving this Plan through every Government Department and over 35 agencies. It can and must succeed. It is an engine for change and is something we intend to revitalise annually.
An essential element of this process is helping Ireland to become the best small country in which to do business by 2016.
First Progress Report on the Action Plan
The first Progress Report on the Action Plan was published by the Government on the 20th April. The report shows that 80 of the 83 measures due for delivery across the whole of Government in the first Quarter of 2012 have been implemented.
Some of the key measures which have been delivered include:
- The launch of the “Succeed in Ireland” initiative, aimed at delivering at least 5,000 jobs in five years;
- The Launch of a new Potential Exporters Division in Enterprise Ireland, targeting 1,800 new exporting companies;
- The publication of legislation for the Partial Credit Guarantee Scheme;
- The design and launch of the new ¤150M Development Capital Scheme, aimed at addressing a funding gap for mid-sized, high-growth companies;
- The issue of a global second call under Innovation Fund Ireland worth more than ¤60M, to target investment in high-growth technology companies;
- The allocation of ¤20 million to a new Education and Training Fund;
- The extension and simplification of the Employer’s PRSI exemption scheme, and;
- The enactment of the Finance Bill, giving effect to several pro-jobs measures.
The Action Plan for Jobs has set a target of supporting the creation of 100,000 net new jobs over the period 2012 to 2016, with a longer term objective of having two million people at work by 2020.
The progress achieved in the first Quarter of 2012 is just the first stage in delivering on the 270 measures in this year’s Action Plan. The impact of the process in terms of jobs created will be measurable over a longer period.
With regard to returning the economy to sustainable growth, we have seen significant improvements in our competitiveness. In terms of the labour market, we have targeted our limited firepower in more labour-intensive sectors, with measures contained in the Jobs Initiative and the recent Action Plan on Jobs.
However, I am also encouraged by a number of recent significant job announcements which show an increased level of confidence from investors in the Irish economy and in the Government’s policies. While the increase was relatively small, at least we are moving in the right direction.
Access to Credit
One of the critical issues facing the Irish small business sector is the unavailability of adequate credit facilities. We all know that access to finance is a key issue for small businesses and is critical to long-term economic success.
The various initiatives taken by my colleague, Michael Noonan, the Minister for Finance, to restructure and recapitalise the banking system are the Government’s principal responses to making the banks once again fit for purpose and able to make credit available to viable businesses.
As I already mentioned, the Action Plan for Jobs identifies the Temporary Partial Loan Guarantee Scheme and the Microfinance Fund as two further actions to address this issue.
These two schemes will be up and running in the third quarter of this year. Both of these schemes are designed to assist companies who have been refused credit by the banks, because they are deemed to be a higher risk.
We are urgently progressing the necessary legislation to underpin the Loan Guarantee Scheme, which is designed to assist viable micro, small and medium enterprises on the margins of commercial lending decisions, to gain access to credit.
Capita Asset Services Ltd, based in Maynooth, has been contracted by my Department to act as the Operator for the practical oversight, management and operation of the Scheme.
The Microfinance Loan Fund is designed to stimulate lending to sustainable micro enterprises and is targeted at start-up, newly established or growing micro-enterprises across all industry sectors, employing not more than 10 people.
It will provide loans of up to ¤25,000 for commercially viable proposals that do not meet the conventional risk criteria applied by commercial banks.
Meeting the Challenges of the modern consumer
The rebuilding of Ireland’s cost competitiveness is a key element to the restoration of our economic stability.
If sheltered elements of the domestic economy are not exposed to greater competition, services inflation will continue to outpace the Eurozone average and the cost competitiveness of Irish firms will worsen.
Competition policy can play a vital role in improving the competitiveness of an economy but particularly so in a small open economy such as Ireland. Ensuring competition within Ireland’s domestic economy is therefore vital to improving our overall competitiveness and ultimately increasing consumer demand.
To this end the Competition Authority has made a number of recommendations aimed at increasing competition in locally traded sectors where competition may be absent, limited or restricted. Much progress has been made in implementing these recommendations.
Aside from Government macro initiatives to support small business, SMEs themselves have a responsibility to ensure that they are fully equipped to meet the needs of modern consumers who undoubtedly have become much more discerning and strategic in relation to the goods and services they buy.
In this regard, the National Consumer Agency has tracked consumer empowerment metrics since 2007 and the latest data published in March 2012 shows that levels of stated empowerment are at all time high levels:
- 77% state they are confident of their rights;
- 72% assert they are knowledgeable of their rights, and;
- 76% feel protected in respect of their rights.
The most recent research in relation to consumers’ willingness to complain, conducted in May/June 2011, revealed that 85% of consumers were willing to complain when they have cause or reason to do so.
The number with cause or reason to complain or return an item and actually doing so was at a record high of 92%. Encouragingly, over 3 in 4 (78%) of those who complained found the complaint process easy and 84% of those who complained had their problem completely resolved.
The message from the research is clear, consumers are more willing than ever to assert their rights and take action if they have a problem.
The challenge for retailers and service providers, therefore, is to ensure that they have appropriate systems in place to deal with the inevitable issues that occur and respond to these in a fair and open manner.
Small businesses are currently operating in a particularly difficult environment, so it is important that we continue to focus on delivering on a practical programme of actions that can achieve positive improvements in the operating environment for small businesses.
Our future economic prospects depend on sustaining our strong entrepreneurial spirit, even in the face of unprecedented economic challenges.
Now more than ever we need ambitious and energetic entrepreneurs who can play a real part in driving a positive uplift in the economy, leading to improved customer confidence.
I strongly believe that every small business is a potential employer and if they are willing and confident enough to take a risk, they will play their part in getting Ireland back on track, contributing in a tangible way to the well-being of local communities.
At the end of the day, it’s not the Government working alone that is going to lead our economy to recovery. It is business leaders, entrepreneurs, innovators and researchers — people who are willing to innovate, take chances and dream the big dreams.
If people in small companies are supported, they will create jobs at little or no cost to the State and restore confidence in our people and the economy.
I hope you benefit greatly from this conference, enjoy the remainder of the day.
For further information please contact:
Department of Jobs, Enterprise and Innovation: 631 2200, email@example.com
Sinéad Fennell, Communications Advisor to Minister Perry, 086-6075266
Last modified: 20/06/2012