Robert Troy (Longford-Westmeath, Fianna Fail)
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56. To ask the Minister for Enterprise, Trade and Employment his plans to address the challenges facing SMEs. [43436/24]

Robert Troy (Longford-Westmeath, Fianna Fail)
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I thank the Acting Chair for the flexibility. I did not realise we would come back to this question but I welcome the opportunity to hear the Minister’s plans with regard to the additional measures that can be introduced to support our SME sector, which everyone across the Chamber will agree is of critical importance to our economy.

Peter Burke (Longford-Westmeath, Fine Gael)
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I thank the Deputy for his very important question. We know small family businesses are the backbone of the economy. They employ two thirds of all employees in our country and drive so much vital economic activity across many of our communities. In the first few weeks of my appointment as Minister for Enterprise, Trade and Employment I introduced an SME package which brought a second round of the increased cost of business grant, really focusing on retail and hospitality, the sectors which are very vulnerable according to our cross-departmental report. We also reduced PRSI for lower-paid workers. Approximately three quarters of national minimum wage workers are in retail and hospitality. We increased the threshold for Microfinance Ireland and it has now kicked in. We signed a statutory instrument to bring it up to €50,000. Take-up in that regard has been very strong. I met with the chairperson and chief executive this week to underwrite that.

Our energy efficiency grant is up to €10,000. Some of the money businesses will get from the power up grant and the previous increased costs of business grant can be used because the portion of 25% is only required now of that €10,000 in capital costs. I have seen real-life examples of this. We are talking about lowering the cost base of business. If a business upgrades its LED lighting, refrigeration or dishwashers for energy-efficient equipment, it can reduce its energy bill by €1,500 a month for a small deli, for example. That is very significant and it lowers the cost base.

We hope to get final approval today from the Department of public expenditure and reform for the power up grant. That will be another €4,000 payment directly into the bank accounts of small businesses right before Christmas. On average, small businesses will have received between €8,000 and €10,000 in the past six months. Considering the margin on which some of these businesses operate, many of them would have to amass more than €80,000 in sales to make a margin equivalent to that direct cash intervention. We have a lot more to do. The SME test will stop much of the regulatory burden which has hit small businesses in recent years. Since coming into the Department, I have led from the front on family businesses. I have prioritised them and tried my very best to lower their cost base. We need to work together to give them the tools and make them aware of all the supports that are available.

Robert Troy (Longford-Westmeath, Fianna Fail)
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The power up grant and the money that has been made available this year is similar to the amount the IDA is getting to support multinationals in job creation despite the fact that, as the Minister said, two thirds of employment is in the SME sector. If two thirds of employment is in one sector, why is it getting a similar amount of money to multinationals, which are a very important part of our economy but are doing extremely well? We need to rebalance the supports going into the SME sector.

I raised the issue of sick pay already today. I welcome that the Minister of State, Deputy Calleary, said the Department is exploring how it could be improved and how we can stop the abuse of sick pay. It is an important component of supports to staff but it is putting huge pressure on smaller businesses in particular. This is especially so for businesses which have to meet ratios, such as nursing homes and childcare providers. If one person is out sick, that person is being paid but the business also has to bring in a replacement person to backfill the job. I would appreciate a reply to those two questions.

Peter Burke (Longford-Westmeath, Fine Gael)
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I have really changed the direction of the Department to focus on small businesses. The Deputy can see that from the SME package I brought in and the SME test now having received Cabinet approval such that every statutory instrument, regulation or primary legislation change must have an SME impact assessment. We have put money behind it, with the enormous amount of grant support that is now available to the sector.

I want to be clear that our value proposition to IDA clients is critical to this country. Of every €7 spent in the context of budget 2025, €1 comes from the FDI sector. They are very high-value jobs. The Deputy will be very much aware how important companies like Abbott are in Athlone, Mullingar and Longford. They are very significant employers, with big companies like Ericsson, as well as other companies in Mullingar. They are working so hard to deliver high-value jobs. We must be very careful that our value proposition is competitive to attract more investment in and that they get down to the regions. For every ten IDA jobs created, eight more are created in the wider economy. I met representatives of a small printing company in Ballinasloe that makes the leaflets that are put into the medication for a life science company. That is its main contract. It shows what I am trying to do in closing the eco-cycle. If there is a big FDI company, smaller companies and small family businesses, such as that printing company in Ballinasloe, also benefit.

Robert Troy (Longford-Westmeath, Fianna Fail)
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Perhaps the Minister will answer about the sick pay in the next round. As a person who led trade missions, I concur fully with what he said about the importance of FDI. However, we are spending a similar amount on FDI as on supporting SMEs despite there being a greater number of people employed in our SMEs. We need to increase the expenditure there.

Will the Minister speak about what his Department is doing with the Department of energy and natural resources to ensure we bring down the cost of energy into companies? It is all very well giving supports and grants but we should really be tackling the high cost of energy in order that businesses can get a break on the current high energy costs.

Peter Burke (Longford-Westmeath, Fine Gael)
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It is very difficult to get through everything in a minute. I will make a decision on sick pay before the end of the year. As the Deputy will be aware, having been in the Department when many of the regulations came in, we are trying to take a pace, reduce the burden and put our SMEs first.

On energy, we had a competitiveness summit in recent months. We are directing massive investment in our grid, including through the sale of AIB shares. We will try to put approximately €1.1 billion per annum out to 2050 into our grid to ensure we can get that energy across the country. Four new offshore renewable energy contracts were signed for the east coast and that will be a big help.

We want small family businesses to change the dial. What have we done? There is the energy efficiency grant, with €10,000 on the table together with a toolkit of assessments before that to assist businesses to see how they can lower their cost base. As I said, a deli could save €1,500 on its monthly energy bill. That lowers the cost base. Installing LED lights and upgrading fridges, dishwashers and other kitchen equipment can save a business a lot of money every month. The best way to give businesses money is to not take it off them in the first place. That is what we are trying to do now.