Violet-Anne Wynne (Clare, Independent)
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59. To ask the Minister for Enterprise, Trade and Employment how his Department plans to address the difficulties facing small businesses as costs rise but profits do not; and if he will make a statement on the matter. [43571/24]

Violet-Anne Wynne (Clare, Independent)
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How does the Department plan to address the difficulties facing small businesses as costs rise but profits do not? I ask him to make a statement on the matter.

Peter Burke (Longford-Westmeath, Fine Gael)
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This is a similar question to the previous one. It is important. We are trying to work with family businesses across the country. We brought in the SME package in the first weeks after I was appointed by the new Taoiseach. We are focusing on trying to lower the cost base for so many family businesses. We have brought in initiatives, such as ensuring they have support through energy-efficiency grants and digital grants, reflecting the ambition in the White Paper on enterprise. We are assisting on sustainability and going digital and trying to get to 90% digital intensity by 2030. This is to build new revenue streams for small family businesses.

We have looked at PRSI for lower-paid workers. The study done between our Department and the Department of Social Protection pointed to vulnerability in hospitality and retail. Obviously, 75% of minimum-wage workers are in those sectors. Those companies, the family businesses, need support in employing so many workers in that sector. That is why we have had our second round of the increased cost of business fund. I hope we will get approval today from the Department of public expenditure for the power up grant and will then be able to progress with that €4,000 payment to all businesses in both those sectors before Christmas. That would be very important to them.

There is also the national enterprise hub, which will point people to the approximately 280 supports across 23 Departments and agencies.

There will also be someone on the other end of the phone because I know that for small family businesses time is the most precious resource and we want to assist them in any way we can. I as Minister, along with my colleagues, do not want to see any business suffer or go into liquidation without being able to pick up the phone to get supports from the Department. They are available. Whether a business is a client of an LEO or Enterprise Ireland, we are here to help to ensure it can trade successfully into the future. It is a challenge. I appreciate that, from meeting so many businesses and their sectoral representatives, but working together, we can achieve a lot with the supports that are in place and the new supports that will come together in the context of budget 2025.

Violet-Anne Wynne (Clare, Independent)
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The approval the Minister mentioned would be positive.

A motion was brought forward at Clare County Council recently to request a review of supports for small businesses and highlighting the hospitality sector. I echo that request.

I note that the Restaurants Association of Ireland praised the increased cost of business scheme and the PRSI threshold change, as the Minister mentioned. However, it also said it is insufficient to deal with the increase in the VAT rate. The Government has been adamant that is not something it can achieve, but I wanted to mention it again because it is what I am hearing on the ground. Some 612 restaurants, cafés, gastropubs and other food-related hospitality businesses have permanently closed their doors since the VAT rate for the sector increased from 9% to 13.5% on 1 September 2023.

Peter Burke (Longford-Westmeath, Fine Gael)
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I thank the Deputy again for pointing out the challenges and some of the solutions. I absolutely agree with her that we need to do more. We are clear about that. We are at the end of the lifetime of this Government and it will be up to political parties to bring forward their ideas, reflected in their manifestos, in the weeks ahead and ask the people to adjudicate on what we have done in the past few years.

Front and central is that we have to try to support the backbone of the economy, which is small family businesses. The Deputy is right to point out that hospitality has been vulnerable and we have seen a significant number of closures, but we have also seen new hospitality businesses opening. One of the key things I would love to get across to sectoral representatives is that we need to work with developing businesses. It is easy to point out the number of businesses that have closed without reflecting on those that have opened. Critically, how do we make existing businesses that are going through pressure aware that there are supports, they can change the dial and absolutely change the cost base they are operating in by trying to bring in new energy efficiency measures which can, in the first instance, reduce utility bills. As I said in my earlier contribution, the best way of giving businesses money is not to take if from them in the first place. We have a lot of schemes for doing that and I have done a lot of work in the past three weeks to try to lower the conditions attached to each of them to make it easier for applicants to apply. For SMEs, time is the most valuable resource and we want to support them to get the support they need to trade successfully in the months and weeks ahead.

Violet-Anne Wynne (Clare, Independent)
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The Minister correctly pointed out that businesses, especially those in the hospitality sector, will be looking at all party manifestos in the coming days. As we know, an election is imminent. The Minister also pointed out that small businesses are the backbone of our communities, in particular rural communities. They are very dependent on small businesses. Some 62% of private sector employees in County Clare are employed by small businesses, which is the ninth highest rate in the country. Small businesses are the beating heart and ensure communities can prosper and people can gain employment in their own communities.

KPMG said that budget 2025 is good, but not great, "a feelgood budget, but in the end it has wrought few significant changes".

Peter Burke (Longford-Westmeath, Fine Gael)
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I contest what KPMG said as I have heard many people in the business sector advocate the supports in place, which have been enhanced in budget 2025, especially in respect of innovation and the start-up space. Funding for companies trying to scale has been significant. We have worked to close the bridge with the UK because there is a big divide with regard to capital gains tax and incentives for investors coming into the marketplace. We have done a lot in the innovation space and that is one of the key parts of the SME package. We have strengthened the ambition for tertiary partnerships for companies to innovate and breath life into the White Paper on enterprise, where we have the decarbonisation supports we are trying to work on, for which we have lowered the conditions. We have put the national enterprise hub together, with 280 supports across 23 Departments and agencies, ready to support businesses at the other end of the phone. Also, in the digital space we are trying to breathe life into our ambition to get to 90% digital intensity by 2030.

All those supports are in place and we have to help our SMEs to access them. That is something I call for again. We need sectoral representatives, the Government and chambers of commerce to work together to support businesses to trade successfully and to lower their cost base. It is not a zero-sum game, as I always say. What is good for the worker does not necessarily have to be bad for the employer. We have to work together to unlock many of these challenges. It will be up to political parties, Independent candidates and everyone else to set out their ambition to grow our SMEs into the future, how we do that and the mechanics behind it in the days and weeks ahead.