Dáil hears 9,000 small and local businesses in Ireland under threat amid Covid-19

Mr McDonnell says the government's restart grants for small businesses during the pandemic is not fit for purpose, and that the government is "fixated" on multinationals.
Dáil hears 9,000 small and local businesses in Ireland under threat amid Covid-19
CEO of the Irish Small and Medium Enterprises Association (ISME), Neil McDonnell said the consequences for the economy would be severe during the Covid-19 crisis if small businesses are not helped enough.

Up to 9,000 Irish small and local businesses could be lost during the Covid-19 crisis, the Dáil has heard.

CEO of the Irish Small and Medium Enterprises Association (ISME), Neil McDonnell laid out the "dire consequences" that the economy could be facing if small businesses are not helped by the government.

"We surveyed people on sentiment around mortality, in other words how long businesses are going to last on a steady-state basis," he said.

"Optimism is higher in lead up to the June bank holiday weekend than it was in the middle of April. However, if anything close to the 6% that say they're gone within a month, if that was to happen, you could be looking at up to 9000 SMEs."

Mr McDonnell says the government's restart grants for small businesses during the pandemic is not fit for purpose, and that the government is "fixated" on multinationals.

The €250m Restart Grant provides direct grant aid to micro and small businesses to help with the costs associated with reopening and reemploying workers following COVID-19 closures.

"There seems to be a fear and apprehension that providing money and liquidity to businesses is going to be money down the drain. It's going to be money wasted," Mr O Donnell said.

"From our point of view, the provisions of grant assistance are too little, too hamstrung by the T's and C's, we just need simpler access to liquidity.

"There is an additional fixed cost to opening that would not be there if we weren't in a pandemic, which is going to be significant.

"We're saying to the Exchequer, that you the legislators, are far too dependent on this sector to let it go, to let these businesses go under for the sake of a few thousand euro."

The grants are based on rates paid by each firm last year, but in cases where the rate bill was particularly small, a minimum of €2,000 is paid. This classification has cut out swathes of small businesses, who do not have commercial premises.

"The fact that some of the grants are tied to rates, you have a lot of services, what would typically be called blue-collar services, but nonetheless essential services in plumbing, electrics, carpentry, and those services are essential for instance the building industry, they can't access it because it's tied to rates," Mr McDonnell added.

"If you look at the department's own figures the take-up is extremely low and that data would suggest that there's a real problem here in relation to that and particularly the loans and the grants are not fit for purpose.

If you look at the figures from the department last week, it would suggest that in the region of 86 million has been drawn to have been taken in supports to date. If you look at that by comparison with the tax figures coming out of the sector, that's about € 5billion in PAYE, €1billion in USC, € 4billion in PRSI and € 5.7 billion in VAT.

"What has gone into the sector by way of assistance is a drop in the ocean, by comparison."

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