Exporters say guarantee scheme to have no impact
COMPANIES selling goods overseas got a small boost after the Government said a long-promised scheme to guarantee some exports will go live next Wednesday. But exporters gave the scheme a cool welcome and warned the new plan was unlikely to make much difference.
The three-year scheme, which had been previously flagged several times, could benefit up to 1,800 businesses a year and support the creation of 1,300 jobs. It works by promising to repay banks 75pc of a loan to a small exporter if a deal goes wrong.
Up to €150m a year will be guaranteed and the State estimates that the guarantee will cost €6.4m every year. Loans under guarantee can be no more than 10pc of a company's total loan portfolio. Companies can apply for the loans through their own banks.
The Irish Exporters' Association (IEA) said the scheme would probably be too costly for most companies and said it was unlikely to achieve the job expansion targets claimed by the Government.
The association also criticised the 12-month delay to set up the scheme and a 2pc arrangement fee which it claimed was "excessive".
"This is a very disappointing response to one of the most pressing issues for export industry," IEA boss John Whelan added.
The Government admitted earlier that the Coalition's Action Plan for Jobs, which contains a check list of small tasks aimed at improving job creation, had failed in some respects.
The third report on the plan's implementation revealed that various schemes that are important to business have not yet been put into motion.
The government report said Trade Minister Richard Bruton has failed to introduce a promised voluntary code of conduct on payments within the private sector to reduce the current average of 70 days despite consultations with industry groups.
"To date, there have been no substantive developments on the part of industry in relation to this action," the report says.
Other missed targets include a commitment to introduce legislation to improve the legal environment to set up and operate a business, and a commitment to improve the linkages between universities and other third-level institutions and business.