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Irish Economy Grossly Over Dependent on Multinational Companies following Privatisation Debacle over Decades

September 8, 2018 1 comment

Over Decades, The Irish Economy has been Made Grossly Over Dependent on Multi-national Companies by FF, FG, Lab, PD, Greens. Former Head of the Central Bank, Professor Patrick Honahan has now issued a stark warning to Government Also key public functions have been ceded  to Foreign Private Interests through Privatisation of Key State Companies

The Jig is Up on These Corporate Tax Billions for Ireland as Unfavourable OECD decision is imminent-Irish Independent

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Let the good times roll? State in clover on tax receipts-Cantillion, Irish Times

Cantillion’s discourse below may mislead. The “overhaul of how companies are taxed” has already been commenced by OECD-called Tax Base Erosion and Profit Shifting (BEPS 1).  (See article by Irish Times Economist Chris Johns below)

Because of BEPS1.0  Multi-nationals moved billions from “out and out tax” havens to the semi-tax haven that is Ireland. This has nothing to do with investment in jobs but is all about tax evasion. The Irish government is using the tax windfall to maintain public services at their current deplorable level without taxing the Irish Super-Rich who are dripping with wealth.

https://wp.me/pKzXa-18R

But now the OECD is bringing forward BEPS 2.0 to stop the Irelands of this world benefitting from tax on the profits of multinationals headquartered in Ireland but mainly made from sales in the larger countries. This means that the 6 billion increase in Irish corporation profits tax since 2014 will disappear. Will the government then cut back the public services now being funded by the windfall??? Also, instead of taxing the Irish billionaires they will surely attempt to increase all taxes such as VAT and Income tax on low and middle income earners

Cantillion in Irish Times Business Nov 5, 2019

Let the good times roll? State in clover on tax receipts

Irish Times,Tuesday, November 5, 2019, 05:28

The threat of a no-deal Brexit effectively handed Minister for Finance Paschal Donohoe a free hand to reject all but the most urgent spending demands in last month’s budget. A finance minister’s dream scenario, particularly if the threat fails to materialise.

The other big risk to the public purse was the possibility of a sharp contraction in corporation tax, which the Government has been using to plug holes in its expenditure.

Business tax receipts are inherently volatile because corporate profitabiliy is not linear. Also the global tax system is in a state of flux with the Organisation for Economic Co-operation and Development promising an overhaul of how companies are taxed.(Paddy Healy-Cantillion’s discourse may mislead. The “overhaul of how companies are taxed” has already been commenced by OECD-called Tax Base Erosion and Profit Shifting (BEPS 1). Because of this Multi-nationals moved billions from “out and out tax” havens to the semi-tax haven that is Ireland. This has nothing to do with investment in jobs but is all about tax evasion. The Irish government is using the tax windfall to maintain public services at their current deplorable level without taxing the Irish Super-Rich who are dripping with wealth. But now the OECD is bringing forward BEPS 2.0 to stop the Irelands of this world benefitting from tax on the profits of multinationals headquartered in Ireland but mainly made from sales in the larger countries. This means that the 6 billion increase in Irish corporation profits tax since 2014 will disappear. Will the government then cut back the public services now being funded by the windfall??? Also, instead of taxing the Irish billionaires they will surely attempt to increase all taxes such as VAT and Income tax on low and middle income earners)

Donohoe had predicted that last year’s record €10.4 billion corporate tax take was unlikely to be repeated as it was linked to a once-off payment by a single mutlinational made last November. But he’s been proved wrong. The latest exchequer returns show corporation tax receipts are up again this year, running at a record €6.9 billion for the first 10 months to the end of October.

“At this stage, it wouldn’t be a surprise if figures for the full year were €1 billion ahead of last year,” said Grant Thornton’s Peter Vale. That would net the exchequer more than €11 billion.

Steady progression

Compare this with 2014 when corporation tax receipts for the year were less than €5 billion.

The massive onshoring of assets triggered by a global outcry over multinational tax avoidance instead of being a threat to Ireland has been a boon for the State, even if it has generated negative headlines.

And so the other big threat hanging over the exchequer has failed to materialise, giving the Government’s finances a rosy complexion as it heads into what will probably be an election year. In tax terms, you might say, the Government’s never had it so good.

© 2019 irishtimes.com

 

————————————————————–Chris Johns: Brexit is distracting us from serious risks to Irish economy

Global economic upheavals pose a greater threat to Ireland than anything in the UK

Chris Johns,  Irish Times   03/11/2019 https://wp.me/pKzXa-18R

The problems caused by the activities of foreign multinationals do make headlines and, if anything, are growing

Fantasy Economic Figures: In the second quarter of the current year, Irish investment hit 60 per cent of GDP. Setser (and others) suspect that it was the activities of the likes of Microsoft, who shifted $50 billion (€44.8 billion) in intellectual property assets to Ireland (from Singapore), that account for this apparent investment surge.

Figuring out what all of this means domestically (in Ireland) is hard. A task not made easy by the distortions present in our economic data. The problems caused by the activities of foreign multinationals do make headlines and, if anything, are growing.

The independent and respected American think tank The Council on Foreign Relations last week published a piece of research with the title ‘Ireland’s Statistical Cry for Help’. Economist Brad Setser suggested that our GDP data is now so extreme – strange – ‘that it almost reads like a plea for a new system of national accounts’.

Big tech

In the second quarter of the current year, Irish investment hit 60 per cent of GDP. Setser (and others) suspect that it was the activities of the likes of Microsoft, who shifted $50 billion (€44.8 billion) in intellectual property assets to Ireland (from Singapore), that account for this apparent investment surge. Health warnings about Irish GDP data have been around for some time and are still clearly required. Setser concludes that, such are the distortions in tech profits, the proposed OECD BEPS 2.0 corporation  tax reforms don’t go far enough.

Tech and related profits are mostly responsible for America’s surging stock market. They are, in part at least, the flip-side to puzzlingly low wage growth. If your economy doesn’t have many tech companies (much of Europe), you don’t have much growth. Central banks are struggling to deal with this changing economic landscape. Finance ministers want to tax those profits so they can make up for the spending shortfall caused by those too-low wages, thereby taking some of the burden off those central bankers.

How all of this plays out over the next few years will be much more important, even to Ireland, than anything that happens in the UK.

—————————————————————Ireland Still Betting The Farm on Foreign Direct Investment

Redundancies at Molex and Novartis are a brutal consequence of our reliance on FDI

Ian Guider, Sunday Business Post, Nov 3  https://wp.me/pKzXa-18R

“The trouble is that we have bet the whole farm on foreign direct investment (FDI). As welcome as the investment has been, it has left the economy potentially at the mercy of decisions made elsewhere and vulnerable to economic shifts and swings that are out of our control.

Last Thursday, the OECD published a review of state policies towards our domestic small and medium-sized companies. It recommended that the government target a 50 per cent increase in the number of these firms and ensure that they are focused more towards exports.

When you exclude retailers and the big beef and dairy companies, it is hard to see how Ireland could produce another internationally focused large company. There are a few notable exceptions, but where is the next generation of companies like CRH, Kingspan, Kerry Group and Glanbia? These are true Irish corporate giants that employ thousands of people in this country and tens of thousands more abroad.”

The decisions by Molex and Novartis to whittle down their Irish operations by 800 jobs in the space of 24 hours brings to mind the worst days of the economic crash of a decade ago, when factories and offices were closing their doors on an almost daily basis. By pretty much every measure, the Irish economy is in much better shape than it was back then. Yet the future for many employed in multinational manufacturing companies remains uncertain.

There is a distinction between what has happened at Novartis and Molex. The pharmaceutical industry is cyclical. Some companies have strong pipelines of new drugs and treatments, which mean they are in expansion mode. Others have drugs coming off-patent, and are looking to cut costs. This has happened several times in Ireland in the last number of years.

Novartis workers in Cork should be familiar with the patterns of their industry. In 2011, BioMarin acquired a manufacturing facility that was put up for sale by Pfizer as part of a restructuring of its operations in Ireland. Earlier this year, GlaxoSmithKline sold one of its Cork sites to Thermo Fisher Scientific. The move by Novartis is clearly painful for the 300 staff and their families. However, it will not be the last time this occurs in the Irish pharma industry.

The announcement that Molex plans to close its Shannon site entirely next year has significant differences to what is happening at Novartis in Cork. What is driving Molex out of Ireland is not a switch to a low-cost economy, or a whim of its owner Koch Industries, but the simple fact that the electronic components it makes have reached the natural end of their life. Time and technology have caught up with Molex.

How many more of these manufacturing companies that came to Ireland in the 1970s and 1980s are still around? Quite a few, is the answer. And many are located in areas where the type of well-paid jobs offered by multinationals are difficult to replace.

The problem for Ireland now is not that we are competing with low-cost and low tax economies that are seeking to lure foreign investment away, but that these jobs are disappearing as the digital revolution simply does away with them.

The remarkable success of the IDA in recent years, which has resulted in a record number of people now employed in multinational companies, has masked the vulnerabilities that many traditional manufacturing employers and back-end offices face. Those shared services centres, with Irish employees doing things like finance and HR, can simply be replaced with technology. Automation has the potential to deliver a hammer blow to the towns and cities in rural Ireland where many of these jobs are located.

Such risks to employment were highlighted by researchers at University College Cork earlier this year, in a report which estimated that two out of every five jobs could go because of automation. The ten most vulnerable towns at risk were all in rural Ireland.

The government is not unaware of the dangers of the rise of machine learning, AI and automation. This issue was highlighted in the Future Ireland Jobs report, also published earlier this year. It recommended that the state should focus more of its time and energy on indigenous companies to ensure as many jobs as possible are maintained in the face of the march of the robots.

Last Thursday, the OECD published a review of state policies towards our domestic small and medium-sized companies. It recommended that the government target a 50 per cent increase in the number of these firms and ensure that they are focused more towards exports.

The trouble is that we have bet the whole farm on foreign direct investment (FDI). As welcome as the investment has been, it has left the economy potentially at the mercy of decisions made elsewhere and vulnerable to economic shifts and swings that are out of our control.

When you exclude retailers and the big beef and dairy companies, it is hard to see how Ireland could produce another internationally focused large company. There are a few notable exceptions, but where is the next generation of companies like CRH, Kingspan, Kerry Group and Glanbia? These are true Irish corporate giants that employ thousands of people in this country and tens of thousands more abroad.

Has a generation of Irish business leaders simply decided that they are better off working for multinationals? Is it easier to sell the small or medium enterprise to a foreign company at an early stage?

The trouble with FDI is that it is alluring, especially for the government. I’ve lost track of the number of announcements by multinationals that have had a government minister at their office opening. In addition to jobs, these companies provide billions of euro a year in corporation tax receipts. It might be hard right now to envisage their disappearance. Of course, the same could probably have been said about Molex, or in years gone by about Digital or Gateway – or dozens more whose names are now long forgotten.

As Molex employees contemplate a disrupted future, it is time to reassess our over-reliance on multinationals and FDI. Molex will not be the last company to pull the plug. FDI is a policy that has served the country well for 50 years, and certainly aided the recovery. But its dominance of the economy should not be left unchecked.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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The Finance Minister Paschal Donohoe has warned “disruptive” change (BEPS2.0) is coming to Ireland’s corporation tax.

Jack Quann, Newstalk  https://wp.me/pKzXa-18R

He was speaking at an IBEC event in Dublin on Friday night.

On Friday, Mr Donohoe said: “The ongoing work at the OECD (BEPS2.0) will result in further substantial alterations to the international tax architecture.

Ireland’s corporate tax rate, of 12.5%, is well behind others such as the UK (19%), Italy (24%), the USA (27%) and France (33.3%).

In 2013, OECD and G20 countries developed a package of 15 measures to tackle avoidance caused by tax base erosion and profit shifting (BEPS1).

More than 130 countries are collaborating to put an end to tax avoidance strategies that the OECD said “exploit gaps and mismatches in tax rules to avoid paying tax.”

It said BEPS practices cost countries between US$100bn (€91.3bn) and US$240bn (€219bn) in lost revenue annually.

On Friday, Mr Donohoe said: “The ongoing work at the OECD will result in further substantial alterations to the international tax architecture.

“The challenge before us is to build a global and robust tax architecture that works for all into the future.

“Make no mistake, whatever emerges from the discussions at OECD will be disruptive.”

——————————————————-Multinational Closures

Gross over-dependence of Irish Economy on Multi-nationals Coming Home to Roost  https://wp.me/pKzXa-18R

Don’t Believe the “Explanations”. The real question is why products being manufactured in Ireland but coming to the end of their usefulness were not replaced in Ireland by manufacture of new  products. Why are some Novartist “Global Services” being moved to Asia?

The answer is the imminence of BEPS2.0  Details at the link.

Base erosion and profit shifting – OECD BEPS

https://www.oecd.org › tax › beps

 International collaboration to end tax avoidance

Under the OECD/G20 Inclusive Framework on BEPS, over 130 countries are collaborating to put an end to tax avoidance strategies that exploit gaps and mismatches in tax rules to avoid paying tax.

Domestic tax base erosion and profit shifting (BEPS) due to multinational enterprises exploiting gaps and mismatches between different countries’ tax systems affects all countries. Developing countries’ higher reliance on corporate income tax means they suffer from BEPS disproportionately.

BEPS2.0

https://www.taxjournal.com/articles/beps-2-0-reshaping-the-architecture-of-international-tax

The OECD’s recently published Programme of work is designed to help achieve consensus on a solution to taxing an increasingly digitalised economy. The concepts now being worked on represent a radical reshaping of international tax for all multinational enterprises, not just digital companies. As with the OECD’s February consultation, the latest proposals still rest on two ‘pillars’ but they have been subtly recast: the first pillar is a reformulated proposal to re-allocate taxing rights to the jurisdiction of users and/or consumers (i.e. the ‘market jurisdiction’); and the second pillar is a newly styled ‘GloBE’ proposal which seeks to address remaining BEPS risks or profit shifting to entities that are subject to no or low taxation. The aim is still to reach a global consensus-based solution by the end of 2020, which will require the outlines of the architecture to be agreed by January 2020.

 

Dismay as up to 320 people set to lose jobs at Novartis in Cork

Inational collaboration to e

Barry Roche

 

Irish Times,  Wednesday, October 23, 2019, 10:44

Trade union and business leaders have reacted with dismay to the news that pharmaceutical giant Novartis is to lay off up to 320 of its 550 strong workforce in Co Cork as part of a global restructuring.

Workers at the Ringaskiddy campus, which comprises both an Active Pharmaceutical Ingredient manufacturing unit and a Global Service Centre involved in procurement, were called to a meeting at the plant on Wednesday morning.

Novartis Ringaskiddy Ltd Managing Director, Shane Relihan broke to the news to staff that the company was seeking 240 redundancies in the API plant and a further 80 in the Global Service Centre.

Mr Relihan said that the redundancies will start to take effect from mid 2020 with 80 redundancies at the Global Service Centre expected to be completed by the end of 2021.

The redundancies at the Global Service Centre, which currently employs 180 people, will result from the relocation of a number of global service roles from Ringaskiddy to centralised operations centres in Europe and Asia.

Meanwhile, the 240 redundancies at the API plant will stem from the decision to consolidate its API manufacturing operations at the campus, resulting in the closure of one of its production buildings by mid-2022.

Novartis, which was formed through the merger of Sandoz and Ciba-Geigy, manufactures drugs for hypertension and cardiac problems at the Ringaskiddy plant which has benefitted from €850 million in investment over the years.

The Cork plant is one of 60 sites worldwide within Novartis Technical Operations division and the company is currently carrying out a review with a focus on centralisation to optimise capacity and lower costs through simplification.

Mr Relihan said it was important to stress the decision to seek the Ringaskiddy lay-offs was not a reflection of the performance of the workforce who have worked hard over the past 25 years to supply customers and patients.

“Novartis will work closely with our employees and representative groups to support everyone during this period ahead, providing severance packages and outplacement services.

“We will also work with our industry partners across the pharmaceutical industry cluster here in Cork to identify future employment opportunities in the area,” said Mr Relihan.

Most workers declined to speak to the media as they left the plant following the briefing.

‘Bit of a shock’

However, one employee, Joe Barry from Glanmire said that news of the layoffs came as a shock to most staff at the plant.

“I just got a text yesterday to day there was bad news being announced – we knew there were changes coming down the line and things were changing in there but it was still a bit of a shock,” he said.

“It’s kind of a global thing – it’s the way the API pharmaceutical companies are going really – it’s all about smaller volumes and contract out the work because they say it’s cheaper to do it somewhere else.”

Mr Barry said the workforce knew that Novartis had been trying to sell the plant but many felt the decision by the company to recently invest in the Ringaskiddy campus had led many to assume everything was secure.

“I suppose it’s like factories down the years, Fords, Dunlops, gone with a swipe of a pen – we still have to see how it pans out – there are a lot of companies around the place recruiting so hopefully people will pick up something.

Joe Barry from Glanmire, who has worked at the plant for 18 years, leaving Novartis in Ringaskiddy Co Cork after hundreds of job losses were announced. Photogrpah: John Allen/Provision

“But the age demographic may have something to do with that – we have an older demographic- a lot of fellows are here 25 years or more but maybe we might have a corporate change of policy, you have to look on the bright side.”

Siptu pharmaceutical sector organiser in Cork Alan O’Leary said the union was aware that Novartis was carrying out a review of its manufacturing operations including the fact it was seeking to sell the Ringaskiddy plant.

“We were formally told that the company was potentially selling the site and selling a manufacturing API plant can take time – it can take three or four or five years, so people never thought there was anything imminent.”

Mr O’Leary said that while Novartis was saying that the decision would have no immediate impact, it was creating huge uncertainty for workers – we are hoping to work with the company to try and minimise the cuts obviously.”

Major player

Mr O’Leary said Siptu, which represents 300 staff at the campus, would focus first on saving the jobs but if there are to be redundancies, the union would then work to ensure they were on a voluntary basis.

Cork Chamber chief executive Conor Healy expressed disappointment at the news, saying Novartis had been a major employer in Ringaskiddy for over 25 years and a major player in helping Cork establish a reputation as a major pharma centre.

“Our immediate thoughts are with the impacted employees and their families and we encourage the State agencies to work with Novartis and the employees to ensure that all available reemployment opportunities are identified

Tánaiste and local Cork South Central Fine Gael TD Simon Coveney said the announcement was a “significant blow” and would be “very difficult for the highly skilled workers” and their families.

“I’ve spoken to the Minister for Business, Enterprise and Innovation, Heather Humphreys, as well as the IDA to ensure all available supports from state agencies are now open to the staff affected by this Novartis announcement,” he said.

“The staff are highly skilled in the competitive pharmaceutical industry and the state agencies will use the 3-year timeline laid out by Novartis to work with the company and the workers to protect employment.”

Fianna Fáil leader and fellow Cork South Central TD, Micheál Martin said that Novartis had become one of the biggest employers in Ringaskiddy since the 1990s and the jobs cut announcement was “devastating” for the region.

“The job losses are particularly disappointing as Novartis in Cork was high-end manufacturing and I hope all efforts are made by government and the IDA to prevent as many job losses as possible,” he said.

“Every effort should be made to relocate those that lose jobs and to seek an alternative company to invest. Extra efforts have to be made in the far more competitive environment globally.”

“It is important now, that management engage with staff to outline a clear picture for those who face into these jobs losses and that supports from the organisation and the government are provided immediately.”

Minister for Business, Enterprise and Innovation, Heather Humphreys said she was shocked by the news and said her department had received no notification of the announcement despite being in close contact with all multinationals.

“We didn’t have any notice of this ….. sometimes decisions are made in boardrooms, not in Ireland and these decisions have an impact on Ireland and on the jobs here. Ultimately this is a decision for the company.”

Ms Humphreys said she was “extremely disappointed”, particularly following so soon after the news from Molex in Shannon in Co Clare that it is to close with the loss of over 500 jobs.

“The reality is that Ireland is a very open export-orientated economy, and we are operating in a competitive global market and this can sometimes mean that decisions taken by firms abroad can impact on their operations here.”

© 2019 irishtimes.com

 

 

Cork and Clare job losses mark a ‘bad day for Munster’ – Heather Humphreys

Gordon Deegan, Marie O’Halloran

Irish Times, Wednesday, October 23, 2019, 19:50

The loss of 820 jobs at two multinational companies in counties Cork and Clare represented a “bad day for Munster”, Minister for Business Heather Humphreys said.

Speaking to reporters in the Shannon Free Zone in Co Clare, where electronic and plastic components manufacturer Molex is to lay off 500 staff, Ms Humphreys said she has received no briefings that suggests other large-scale job losses were coming down the line.

Separate plans to make 320 staff at pharmaceutical firm Novartis in Ringaskiddy, Co Cork were announced on Wednesday.

“This is a bad day for Munster – there is no doubt about that,” the Minister said. “Two jobs losses, which is disappointing, but nevertheless there are many job opportunities in this area.”

She said she was confident that new jobs would be found for the people affected by the decisions taken by the two companies.

Molex, an Illinois-based group that has operated in Shannon since 1971, said that following a review of the product lines manufactured at its Irish facility, it had decided it would close the plant by the end of next year. It said the majority of products made at the plant had “insufficient financial returns and growth potential”.

Molex workers declined to comment on the closure of the facility on Wednesday. It is estimated that the closure of the plant will result in the loss of annual salaries of €22.9 million from the local economy.

‘A great future’

Ms Humphreys met representatives of stakeholders including the IDA, Enterprise Ireland, the Shannon Group, the Department of Social Protection and third-level colleges to discuss the impact of the decision.

She said a plan would be put in place to help those affected, a skills audit would be carried out among the Molex workers and that a jobs fair will be staged to see what other opportunities were available in the region.

“There are jobs available in this locality… It was said in the room that this has happened at a much better time than 10 years ago when there was huge unemployment,” she said, noting that the jobless rate had fallen from 16 per cent to 5.2 per cent in a decade.

“I am absolutely convinced that there is a great future for this area.”

The Minister said she did not plan to meet the Molex workers during this visit to Co Clare. “I have to be very conscious that this is a very difficult and very emotional day for the workers and I’m sure the last thing they want to see is the Minister for Business coming to see them.”

Fianna Fáil TD for Clare Timmy Dooley said the job losses at Molex would be the equivalent of 7,000 to 8,000 being laid off at once in the Greater Dublin area.

“It is a devastating blow.”

Speaking in the Dáil, Sinn Féin Limerick TD Maurice Quinlivan said the news from Molex marked the largest job loss since Dell closed in Limerick 10 years ago. He said some of “those Dell workers are now caught up in another redundancy”.

He called for EU funding to be drawn down to support workers and said EU officials had described Ireland as “particularly bad at drawing down funds”.

Ms Humphreys said the chief executive of Molex had told her the decision could not be changed and that the Government would seek the best possible support from the European globalisation fund. She said “you don’t rush in to make an application” to the fund but that one would be planned properly.

© 2019 irishtimes.com

 

————————————————————-Sunday Business Post: Paschal Donohoe: Years of Budget Surpluses, created by further increases in Value Added Tax and Carbon Tax, Needed to Avoid Corporation Tax Shock    https://wp.me/pKzXa-18R
Warning comes as OECD proposals risk loss of €1bn a year according to Donohoe

But A Department of Finance analysis has warned of a €6 billion drop in corporation tax revenues if they go back to their 2014 level.

Michael Brennan Oct 13, 2019

Minister for Finance Paschal Donohoe has warned that the state will need to run several years of large budget surpluses to guard against a sudden collapse in corporation tax.

Donohoe’s comments were made after the Organisation for Economic Co-operation and Development announced plans to force tech companies like Google and Facebook to pay more taxes in the countries where they make their biggest sales – which could lose the state €1 billion a year.

A Department of Finance analysis has warned of a €6 billion drop in corporation tax revenues if they go back to their 2014 level.

Donohoe’s warning comes amid growing optimism of a potential breakthrough on a Brexit deal. EU and British negotiators are currently locked in talks on a deal in which the North could remain part of British customs territory but apply EU customs rules and regulatory checks to goods crossing the Irish Sea.

In an interview with The Sunday Business Post, Donohoe said the best way to prevent a “potential future shock” in corporate tax collection was to run budget surpluses.

“If we can work our way through the no-deal scenario, we’ll have an even larger surplus next year. Then we need to keep on running those surpluses to get our debt down, and ultimately they will provide the space that we will need if there is a shock in relation to corporate tax collection,” he said.

According to the Department of Finance’s budget paper on the state’s financial vulnerabilities, around €1 in every €5 collected in tax was paid by the corporate sector, and nearly half of all corporate tax receipts are paid by just ten firms.

“The public finances are now increasingly exposed to a shock to corporation tax receipts, as these revenues have more than doubled in just four years,” the paper said.

Any sudden departure of large corporate taxpayers could lead to job losses, which would cost the state more in social welfare and reduce its income tax receipts.

Donohoe said that a potential budget surplus of €1.2 billion next year – in the event of an orderly Brexit – could lock in a defence against a sudden drop in corporation tax.

“You are on your way to getting the blocks in place to dealing with a resetting of what could happen to corporation tax in the future,” he said.

The Department of Finance has cited the broadening of the tax base as a way to protect against a collapse in corporation tax. But Donohoe would not commit to an increase in property tax as a way of doing this. “I’d point to the base-broadening we’ve already done, I’d point to what we did with Vat and the hospitality and services sector, and the progress we’re making with carbon taxation,” he said.

Donohoe said the political system was able to respond to immediate challenges like Brexit or getting out of the bailout programme. But he said the threat of a corporation tax drop still had to be dealt with, even though it was not immediate and would happen in a number of stages. He said the OECD changes would take “years” to be implemented, but did not rule out asking for a further transition period for Ireland.

“I’m always aware that the period I’m in is the period when globalisation is being restructured. That globalisation is going to manifest itself in a number of ways, one of which will be a new global tax architecture, probably before the mid-2020s,” he said.

—————————————————————-Ireland must prepare for international tax turbulence  https://wp.me/pKzXa-18R

PwC tax policy leader, Peter Reilly

Irish Times,  Tuesday, October 1, 2019,

The OECD Base Erosion and Profit Shifting (BEPS) rules may have been what was sought by participating countries at the outset, but they haven’t delivered the anticipated results when it comes to the share-out of the tax paid by multinational corporations. As a result, the OECD is now looking at the most fundamental revision of the basis of taxation in almost a century.

“Back in 2013, the OECD came out with the BEPS action plan,” says PwC tax policy leader, Peter Reilly. “Many experts thought it was going nowhere and that the OECD would often take several years to gain consensus. But things changed when the politicians got involved.”

Countries were just emerging from a sustained period of austerity at the time and governments were asking why multinational companies were not paying more tax in their jurisdictions.

“Politics started driving the BEPS process at the OECD,” he adds. “In fairness to Pascal Saint-Amans, director of the Centre for Tax Policy and Administration at the OECD, and his team, they did come up with quite a lot within three years.”

What came out of this was the end of tax havens. “Groups, where applicable, were given a few years to move their money out of whichever sunny Caribbean island it was located and to put it in a country where they had real substance. The BEPS process was also very successful in its drive for tax transparency.”

The outcomes certainly favoured Ireland. “This all played into Ireland’s hands,” says Reilly. “We were already transparent and happy with those elements. Our tax regime is well set out in statute and we weren’t a rulings (deals) based jurisdiction. We had a low rate but a wide base. Companies with operations here already had substance in Ireland and were happy to double down and pay the 12.5 per cent Irish rate on a greater portion of their income.”

This meant that companies ended up paying more tax in Ireland, not less. Hence the quite dramatic rise in corporation tax receipts over the past three years.

“The OECD and the politicians gave themselves a pat on the back and moved on when they put the rules in place but then certain larger countries saw they were not getting any more from the tax pie, but that Ireland was,” says Reilly.

“We are in the era of results-based policy making; if you don’t like the outcome the first time, you have another go. It’s now not about companies paying their fair share, it’s about countries getting what they think should be their fair share of the global tax pie. That has led us on to what is effectively BEPS 2.0. While the digital world has driven the changes, they will impact all companies and not just highly digitalised ones. It is the biggest change in international taxation in the past 50 to 100 years. It will change the fundamental basis of taxation.”

At present companies are taxed based on the location of the functions performed, the assets used, and the risks assumed. “The digital world means companies are able to do business in a different way,” Reilly explains. “They are able to move their supply chain around and sell into major markets without having any significant presence in them. That has led to countries like France and Italy saying companies are exploiting their market without paying enough, or any, tax and they want a bigger slice.”

Fundamental change is required if the balance is to be tilted in that direction. “The OECD is asking if markets can be added to functions, assets and risks, and thereby allocate a value to the market,” says Reilly. “We already know the answer as it is a politically driven process. The big question though will be how much should be allocated to the market – the word “modest” has been used by the OECD, I’ll be really interested to see what this means.”

Minimum tax

The other proposal under consideration is for a minimum tax on corporations. This would mean that companies would be subject to a minimum rate of tax regardless of the jurisdictions they are located in. “Germany is really in favour of it,” Reilly notes.

This is a matter of concern for Ireland. “There will be potholes in the road, but we can negotiate them,” he says. “There has been a huge increase in corporation tax receipts over the last three years. These receipts may fall as a result of a shift to a markets basis and the introduction of a minimum tax but at least it would be off a much higher base. The companies here are committed to Ireland and we are doing everything that is asked of us in terms of international tax reform by our international partners.”

The biggest worry is the minimum tax, both the rate and the base. “One of the things we have is the 12.5 per cent rate and we don’t want that eroded in any way,” he points out. “If the minimum tax is set at 15 per cent, with no deductions for R&D or other incentivised activities, that would be very bad news for Ireland.”

And events are moving fast. “The OECD is undertaking an economic analysis to see if their plans make sense and they say that will be complete this year. We will have more of an idea of where it’s going, and when, by October or November. That’s when we will see if there is political agreement. They say it will be finalised by the end of 2020, that’s an incredibly tight timeframe. It could all be a reality within the next four or five years. That’s a very significant change for companies to get their heads around in a relatively short period of time. They need to prepare themselves for that change.”

The signs from the politicians and the world’s leading economies point to these new tax rules becoming a reality within the next four years and everyone must prepare for that, but there are still issues to be dealt with and delays cannot be ruled out.

For more information, visit pwc.ie

———————————————————–Fintan O’Toole: Ireland’s Apple appeal is a disastrous miscalculation https://wp.me/pKzXa-18R

We are fighting in the last ditch to defend the indefensible. We are hoisting our Tricolour alongside the skull-and-crossbones of global tax piracy.

Last week we learned from the International Monetary Fund that nearly two-thirds of Ireland’s much-trumpeted foreign direct investment, amounting to $500 billion, is “phantom”, which is to say it is merely money moving through shell companies to avoid taxation (and is not involved in job creation in Ireland-PH).

Fintan O’Toole, Irish Times,Tuesday, September 17, 2019,

There is something gothic about the Irish economy: ghosts, shadows, phantoms. For years after the great crash of 2008 its iconic image was the eerie spaces of the ghost estate, the half-finished houses looking like the ruins of a collapsed civilisation. Every so often the Central Bank issues anxious bulletins about the number of “shadow banks” based here, chimerical entities that are not banks but engage in “bank-like activities”. They hold assets (mostly for multinational corporations) many multiples of the size of the real Irish economy. In 2017 the Central Statistics Office calculated that there was €2.8 trillion flitting around in these shadows – that’s €2,858 billion. And last week we learned from the International Monetary Fund that nearly two-thirds of Ireland’s much-trumpeted foreign direct investment, amounting to $500 billion, is “phantom”, which is to say it is merely money moving through shell companies to avoid taxation.

And if you mess around with phantoms, they will come back to haunt you. Today, the European Union’s General Court (the second-highest judicial body) will begin to hear the appeal by Ireland and Apple against the ruling by the European Commission in August 2016 that the tech giant should repay €13 billion plus interest (€14.3 billion in all) given to it by the State in allegedly illegal tax breaks. This appeal is a disastrous miscalculation by the Government. At a moment when Ireland has never been more in need of solidarity from our EU partners, we are fighting (as Boris Johnson would say) in the last ditch to defend the indefensible. We are hoisting our Tricolour alongside the skull-and-crossbones of global tax piracy.

Not about tax

This – in spite of all the spinning – has nothing to do with Ireland’s right to charge a low 12.5 per cent corporation tax rate. Apple Sales International paid an effective tax rate that declined from 1 per cent in 2003 to 0.005 per cent in 2014. Strictly speaking, this is not a tax case at all. The ruling by the formidable commissioner Margrethe Vestager relates to competition policy and the contention that this special tax arrangement for Apple was an illegal State aid to a private company. But those paltry rates are shameful, not just because they distort competition between corporations, but because they attack the whole basis of civilised democracy: fair taxation.

And because they draw the State through the looking-glass into a world of pure fiction. The State colluded with the greatest work of Irish fiction since Ulysses. In the commission’s words, it “endorsed a way to establish the taxable profits for two Irish incorporated companies of the Apple group (Apple Sales International and Apple Operations Europe), which did not correspond to economic reality”. Almost all profits on sales recorded by these two companies were internally attributed to a “head office”. But these “head offices” existed only on paper and could not have generated such profits. We went along with the ghost story that these “head office” profits existed in some fourth dimension of time and space, able to hover without touching down anywhere at all and thus (this being the point) not subject to tax in any country.

This is just wrong. It corrupts truth. And it is not a victimless wheeze. To add another layer of gothic imagery, it is vampiric. It is precisely this collusion of governments in corporate tax avoidance on a staggering scale that is sucking the lifeblood out of public services across the world and creating gross inequality by channelling almost all the new wealth being created towards the top 1 per cent of the population. These conditions lie at the heart of the current crisis of liberal democracy – you can’t sustain the illusion that we all matter equally when the wealthiest corporations can opt out of the obligations of taxation that apply to ordinary hard-pressed citizens. And Ireland is suffering the blowback just like everybody else: Brexit is its most obvious manifestation in our neighbourhood. We cannot poison the well and expect to keep drinking the clear, clean water of democracy.

Disgracing ourselves

Either Apple had a special deal in Ireland, which is illegal, or it didn’t – in which case its scandalous arrangements were available to everyone. Either way, this is bad. But the Government admits nothing. It deliberately defied EU law and had to be ordered a second time to collect the money from Apple. As of last March, the State had paid €7.1 million to lawyers to fight for Ireland’s sovereign right to help the world’s richest corporation make stuff up and avoid taxes – presumably the final bill will be much higher. All of this while trying to persuade the world that, while we may have done bad stuff in the past, we are now going clean. Our message: we didn’t do it but we’re not doing it any more.

It is not too late to stop disgracing ourselves. The Government should instruct its lawyers to stand up, withdraw the appeal and apologise to our neighbours. It should make a clear commitment to bring corporate taxation out of the shadows and to banish the phantoms. And then it should begin an overdue national conversation about how we exorcise the ghosts that haunt our claims to be decent global citizens.

© 2019 irishtimes.com

 

—————————————————————————————————————–The Jig is Up on These Corporate Tax Billions for Ireland as Unfavourable OECD decision is imminent-Irish Independent

Richard Curran: ‘Time is almost up for corporate tax windfalls we grew to bank on’  https://wp.me/pKzXa-18R

Disaster: Corporation tax has generated huge revenues but an abrupt ‘supernova’ could see Ireland lose out  Richard Curran, September 12 2019

The tens of billions in intellectual property that has moved to Irish registered companies is not creating commensurate jobs yet forms some of the basis for our surging corporate tax take.

Surely it should have been used to fund a standalone rainy day fund or pay for genuine once-off investments like broadband or the National Children’s Hospital.

 

Ireland’s corporation tax windfalls of recent years are being seen as an increasing problem. How can landing a multi-billion euro windfall be seen as a problem as opposed to a stroke of luck, you might ask?

The cause for concern is that they are not being treated as a “windfall” or a “stroke of luck” but as something that is becoming an integral part of the exchequer’s source of revenue every year.

This becomes a problem if the extra corporate taxes received in recent years dry up. Historically the corporate tax take represented 13pc to 15pc of the overall tax receipts. In recent years it has climbed to 18pc to 20pc.

Last year corporate taxes amounted to more than €10bn. For the first eight months of this year they were €4.9bn, around half-a-billion euro more than last year.

Few saw it coming that our corporate tax take would begin to sky rocket around 2015. It has doubled since then. Given that 40pc of it comes from a relatively small number of multinationals, there is always the possibility that it could fall through the floor and return to 2014 levels. If it did, the exchequer would find it had a €5bn hole in the books.

Former Central Bank governor Professor Patrick Honohan has believed for some time that Ireland’s ability to attract multinational investment on the back of low corporate taxes is no longer a sustainable model. This view is widely shared.

But when I spoke to him last Saturday on ‘The Business’ on RTÉ Radio One, he went further. He said it could end abruptly like a “supernova explosion”.

“This is not really a sustainable system”, he said. “It has generated huge tax revenues in the last few years. It might be like the end of one of these stars that has a supernova explosion towards the end of its life.”

Finance Minister Paschal Donohoe acknowledges this risk and says that is why he has been broadening the tax base through things like higher Vat on hospitality and changes to stamp duty and commercial property tax.

Prof Honohan’s take is that we didn’t see the rapid increase in the corporate tax take coming and it could just as easily vanish. What might the trigger be for such a supernova explosion?

There is a global effort to reduce corporate tax avoidance and get large corporations to pay more tax. Within the EU, the French in particular have proposed things like a digital tax and other measures which would see more tax paid in the country in which consumers purchase online goods and services.

The Irish Government has handled this threat well. It has referred everything back to the OECD which is undertaking a major programme looking at what it calls base erosion and profit shifting. Our Government knows that by sticking with the OECD, instead of just the EU, a wider selection of views will be taken into account, including those of the US, where many of the tech companies are based.

Being good corporate citizens by closing down unfair tax loopholes is one thing, but shooting ourselves in the foot because the investment just goes somewhere else is another.

However, there are a couple of developments that now suggest the outcome of the lengthy OECD process might not go as favourably as Ireland would have liked.

Pam Olson, a senior US-based tax consultant with PwC, said during the week that a global agreement through the OECD now looks more likely. The OECD is aiming to reach a political agreement on a major reform of corporate taxes by the end of this year, with the final details worked out next year. The latest proposals threaten Irish tax policies by trying to shift taxing rights to major markets and away from countries like Ireland where European headquarters are registered. This could result in multinationals paying less tax here. Another part of the proposals is about imposing minimum tax on corporate profits at a level yet to be decided. Depending on where that lands it could, in theory, threaten our 12.5pc tax rate.

Ms Olson went as far as saying that countries like Ireland may have to argue that aspects of the proposal are an “affront to sovereignty” because traditionally countries set their own tax rates.

This won’t be a threat to sovereignty because nobody has the legal right to end our 12.5pc tax rate. The danger for Ireland comes from the political pressure to accept the final proposals that may be in the report.

Ireland cannot veto such a plan and others could go ahead without us, making Ireland look extremely isolated on what is increasingly seen as a social and moral issue.

Mr Donohoe has batted back EU concerns from the likes of France and Germany by saying it would be best to deal with this problem through the OECD. It then becomes much more difficult to reject an outcome to the OECD process even if it doesn’t appear to go as we would have liked.

A recent study by the IMF and the University of Copenhagen found nearly 40pc of world Foreign Direct Investment (FDI) – worth a total of $15tn – “passed through empty corporate shells” and is therefore what it called “phantom” capital designed to minimise companies’ tax liabilities, instead of going to productive activity. This activity is of course productive for the accountancy and legal firms that set up the structures, but it isn’t doing much else. The authors of the study, Jannick Damgaard, Thomas Elkjaer and Niels Johannesen, told the ‘Financial Times’ these were vehicles for “financial engineering”.

Ireland was not the biggest culprit according to this study, but it features prominently.

It concluded that nearly two-thirds of Ireland’s inward investment is “phantom”.

The issue here relates to what constitutes inward investment and what constitutes a “tax haven”. Ireland is not Luxembourg and tech multinationals employ a lot more people in Ireland in productive activities than they do in Luxembourg. But the tens of billions in intellectual property that has moved to Irish registered companies is not creating commensurate jobs yet forms some of the basis for our surging corporate tax take.

The surge in the corporate tax take of recent years is under threat. It might not just peter out but suddenly switch off if new tax arrangements go against us. Pressure from the EU will be immense especially after the unprecedented support from European capitals on Brexit.

Our 12.5pc tax rate won’t be abolished but it isn’t the real problem. The real problem has been the other ancillary tax benefits on things like intellectual property. Several of the offending Irish tax structures have been abolished but the corporate tax haul keeps coming.

The Government can argue the extra money is being used to fund capital spending rather than current expenditure. Given that we must operate within EU budgetary rules, the extra cash helps us achieve budget surpluses or reduced deficits and therefore it is going into the overall exchequer kitty.

Surely it should have been used to fund a standalone rainy day fund or pay for genuine once-off investments like broadband or the National Children’s Hospital.

Building roads and even schools is part of the ongoing capital requirements of a country with a growing population and should be funded from sustainable sources.

The jig is up on these extra corporate tax billions.

 

 

 

————————————————————————————————————————————

Billions of euro in corporation tax ‘could disappear like a supernova explosion’-Professor Honahan

Brian Hutton,  Saturday, September 7, 2019  https://wp.me/pKzXa-18R

Billions of euro pouring into the public purse from corporation tax could end abruptly like a “supernova explosion”, former Central Bank governor Patrick Honohan has warned.

Days after the latest exchequer figures showed another record tax take expected this year on the back of an ongoing windfall from businesses, Mr Honohan said the Government should not be relying on it.

“This is not really a sustainable system,” he told RTÉ Radio’s The Business.

“It has generated huge tax revenues in the last few years. It might be like the end of one of these stars that has a supernova explosion towards the end of its life.”

Mr Honohan said he felt like “the little boy with the finger in the dike” cautioning that the flood of corporation tax receipts would not last in the years to come.

Asked by presenter Richard Curran if it might “just fall off a cliff one year”, Mr Honohan replied: “Yes, I think so.”

Exchequer returns for the eight months to the end of August this year, published during the week, show corporation tax has generated a record €4.9 billion so far this year.

This was €314 million or 6.8 per cent ahead of the Department of Finance’s own projections. It was also more than half a billion euro up on last year.

Mr Honohan said he didn’t think the collapse in corporation tax was going to happen next year but warned it can happen suddenly and unexpectedly, adding that no-one predicted the “huge explosion of tax revenue” in 2015.

Corporation tax receipts have more than doubled since then, amid a huge transfer of multinational assets to Ireland in the wake of a global clampdown on tax avoidance and increased corporate profitability generally.

They generated over €10 billion last year.

About 40 per cent of it comes from just a handful of firms, thought to include tech giants Apple, Microsoft, Dell, Google and Oracle.

The State’s independent spending watchdog the Irish Fiscal Advisory Council has criticised the Government for using the windfall to plug holes in the health budget.

————————————————————–Flow of Multi-National Taxes to Irish Government to Dry Up

David Chance: ‘Haven or not, the State faces an inevitable day of reckoning on tax’  https://wp.me/pKzXa-18R

“The Minister of the day may then be faced with the unenviable task of explaining that other taxes will have to make up the shortfall, potentially at the same time that it has to sell a programme of “green taxes” to the population as part of the fight against climate change.” 

David Chance, Irish Independent,September 4 2019

Another week, another publication that groups this country in with tax havens which have received trillions of dollars in investments that largely reflect efforts by companies to cut their tax bills.

The timing is bad. The US and France are this week thrashing out a digital tax deal between them and in Brussels a new European Commission is being formed and briefed by officials.

Here, the Government insists the bad old days of the “double Irish with a Dutch sandwich” are gone and that it is working with others on fairer global rules.

It is correct to say that a small economy like Ireland with few natural resources needs to compete with much larger economies so it can prosper.

To some extent, the paper published yesterday by two economists from the International Monetary Fund (IMF) and a third from Copenhagen University reflects past practice and it fails to capture how much real investment has been made here, including in very real jobs.

But the corporation tax issue isn’t going away. The ground is shifting, potentially quite quickly.

In May, Finance Minister Paschal Donohoe – fresh from a meeting of Organisation for Economic Cooperation and Development in Paris – bowed to the inevitable on international tax rule changes with a speech accepting that Ireland will be affected by the changing tax dynamics.

That will help retain friends in Europe. Even so, Minister Donohoe remains opposed to what many observers say is the single most significant measure that would help some of the poorest countries in the world, a minimum effective tax rate.

That measure would enable poor nations to generate revenues of their own to fund the fight against HIV, for example.

Last week the Minister once again expressed his “deep scepticism” about the idea.

The effect of all this will be a more difficult task for Minister Donohoe or his successor if and when the flow of corporate profits through Ireland is staunched, and the resulting tax take dries up, as the Irish Fiscal Advisory Council and others have warned.

The Minister of the day may then be faced with the unenviable task of explaining that other taxes will have to make up the shortfall, potentially at the same time that it has to sell a programme of “green taxes” to the population as part of the fight against climate change.

 

———————————————————-Replies to This Post And Discussion Below

The Stuff of Nightmares for Ireland—–Ray Basset, Sunday Business Post, June 9,2019  https://wp.me/pKzXa-18R

If the international climate changes and these (multinational) companies no longer feel comfortable here, we will be left with precious little else.

 A future trade deal between a fully independent UK and the USA, coupled with trade wars between Washington and Brussels, is the stuff of nightmares for Ireland. Meanwhile, our recent guest, the US president, is leaving nobody in any doubt about his support for a true Brexiteer in power in London.

The London consultancy firm Primary Access, in analysing Irish investment abroad and FDI in Ireland, stated that “Ireland has €93 billion committed to the US, and €88 billion to the UK in direct investment abroad; the comparable numbers for France and Germany are €4.4 billion and €3.1 billion respectively. The same pattern repeats in terms of inward direct investment. The US has €179 billion, and the UK €58 billion invested in Ireland; France has €15 billion and Germany €5 billion.”

As I have stated on many previous occasions, Ireland’s economic connections with mainland Europe are overwhelmingly those of the multinational (mainly American) companies located in the state.

If the international climate changes and these companies no longer feel comfortable here, we will be left with precious little else. In the meantime, our two closest economic and cultural partners, our neighbours to the west and east, who are are also home to the majority of our diaspora, will have moved on without us.

In the Euro elections, the governing coalition parties in Germany recorded a vote which was over 18 per cent below their totals in 2014. The Greens and the Eurosceptic AfD gained ground. In Britain, the Brexit Party emerged as the clear winners, while Marine Le Pen’s group outpolled Macron’s party in France. In Italy, the LEGA under Salvini stormed to victory and the left-wing pro EU Democrats suffered heavy losses.

The four largest countries in the EU all recorded deep disillusionment. Yet to listen to Irish media, or indeed the EU Commission-financed Euronews, one would have imagined a triumphant endorsement of the present set-up.

It is stretching it a bit to claim the Greens as a party who support the status quo. They are long-standing and strong opponents of the militarisation of the EU.

Ireland (North and South) was one of the few countries that experienced a drop in the turnout, which was particularly noticeable in Dublin, where only a 42 per cent poll was recorded. So much for Euro-election enthusiasm.    Ray Basset, Sunday Business Post 09/06/2019

Full Article  https://www.businesspost.ie/opinion/dangerous-time-ireland-partly-fault-445620

Discussion on Above On Cedar Lounge Revolution  https://wp.me/pKzXa-18R

WorldbyStorm  June 9, 2019

Bassett who writes for a Tory and Brexiteer think tank and presented reports that are pro-Brexit amongst other things is not quite the neutral voice he presents himself as. There’s a real disconnect in his idea that international companies will pull out because we’re not falling in line with the UK and US – surely being a predominantly English speaking EU member would offer us opportunities precisely due to the UK leaving the EU? That’s certainly a broader consensus opinion than the one he offers which seems to me to have a vision of Ireland as a sort of mini-Me to the UK.

 

EWI   June 9

That’s certainly a broader consensus opinion than the one he offers which seems to me to have a vision of Ireland as a sort of mini-Me to the UK.

This supine ‘mini-me’ realpolitik mindset seems to be embedded in the civil service culture at the highest level, not just with Bassett (I still can only wonder at the heirs of Desmond Greaves deliberately promoting this mentality, though).

Something established in the Free State civil service from inception, I think. The leftovers of the Dublin Castle regime combined with the sort of ‘tough businessmen’ who formed FG, and who had or have no time for idealism.

Response by Paddy HealyPaddy Healy   June 9, 2019

In response to WBS: I should have made it clear that I do not agree with the solutions Ray Basset advocates to the current US-EU trade and general economic war including US advocacy of Brexit. But i believe the factual material he cites in his article is correct and coincides with material i have been carrying on my blog for some time. He cites the material to support his solution of capitulation to UK interests on Brexit etc. I cite it to underline my view that the only way the interests of the Irish people can be served in the growing huge international storm is the establishment asap of 32-county United  Sovereign Ireland

All World Powers, US, EU, UK , Japan, Russia, China were never going to tolerate a situation where the profits of multi-national companies were realised in full or partial  tax havens. That is why the policy of successive Irish Governments over decades was so treacherous. I do not share the silver lining WBS seems to detect In Brexit in the intermediate term despite any short term apparent  advantages.

ALIBABA    June 9,2019

No surprises, Paddy, to see the Irish ruling class seek to cut better deals for themselves and the MNCs arising from new developments. It’s noteworthy, yes, but nothing of great significance going on here

Response   Paddy Healy   June 9, 2019

This discussion is hugely important!
I believe that current international economic developments driven by the big powers are a huge and imminent threat to the Irish Economy. This is because over decades 26-co governments put the Irish People completely in the hands of others. https://wp.me/pKzXa-xK It is a huge error to dismiss such dangers as “nothing of great significance going on here” Remember that ESRI and Dr John Fitzgerald predicted “a soft landing up for the Celtic Tiger” up to days before the crash.

On this site
Reclaim our Economic and Political Sovereignty  https://wp.me/pKzXa-xK
The statement of Seamus Healy TD in the Dáil over 3 years ago is being proven more correct every day. He said: “The wheels are coming off the policy of privatising State companies, combined with the over-reliance on foreign direct investment. The interests of the Irish people have been put completely in the hands of foreign agencies, foreign companies and foreign governments.”
Paradoxically, the fact that tax in each country is under the control of that EU member state is the problem. Germany, France et al can change their own internal tax systems in such a way that Ireland’s retention of the 12.5% will be totally ineffective!
A large proportion of multinational production in Ireland is sold in EU countries. That is why they are based in an EU country. A key reason that they are headquartered in Ireland is the low corporate tax rate of 12.5%.
Germany and France are threatening to tax in Germany and France all operations of Irish headquartered multinationals, including sales, in Germany and France!!!
That is the meaning of the following sentence in to-days article in Irish Times: “And the news agency Reuters has seen a draft plan that would see member states use a common model to tax large digital companies’ revenues based on where their users are located rather than where they are headquartered, at a common rate between 1 and 5 per cent”
If Ireland does not agree to this, Germany and France can impose the tax unilaterally in their own country and at a much higher rate!
52% of all Irish Tax Revenue arises from the activities of multi-nationals when Corporate tax, Vat, PAYE, USC, PRSI etc are included
Coming on top of the recent changes in the taxation of Multinationals by Trump in the US, The Eu proposals are a huge threat.

Fergus D June 9

Actually those proposals seem reasonable tome. I don’t see how a 32 county republic would solve those problems. There is no national solution to the problems posed by international capitalism, only international socialism! https://wp.me/pKzXa-18R

Response by Paddy Healy  June 9

Fergus! Are these the proposals you mean “are reasonable”; “And the news agency Reuters has seen a draft plan that would see member states use a common model to tax large digital companies’ revenues based on where their users are located rather than where they are headquartered, at a common rate between 1 and 5 per cent”
I have nowhere suggested that these proposals are unreasonable. The reason that they are a threat to Ireland is that successive governments which included FG, FF, Labour, PD, Greens , made the Free State totally economically dependent on a sweet-heart deal with multi-nationals which could not last indefinitely.
Of course, a united sovereign independent Ireland , in itself, would not solve the problems. Only international socialism will. It would only be a first step. But I agree with Connolly that victory in a struggle for a united independent Ireland , would be a blow to imperialist capitalism and a contribution to establishing European -wide socialism.
I also agree with Ernie O’Malley’s conclusion that the only united Ireland that will ever happen is a 32-county Workers Republic.
But that does not mean that in Irish Circumstances, where there is an unresolved national democratic issue, that the objective of a Workers Republic should be counterposed to the united 32-county Republic. The reason we don’t have a 32-county capitalist republic is that the Irish and British capitalists agreed in the Anglo-Irish Treaty that that would be far too dangerous for their interests

Jim Monaghan  Even a 32 county workers republic, isolated, would have to compromise. Only at least continental change could be lasting.  https://wp.me/pKzXa-18R
Response by Paddy Healy: Correct Jim! Even a 32 county workers republic, isolated, would have to compromise. Only at least continental change could be lasting (protection for Irish interests). But of course the fight for a united, Ireland and for a 32-county Workers Republic are integral parts of the fight in Ireland for a socialist Europe including a socialist Britain

—————————————————————————————————————————————–

https://wp.me/pKzXa-18R

During a visit to Silicon Valley in January, the Minister for Finance and his officials told companies such as Apple, Google, Facebook and Intel to make their views known about proposals which he has since admitted will be a challenge for Ireland.

A document marked “confidential”, but provided by the department following a freedom of information request, shows that Donohoe stressed “the importance of companies making their own views known” to the OECD.

As part of this, Facebook and Google jointly met with the OECD secretariat, a representative from Facebook told the minister.

One source said Donohoe and the IDA did not ask companies to relay the government’s position on tax reform but to put forward their own views on the matter.

In a meeting with Google, the company’s vice-president of tax, Ken Hutchinson, “welcomed Ireland’s position on international taxation” and said that he was willing to liaise with the Irish government on Google’s lobbying of the OECD.

The OECD has put forward a series of proposed reforms aimed at tackling tax avoidance by large multinational firms. Donohoe last week told The Sunday Business Post that the government had “very, very serious reservations” about the proposed introduction of a global minimum rate of tax on companies’ profits.

If implemented, the proposal could have major ramifications for Ireland’s attractiveness as a destination for foreign direct investment.

The minister said Ireland would engage fully with the OECD process and added that he believed agreement could be found on much of what was proposed. During his visit, Donohoe met the Silicon Valley Tax Directors group, which represents all the major technology companies, and the OECD rules were under discussion at that meeting.

The group told this newspaper that it was not in a position to comment on the matter. The IDA said it does not comment on its engagements with clients.

Intel said that it did not necessarily lobby on behalf of Ireland, but had made its own “evolving views” known to the OECD and would keep the Irish government up to date on those. A spokeswoman said the company was not sharing its position publicly.

A spokeswoman for Google said: “Over the last decade our global effective tax rate has been 23 per cent and, like most multinationals, we pay the vast majority of our corporate income tax in our home country, consistent with current rules. We’ve said publicly and privately that we’re very supportive of the OECD’s efforts to promote coordinated reform of the international tax system.”

Apple and Facebook did not respond to requests for comment.

 

 ——————————————————-Austria, Italy, Spain and the UK also plan National digital taxes following France’s decision to impose 3% digital tax on internet giants https://wp.me/pKzXa-18R

Irish Times Wednesday, March 6, 2019, Lara Marlowe

France is preparing to impose a 3 per cent digital tax on internet giants with global turnover of more than €750 million and turnover of more than €25 million in France.

The French finance minister Bruno Le Maire presented his draft law on the tax to cabinet on Wednesday and the text will go to the National Assembly in early April. It will take effect retroactively from January 1st this year.

The tax will apply to the French revenues of some 30 international groups and is expected to raise €500 million annually. This compares to the annual €60 million France takes in corporation tax.

EU Commission figures show European businesses pay 23 per cent corporation tax on average, but this drops to just 9 per cent for internet companies, Mr Le Maire said.

“We must tax the Gafa [Google, Apple, Facebook, Amazon] to finance our public services, our schools, our creches and our hospitals. It is a question of fiscal justice,” he added.

The French law is based on a draft directive drawn up by the EU Commission last year. France lobbied hard for its passage, but Mr Le Maire was unable to convince the Republic, Denmark, Finland and Sweden to accept it.

“Twenty-three out of 27 [EU)]states support it,” Mr Le Maire told a press conference. “But 23 is not 27, and the directive requires unanimity. So there will be no accord . . . It is time to move to qualified majority voting in fiscal matters. If we had QMV, the directive would have passed already.”

Three sources

The tax will be charged on three sources of income: targeted advertising of consumers online, connection services that refer internet users to other websites, and the resale of personal data. But online trading, payment services and regulated financial services will be exempt.

The law was announced in December, at the height of protests by gilets jaunes, or yellow vests, who demand higher taxes on business and the rich.

Mr Le Maire said the tax would be collected on the basis of revenue declared by the companies in France, adding that checks would be carried out if necessary. Experts say the internet companies can easily underestimate their French earnings, and that the government will find it difficult or impossible to check them.

France hopes that its law will set the tone for negotiations at the Organisation for Economic Co-operation and Development on a global internet tax. When he visited Dublin on February 26th, Mr Le Maire said, Minister for Finance Pascal Donohoe told him Ireland would work with France in the OECD.

“Work has speeded up because of France,” Mr Le Maire said. “It is always when France shows her determination that things move.”

Austria, Italy, Spain and the UK also plan national digital taxes.

© 2019 irishtimes.com

————————————————————Economic Experts Will Not Foretell New Irish  Economic Crisis Arising From Gross Over-Dependance on Multi-National Companies

Economic “Experts” Will Not Foretell It—Just as they failed to Publicly Foretell the Crash of the Celtic Tiger though they were well aware of the Dangers well in Advance.  https://wp.me/pKzXa-18R

Tom O’Connell, Deputy Governor of The Central Bank To Banking Inquiry: “Too many people were benefitting from the boom time for prudence avoidance … prudent avoidance measures to have been taken. ”

Up to now the deal between International Capitalism and the states representing it and the 26-county capitalists and ruling elite was as follows: Ireland allows increasing domination of its economy by international capitalism. An aspect of this is the privatisation of major public utility companies. The entire ultra-capitalisation of the Irish economy leads to major outflows of profit and interest to international big business. While a significant quantity of these profits and interest payments rest in multi-national accounts in Ireland , they might as well be in the US or elsewhere and can be removed at anytime without Irish permission.. The Irish state applies a very low corporate interest rate on profits to the benefit of the multi-nationals. In return, the multi-nationals headquarter world wide profits in Ireland. The small tax rate on a very large amount of money provides significant revenue to the small Irish state. The Irish state can therefore lightly tax the wealth and incomes of the Irish super-rich  and the Irish capitalists get the same low profits tax rate as the multi-nationals.  But the underline position was that the 26-county state had virtually no economic sovereignty being economically totally in the hands of others who alone could change the rules of the game. Enter growing capitalist crisis and the trade war that usually accompanies a developing capitalist crisis. Trump wants to force the repatriation of taxable profits to lessen taxes on American production. to undercut international competitors. The Franco-German Alliance, which controls the EU, sees the low tax rate on American multi-nationals headquartered in Ireland as an unfair trading advantage for American products imported into the EU. Irish interests are as nothing in this war of economic giants. Irish economic experts must have foreseen this danger. But , just as they did not publicly foretell the fall of the Celtic Tiger, they will not publicly foretell the coming disaster either. The former deputy head of the Central Bank, Tom O’Connell, gave the Banking Inquiry the explanation. He said: “Some say the crisis could not have been foreseen. But that is not true. All the main actors in the Central Bank were aware of the dangers, But so many people were making so much money out of it that no one dared mention them” (Not even David Begg, Gen Sec ICTU-PH)

Dep. Gov. of Central Bank, TOM O’Connell at BANKING INQUIRY

“It’s sometimes said that nobody seemed to know that a property boom or bubble was developing. That’s … that is completely incorrect in my view ——Ireland’s banking and economic crash should never have happened, should never have been allowed to happen, with all the consequences of huge increases in unemployment, rising emigration, enormous debt, suicides, etc., that we have seen.-the liquidity pumped out into the banks was €140 billion, you know, with the … both from the Central Bank and the ECB. I mean, once you spell that out, that’s €140,000 million – there are 12 digits in that.——- One can only surmise that, as Professor Alan Ahearne has said here to your committee, too many people were benefitting from the boom time for prudence avoidance … prudent avoidance measures to have been taken. ”

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France Decides to Hoover Up Some Irish Tax Revenue From Multi-Nationals-Irish Examiner  https://wp.me/pKzXa-18R

Some mistakenly believe that Ireland can protect its tax revenue from multi-national companies headquartered in Ireland because it can veto changes to EU tax rules.

This is not true. Tax is a national competence within EU. This means that EACH EU COUNTRY WITHIN ITS OWN BORDERS CAN CHANGE TAX RULES.

Taxation of The Sales of Multi-National Companies in France will reduce the profit realised at the Irish Headquarters and thus reduce the revenue to the Irish State

France unveils plan to tax internet giants’ revenue

Irish Examiner,  Wednesday, March 06, 2019

The French government has unveiled plans to slap a 3% tax on the French revenues of internet giants like Google, Amazon and Facebook.

The bill outlines how digital companies with worldwide revenues of more than €750m, including French revenue over €25m, will be taxed.

In a news conference in Paris, finance minister Bruno Le Maire estimated the tax will raise about €500m a year this year but that should increase “quickly”.

About 30 companies, mostly based in the US but also from China and Europe, will be affected. (Several Large Companies “Based in US” realise their world-wide profits in Ireland-Paddy Healy)

Mr Le Maire said the tax will not affect companies directly selling their own products online.

“This is about justice”, he said.

“These digital giants use our personal data, make huge profits out of these data … then transfer the money somewhere else without paying their fair amount of taxes.”

He quoted figures from the European Commission showing that digital giants pay on average 14 percentage points less tax than other European companies.

France decided to implement it after a similar proposal at European Union level failed to get unanimous support from member states.

Mr Le Maire said he would push for an international deal by the end of the year at the Organisation for Economic Co-operation and Development (OECD), a Paris-based forum made up mostly of developed nations.

——————————————————————–Aer Lingus , now with British Airlines, part of IAG, to Be Grounded by No-Deal Brexit-Aer Lingus may not be able to fly between Knock and Dublin

Requirement that Majority Shareholding in Airline be EU Based to Continue Flights

“The European Commission has reportedly expressed doubt about whether IAG, which also owns British Airways and Iberia, will continue to satisfy that requirement after Brexit.”–RTE    https://wp.me/pKzXa-18R

Because of Shameful  Privatisation  of Aer Lingus and its Merger with a British Company, Aer Lingus may not be able to fly between Knock and Dublin

IAG Chief Willy Walsh is Giving Unsupported Assurances to the Contrary

——————————————————————-Irish Sovereignty Undermined…Economy

Not Under Irish Control

https://wp.me/pKzXa-18R

Over Decades, Fianna Fáil, Fine Gael, Labour, Greens Have Made the Irish People and the Irish Economy Grossly Over Dependent on Multi-national Companies and ceded key functions to Foreign Private Interests through Privatisation of Key Companies

The Irish Government no longer controls the communications sector (privatisation of Eircom);   Air travel so vital for an island nation (Privatisation of Aer Lingus-Residual State Shareholding Sold off By Labour-FG Government 2015))

Food Production, so vital to the indigenous Economy ( Privatisation of Irish Sugar, Greencore, Eirinn Foods Thurles)-Scroll Down for Full List

Airports  Next …..

IMPORTANTLY ,the above privatisations made the task of reversing policy in the direction of restoring control of the Irish economy extremely difficult. But of course the Irish people are capable of overcoming this obstacle however high.

TABLE 1; Employment in Commercial State Enterprise (CSE) and Total National Employment, Ireland, 1980-2002.  (1000s)

CSE                 Total                                  CSE% of Total

1980           90,375              1,163                                             7.8

1990           71,913              1,100                                             6.5

2002          47,700                1,761                                            2.7

Source: Chubb, B., op cit, third edition; Irish Statistical Bulletin, March 2003; Department of Finance Review and Outlook.

2015 CSO

https://cso.ie/en/releasesandpublications/ep/p-syi/psyi2018/bus/businessinireland/

(excluding Financials)

Financial and Insurance  97,836

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The Cost of Privatisation of Eircom—-Rural Ireland Paying The Price

https://www.ictu.ie/download/pdf/learning_from_the_eircom_debacle.pdf

New delay will leave a million without broadband until 2020

“Every year, we lose around 10,000 jobs that could have been gained with a proper broadband framework here,” said Séamus Boland of Irish Rural Link.

https://wp.me/pKzXa-18R

THE Government is preparing to announce a new delay to a broadband roll-out for a million people living outside our cities. This will push back new rural broadband connections until 2020 at the earliest.

The move is set to infuriate rural residents and campaigners, many of whom say they are being “abandoned again”.

“Every year, we lose around 10,000 jobs that could have been gained with a proper broadband framework here,” said Séamus Boland of Irish Rural Link.

While the Programme for Government specified a 2019 connection date for the National Broadband Plan (NBP), a spokesman for Communications Minister Richard Bruton indicated that this may not now be met.

However, telecoms industry executives believe there is a slowing of enthusiasm in Government circles for an expedited roll-out of the NBP.

“It’s about politics now,” one senior industry executive said, adding: “They want the heat out of it.”

The Government is waiting on an audit report from consultant Peter Smyth on whether meetings between former communications minister Denis Naughten and Granahan McCourt boss David McCourt disrupted “the integrity of the procurement process”.

Contacted on the issue, Mr McCourt declined to comment on a possible delay or on his meetings with Mr Naughten.

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Rural fury boils over as broadband pushed back

Taoiseach Leo Varadkar,  promised to make rural broadband a ‘personal crusade’. 

Rural residents say they are being “abandoned again” as the Government prepares to announce a new delay to a broadband roll-out for a million people living outside our cities. The delay will mean broadband connections being pushed back until 2020 at the earliest.

The move is set to infuriate rural residents and campaigners, some of whom have to travel to local town libraries to send emails and pay bills.

“The perception in rural areas is that there is no urgency in making sure broadband comes to rural areas,” said Séamus Boland, chief executive of Irish Rural Link.

“While they’re living and working in Dublin, every year we lose around 10,000 jobs that could have been gained with a proper broadband framework here.”

While the Programme for Government specified a 2019 connection date for the National Broadband Plan (NBP), a spokesman for new Communications Minister Richard Bruton has indicated that this may not now be met.

“The target deployment schedule will be published following the conclusion of the ongoing procurement process,” said a spokesman for Mr Bruton, adding: “The National Broadband Plan is a key priority for Minister Bruton and this Government.”

However, telecoms industry executives believe there is a slowing of enthusiasm in Government circles for an expedited roll-out of the NBP.

“It’s about politics now,” one senior industry executive said, adding: “They want the heat out of it.”

Farmers’ organisations have reacted with dismay at the prospect of further delays.

“It might not matter if you’re living in Dublin, but it matters when you live in the countryside,” said Séamus Sherlock, rural development officer with the Irish Cattle and Sheep Farmers Association. “Rural communities are being abandoned again. “Families will not stay in an area without broadband. That and rural crime are the two big issues in any upcoming election.”

The Government is waiting on an audit report from consultant Peter Smyth on whether meetings between former communications minister Denis Naughten and Granahan McCourt boss David McCourt disrupted “the integrity of the procurement process”.

Mr Naughten was replaced by Mr Bruton after being forced to resign earlier this month. Taoiseach Leo Varadkar i ndicated that he had lost confidence in his judgment following a series of meetings with Mr McCourt.

Contacted on the issue, Mr McCourt declined to comment on a possible delay or on his meetings with Mr Naughten.

He had previously denied that anything improper occurred, claiming that several of the meetings occurred at pivotal times for the process, such as when Eir pulled in January out or Enet’s chief executive, Conal Henry, stepped down.

“I cannot comment on the matter while the procurement process is under way,” he said.

“However, I am, and always have been, completely committed to rural Ireland and to building this network.”

Nevertheless, there are growing fears that the Taoiseach and Mr Bruton have decided to put rural broadband back, for fear of political controversy if they proceed quickly.

Urban-based opposition politicians say the process may need to be halted to remove any suggestion of improper interference, even if the audit report comes back with a clean bill of health.

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 Privatisation- Learning from the Eircom debacle—ICTU

Published Spring 2011  (FF-PD-Greens were still in Government)

The full privatisation of Eircom was a major mistake of the Fianna Fail/PD Government”.     

  https://wp.me/pKzXa-18R

https://www.ictu.ie/download/pdf/learning_from_the_eircom_debacle.pdf

The loss of public influence over Eircom, the dominant utility in the vital telecoms sector of the economy was costly to the Irish economy and to Irish citizens in terms of access to broadband, the high cost base in debt-servicing to pay off the huge debts run up and its consequent lack of investment. The company became less significant in the economy as it lost out to competitors.

The debt-free, publicly-owned company that existed before privatisation was profitable and investing strongly. It would have encountered few problems securing fresh investment and had the capacity to place Ireland at the cutting edge of the European telecoms revolution.

Instead, it was a company distracted by the constant changes of ownership and an obsession with extracting rapid returns from its assets.

Of course management was hugely ‘rewarded’ under Valentia ownership for finding the huge sums of money to ‘reward’ the owners. This money was sucked out of the core company and left it very weak.

The full privatisation of Eircom was a major mistake of the Fianna Fail/PD Government.

It would be a foolish Government that fails to learn the lessons of this debacle. But we have had some very foolish governments in recent times.

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National Broadband Plan may cost more than €3 billion

https://wp.me/pKzXa-18R

 Friday, October 26, 2018, Pat Leahy, Irish Times

 

There are growing fears at the highest level of Government about the escalating costs of the National Broadband Plan, now estimated at some €3 billion, and officials are working on “plan B” in case the entire process collapses, The Irish Times has learned.

The process, intended to bring high-speed broadband coverage to over half a million homes, has currently been paused while an independent auditor assesses if it has been compromised by frequent contacts between the former minister for communications Denis Naughten and the leader of the sole remaining bidder for the contract.Mr Naughten resigned a fortnight ago after details of the meetings with David McCourt, whose company is leading the last consortium remaining in the bidding process, were made public by the Taoiseach Leo Varadkar.The Government is now awaiting the auditor’s report before deciding whether to scrap the process or whether it can continue. The report is expected to be presented to the Department of the Taoiseach in two weeks.However, senior sources have said the escalating costs of the programme have also thrown its future into doubt.While exact figures are unknown, it is understood that the estimated final costs have ballooned towards and perhaps past €3 billion.The original estimate for the costs to the State of the programme was €500 million – one-sixth of the current estimate.

Other options

Senior officials have been considering other options should the existing process be judged fatally tainted by the Naughten-McCourt meetings. These may involve asking a semi-State company such as the ESB – an option suggested by Fianna Fáil – or Eirgrid to take on the project.Other options include re-tendering for the project on a national basis, or rolling out a series of local or regional tenders.Senior Government figures acknowledge the current difficulties and the escalating costs, but say the project is a high national priority and is certain to proceed.One source insisted that rural communities would see “shovels in the ground” next year. A number of Cabinet Ministers who spoke to The Irish Times on the subject acknowledged that broadband is a huge political issue in rural Ireland.The new Minister for Communications Richard Bruton briefed his Cabinet colleagues on the issue this week, but did not disclose the extent of the ballooning costs of the programme. Ministers say they were aware the project was in difficulty before now, but not of the extent of the problems.

Delays

The plan to extend high-speed broadband to all of the country has been bedevilled by delays since 2012. While broadband has been rolled out to most urban and easily accessible rural areas, more than 540,000 homes and businesses in parts of rural Ireland are still waiting for effective high-speed broadband connections. Connecting the whole country will require laying more than 110,000km of fibre-optic cable, in many cases across remote and difficult terrain.In a statement last night, Government Buildings reiterated its commitment to “providing high-speed broadband to every home, business and farm across Ireland”. However, it said a decision on whether to proceed with the current programme would not be made for some weeks.“The legal evaluation of the National Broadband Plan tender is due to conclude in the coming weeks,” the statement said.“At that point, if concluded satisfactorily, a recommendation will go to Government and a decision will be taken. This will include consideration of costs. The Government has made no such decision at this point.”Rural broadband will be one of the key elements in talks between Fianna Fáil and Fine Gael on extending the confidence and supply deal, which began yesterday.

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New research from Nevin Economic Research Unit (NERI) suggests weaknesses are particularly prevalent in the information technology sector

New Research for NERI suggests these weaknesses are particularly prevalent in the information technology sector.

https://static.rasset.ie/documents/news/2018/10/neri-report.pdf

It also says the domestically owned economy is over-reliant on low productivity sectors like hotels and restaurants.

The research into labour productivity says the performance of foreign-owned multi-nationals in Ireland is very strong, and bolsters Ireland’s overall performance when compared to Northern Ireland and EU 15 economies.

However the big numbers hide weaknesses, notably in domestically owned information technology firms, raising questions about the level of spillover benefits to this sector, despite the presence in Ireland of some of the biggest technology firms in the world.

The trade union-backed NERI also questions the wisdom of using State supports and tax breaks to grow the hospitality sector, which could have been used to support higher productivity – and higher wage – sectors.

Northern Ireland fares worse in this analysis. A higher level of foreign direct investment than the EU 15 average has not led to a higher level of productivity overall.

It also says the goal of creating an all-island economy has not been realised, and Brexit is likely to make that task more difficult.

 

 

—————————————————————————————————-

Important New Book Now Available-“Upsetting The Apple Cart” – Tax-Based Industrial Policy for Ireland and Europe, published by TASC and FEPS (the Federation for European Progressive Studies).

 

Ireland needs to upset the Apple cart on corporate tax

https://wp.me/pKzXa-18R

David Jacobson Irish Times  Thursday, October 25, 2018

It is time to acknowledge that the tax-based industrial policy pursued since the late 50s is no longer fit for purpose. It has been detrimental to sustainable development where a more nuanced, strategic policy, focused on specific sectors and sub-sectors, is essential. Ireland needs a more substantial focus with improved State backing on Irish-owned firms and indigenous industry.

Given Ireland’s dependence on foreign direct investment from multinational corporations attracted here by low rates of corporation tax, the possibility of this switch(away from low tax on multi-nationals) intensifies the need for an open debate on how we tax multinational enterprises and the alternatives for Ireland to the industrial policies that have been followed for well over half a century. The outcome of the Apple tax case, and the €13 billion refund of taxes that should have been paid, gives these questions even greater urgency

David Jacobson is emeritus professor of economics at DCU and editor of Upsetting The Apple Cart – Tax-Based Industrial Policy for Ireland and Europe, published by TASC and FEPS (the Federation for European Progressive Studies).

 

Ireland has been subject to a great deal of international criticism about its corporate tax regime. While Irish people might feel defensive about this, there are grounds for at least some of this criticism. Ireland’s low-tax regime has forced other countries to reduce their corporate taxes, leading to a “race to the bottom” in corporate tax payments.

As a result, the after-tax profits of large corporations rise, global revenue from corporate taxes falls, and global inequality increases. However, this may be about to change; proposals from the OECD and the EU, and an outcry from civil society opposition, may have forced the debate to a tipping point at which national and international tax policies switch from reducing tax payments on multinationals, to insisting on more equitable tax contributions.

Given Ireland’s dependence on foreign direct investment from multinational corporations attracted here by low rates of corporation tax, the possibility of this switch intensifies the need for an open debate on how we tax multinational enterprises and the alternatives for Ireland to the industrial policies that have been followed for well over half a century. The outcome of the Apple tax case, and the €13 billion refund of taxes that should have been paid, gives these questions even greater urgency.

Encouraging multinationals

Clearly our tax policy has been successful in encouraging multinationals, including Apple, to set up operations in Ireland though it can be argued that they come to Ireland because of a range of other factors including skilled workers, a good education system, political stability, an effective legal system, and because we remain in the European Union.

And we must ask why successive Irish governments have relied so heavily on tax competitiveness to attract investment and have resisted all attempts to get Ireland to change its corporate tax regime, when these other features of our economy and society are available?

Among the key issues to be addressed in the context of the international tipping point away from low or no tax for multinationals are: whether Ireland can reduce its dependence on multinationals as the cornerstone for industrial development; how multinationals have exploited Ireland’s changes in tax rules to continue to pay rates of tax of well below 12.5 per cent; and whether a more active industrial policy, not dependent on low corporate tax, might help increase indigenous enterprise.

The tax-based industrial policy pursued since the late 50s has been detrimental to sustainable development

Ireland’s success in encouraging multinational inflows has not translated into sustainable development. Multinationals in Ireland – including Apple – are controlled from abroad, producing goods and services designed abroad, for markets outside Ireland. This is encouraged by the Irish tax regime. The EU and the OECD are working to reduce tax competition for foreign direct investment. At the same time, key competitors like the UK and the US are joining the race to the bottom in corporate taxes. Both these developments demand consideration in Ireland of an alternative to a tax-based industrial policy.

Success for Irish-owned firms has included the emergence of Irish multinationals with an Irish base and subsidiaries abroad. However, these are in areas like food, unrelated to the activities of foreign-owned multinationals located in Ireland. The potential of foreign-owned multinationals in Ireland to generate local development has not been realised.

Indigenous enterprises

There have been mistakes in supporting the development of indigenous enterprises – in both policy and its implementation – across the traditional manufacturing sectors, such as furniture and engineering, and in more advanced sectors, including information and communications technology.

Industrial policies – or the omission of a policy direction altogether – have resulted in decline where growth might have been possible. In telecommunications, for example, the sale of the State-owned company resulted in the demise of Ireland as a global centre for software supply.

New analysis brought together by think tank TASC shows that the competition between states to attract multinationals, in particular by reducing effective tax rates, is harmful. It has engendered a downward spiral, and while Ireland has been praised for its success as a first-mover in attracting multinationals, it has also been accused of initiating and sustaining this “tax war”, among sovereign states.

This has had both national and international consequences: increasing inequality as the after-tax profits of rich companies grow, and the tax revenue from these profits decline; increasing inefficiency as companies set up operations based on low taxes rather than where production or service provision is best suited; unfair competition with indigenous companies that pay taxes where they are located and international companies which can “profit-transfer” within their group structures to low-tax locations. Local industry loses out also from a lack of government focus and support as it is perceived to be of lesser importance to the foreign-owned multinationals.

With international pressure growing to address its “beggar my neighbour” tax policies, Ireland is going to have to change its approach to taxing major corporations.

It is time to acknowledge that the tax-based industrial policy pursued since the late 50s is no longer fit for purpose. It has been detrimental to sustainable development where a more nuanced, strategic policy, focused on specific sectors and sub-sectors, is essential. Ireland needs a more substantial focus with improved State backing on Irish-owned firms and indigenous industry.

David Jacobson is emeritus professor of economics at DCU and editor of Upsetting The Apple Cart – Tax-Based Industrial Policy for Ireland and Europe, published by TASC and FEPS (the Federation for European Progressive Studies).

 

 

 

 

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Read More on Shane Ross Below

Minister Shane Ross, former private investment adviser, Advocates New Privatised Terminal At Dublin Airport. This is a first step towards Privatisation of all Airports

Irish Times 23/10/18-Minister of Transport, Ross,  commissioned a review of future capacity requirements at the State’s airports up to 2050. The report is expected to be published soon. (The commission membership was selected by Minister Ross-PH) https://wp.me/pKzXa-18R

He raised the possibility of such a terminal being independently run.

Ryanairhad offered to build and operate Terminal 2 but this was turned down by the Government.

“We must ask the question, without fear or favour, that maybe we should have a third terminal,” Mr Ross said at the launch of the transport strand of Project 2040 at Dublin Port’s offices on Monday.

“Maybe we should have an independent terminal at Dublin airport if that is in the interests of the consumer and the national interest as well.”

His suggestion may face opposition from the Irish Congress of Trade Unions(ICTU) which has stated that a third, independently-run terminal at Dublin Airport is not needed.-Irish Times


Mr Ross hired British Private Consultants , Oxford Economics and Cambridge Economics Policy Associates (CEPA), to carry out the assessment.

Privatisation of airport terminals in Dublin ,Cork, Shannon would benefit passengers, report commissioned by Ross From Private Consultants finds

Fiach Kelly, Irish Times,  Wednesday, October 24, 2018,

Multiple airport terminals across Ireland could be privatised in future to increase competition among terminal operators and benefit airlines and their passengers, a report for the Government has found. https://wp.me/pKzXa-18R

The report for Minister for Transport Shane Ross on the future capacity needs of the three State airports of Dublin, Cork and Shannon was considered by Cabinet on Tuesday.

For Dublin Airport, the report, expected to be published by Mr Ross on Wednesday, says that a second runway and a third terminal are likely to be required, with passenger numbers travelling through the airport predicted to hit 54 million by 2050.

An independently owned third terminal is found to be an “appropriate response” to anticipated growth and would be required by 2031. It concludes that an independent terminal, not owned and operated by the Dublin Airport Authority(DAA), the State-owned commercial company, is “feasible and maximises choice to airlines”.

However, it further argues there may be scope for privatising even more terminals and raises the possibility of “additional competition by privatising other terminals”.

‘Competitive tension’

A memo to Tuesday’s Cabinet meeting on the report says transition arrangements to “an independently operated terminal model” may be needed, adding that “transition arrangements could lead in the short term to financial pressures on DAA as a result of ‘stranded’ assets or labour”.

“On the other hand, airlines would have choice of terminal provider and this clearly would bring a competitive tension into play to the benefit of airlines and their passengers.

“In the competitive terminal scenario, the competitive tension would reduce as spare capacity falls away and there may be a need to introduce regulation of terminal charges at that point to avoid negative consequences for airlines and passengers,” the memo adds.

In introducing such a system, however, there would have to be “even-handed” regulation of charges to access airport infrastructure, such as the runways. Arrangements would also have to be put in place to ensure the future efficient development of the entire airport.

Road network

Mr Ross has said a decision will be taken early next year on whether to build a third terminal at Dublin Airport, and the report urges an examination of the road network around the airport to assess how it could handle additional capacity.

He told RTÉ that consultation was beginning immediately with stakeholders, such as Transport Infrastructure Ireland, the DAA, Fingal County Council and members of the public.

He said the earliest the terminal would be built, if a decision was taken to go ahead with it, would be 2030 or 2031.

The report, conducted by Oxford Economics, an organisation that specialises in global forecasting and qualitative analysis, would now go to public consultation, said the Minister with responses anticipated from the DAA and Fingal County Council.

The DAA has said it has not yet seen the new report. “The DAA’s consistent position over the past two years has been that Dublin Airport does not need a new terminal at the moment,” a spokesman said.

“This new report seems to fly in the face of the State’s national aviation policy, which was only adopted three years ago, as it made no reference to a possible independent terminal at Dublin Airport in the medium term.”

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Minister Ross is kept in place by Junior Ministers Finian McGrath and John Halligan who are also members of the Independent Alliance

Minister Shane Ross on Wikipedia

He is one of Ireland’s most visible business commentators, promoting free enterprise, small government and low taxes and is widely identified as one of the most visible champions of laissez-faire capitalism in Irish politics, praising Irish Finance Minister, Charlie McCreevy as a “brilliant Minister in the boom years” and lauded McCreevy’s controversial tax individualization as “visionary” https://wp.me/pKzXa-18R

Prior to the Irish financial crisis he was a persistent critic of the performance of Bank of Ireland, of which he was a shareholder. He contrasted the conservative performance of the “establishment” Bank of Ireland with other financial institutions, notably Irish Nationwide Building Society (Fingleton) and Anglo Irish Bank (Sean Fitzpatrick) which he praised”

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Ross infamously criticised the board of one of the Irish Pillar Banks for failing to Appoint Seanie Fitzpatrick as it’s CEO-Paddy Healy

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https://www.irishtimes.com/business/economy/fdi-to-republic-takes-steep-dive-under-trump-tax-reforms-1.3668337

Gross Over Dependence on Multi-National Investment and Privatisation Mania Driven By  Extremist Free Market Capitalist Policies Has Placed the Irish Economy And Irish Jobs in Extreme Danger

All Effective Irish Economic Sovereignty Was Abandoned by FF, FG, Lab   https://wp.me/pKzXa-18R

Foreign Direct Investment (FDI) to Republic takes steep dive under Trump tax reforms In First 6 Months of 2018

Charlie Taylor Irish Times: Friday, October 19, 2018,

Large-scale repatriations by US multinationals following tax reforms under President Donald Trump meant total (net) foreign direct investment (FDI) in the Republic fell sharply in the first six months of 2018.

New figures show that FDI in Ireland went into reverse in the first half of the year as many US companies moved to repatriate accumulated foreign earnings from their affiliates abroad.

According to statistics from the United Nations Conference on Trade and Development (Unctad), total FDI inflows to the State declined by $81 billion (€71 billion). With $2 billion of that accounted for by new investments, the figure for capital outflows is $79 billion, from a plus reading of $6 billion in the first half of 2017, to a negative $73 billion for the same six months of this year.

The Unctad figures provide the first real evidence of multinationals repatriating foreign earnings from the Republic. However, there is disagreement regarding the usefulness of comparing intra-company fund movements with higher impact FDI, such as the establishment of new operations or the purchase of new assets.

Special rate

The outflow of capital back to parent operations comes after the enactment of the US tax reform package which gave multinationals a one-time special rate of 15.5 per cent on the repatriation of profits earned abroad.

Astrit Sulstarova, who leads Unctad’s investment trends and data section, told The Irish Times that there was no doubt the slump in FDI was as a result of US companies sending money back home.

“The main reason for the decline is due to repatriation of profit by the US multinationals. This is reflected also in the components of FDI inflows to Ireland,” said Mr Sulstarova.

“In addition, there is also negative intra-company loans – ie foreign affiliates in Ireland [that] either were paying back their loans to their parents or providing new loans to them,” he added.

IDA Ireland, which attracts FDI to Ireland, sought to downplay the significance of the data.

‘Real investments’

“IDA Ireland is focused on real investments and real jobs, which have a positive impact on the growth of the Irish economy. The key indicator of FDI flows in Ireland are highlighted in our end-of-year results which for 2017 indicates that the high level of investments won remained stable in 2017, with 237 new investments secured by IDA during the year,” a spokeswoman said.

“The number of new name investments increased to 111 from 99 in the previous year,” the spokeswoman added.

The Republic was not the only country impacted by the newly enacted reforms, which also resulted in the US corporate tax rate being cut from 35 per cent to 21 per cent. According to Unctad, global FDI fell by 41 per cent in the first half to an estimated $470 billion from $794 billion a year earlier, with inflows in developed countries down 69 per cent to an estimated $135 billion.

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Privatisation of Eircom Bites Back-My Earlier Analysis (Below) Confirmed by Sunday Business Post  https://wp.me/pKzXa-18R

The Privatisation of the Telecom Eireann telephone network is now widely accepted as being a huge mistake and has made the rollout of rural broadband more expensive.-SB Post

What led to Denis Naughten’s shock resignation over broadband bidder contacts? And where does it leave the future of high-speed connectivity in rural Ireland?

By Hugh O’Connell, Michael Brennan and Jack Horgan Jones, S Business Post Oct 14-2018

The demise of the broadband plan

In retrospect, the rural broadband contract was always a massive challenge, if not doomed to failure.

The telephone network used to be owned by the state. But it was sold off when Telecom Éireann was privatised by the Fianna Fáil government in 1999. That loss of the network is now widely accepted as being a huge mistake and has made the rollout of rural broadband more expensive.

The fibre-optic cables which deliver broadband have to be hung on the 1.2 million telephone poles owned by Eir, as Telecom Éireann is now known. Eir is proposing to charge the winning consortium €20 per year for every telephone pole it uses – which makes it very costly to run fibre-optic cables to rural homes in remote areas. That is where wireless broadband will have to come in.

The current rural broadband process had started to disintegrate after Naughten announced in April last year that he was allowing Eir to provide broadband to 300,000 of the more easily reached rural homes. This reduced the state’s risk because it meant it only had to pay for a rural broadband contract to 540,000 homes.

But it increased the risk for the remaining bidders because they were now left with the harder to reach rural homes – those far from towns and villages.

The ESB/Vodafone joint venture known as Siro soon pulled out. Then Eir itself pulled out, citing the complexity of the process, but it had already got the most valuable part of the project. Since then Eir says it has rolled out broadband access to 75 per cent of the population.

It is behind target in its agreement with Naughten to reach 300,000 rural homes by the end of this year, with 100,000 left to go. This was due to delays caused by Storm Emma and other extreme weather conditions this year. But it says that it will meet the target by the middle of next year.

The departure of two other bidders left only the Enet-led consortium and it too was facing significant difficulties. Late last Friday, the Department of Communications released minutes of a meeting held last June that reveals further difficulties with the sole remaining bidder.

This meeting, which Naughten only disclosed at his budget press conference last Thursday, involved the minister and Department of Communications officials as well as McCourt and members of the bid team.

The memo records Naughten as having noted that the bidding consortium was adopting “a conservative position in respect of both the potential costs and potential revenues” and as a result would likely seek a level of subsidy that Naughten could not recommend to government. The consortium raised issues over deployment, cost and construction, but McCourt, the memo records, assured Naughten of the consortium’s commitment to the project.

That assurance was underscored at the New York dinner meeting just over a fortnight later where, according to another memo, McCourt addressed matters related to the bid’s leadership team, the importance of meeting an impending deadline, the need to finalise financing arrangements and its internal decision-making process. One person who attended the meeting said it was a “robust” exchange.

Twelve days later the English firm SSE, which had significant expertise in installation, pulled out of the consortium. It was followed by John Laing. The sudden arrival of new members of the consortium, including Actavo, the Denis O’Brien-owned company which was formerly known as Siteserv, put it back in the news.

The consortium’s final bid was submitted on September 18 with McCourt’s firm, Granahan McCourt, as the lead bidder and not Enet, which was described as “key partner”.

Conal Henry, the former chief executive of Enet, said he was “very saddened” by events last week. Discussing the tendering process, Henry said the obligations of doing business were “cumbersome”.

“In my view the tightness of the regulations can impede the process quite seriously. In the private sector if two businesses were dealing in a transaction at that level, the level of contact would be much deeper. In the public sector, things have to be at arm’s length. But that’s a recipe for confusion,” he said.

He also said that Naughten was “trying to do the right thing by the citizen and taxpayer . . . I would never question his motive, it was unimpeachable. And that’s based on all my dealings with him, that’s not a bullshit platitude. [Naughten] was a guy trying to get the right thing done. His agenda wasn’t hidden, and he believed in the NBP, and would move hell and high water to get it done.”

However, in moving hell and high water, Naughten also sealed his fate. Even with his departure, it seems the crisis has not passed. In fact, it could deepen further.

While the two former bidders for the NBP – Eir and Siro – would not comment, industry figures said there was a possibility that bidders from earlier in the process could initiate a legal case if they felt they had been denied a market opportunity. “I would be concerned that these guys want compensation,” one source said. “It is a complete mess.”

Another said they were “very worried” about the future prospects of the NBP in its current guise. The government is now reviewing the tendering of the broadband contract to see if it can continue. “I am going to make this a personal crusade of mine,” the Taoiseach loftily declared last Friday.

Officials in the department remain bullish about the national broadband plan, telling industry sources they expect to be able to sign a contract by Christmas. But to many, the process looks doomed.

Fianna Fáil’s Timmy Dooley said it was “dead in the water” while Sinn Féin, Labour, the Greens and Solidarity-PBP have all called for it to be halted. That means the last supporter of the contract is Fine Gael.

As on water charges, the political scrum has collapsed. If a new tendering process has to commence, then it could put the already delayed contract back by a further two years at least.

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Rural Broadband-Resignation of Minister Naughten

Now Naughten Says Varadkar Met The CEO of the Finance Company on several occasions!!!

Privatisation of Eircom  Bites Back

100 % Rural Broadband Provision COULD NOT BE DELIVERED PROFITABLY  BY PRIVATE COMPANIES COMPETITIVELY TENDERING. Like Rural Electrification, including in the Remotest Areas,  it could only be delivered by the state due to high initial cost and long term low usage in low population density areas.

Existing Large Private providers such as UPC/Virgin Media have the business in lucrative high density areas such as Dublin. After Eircom pulled out, there was no bidder left wwhich could subsidise sparsely populated areas with revenue from cities.

So all the Communication Companies Pulled out leaving a single finance company standing.

Then Naughten and Varadkar scrambled to save the process. The finance company demanded it’s pound of flesh!–CRISIS

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DEPENDENCE ON LOW  CORPORATE TAX RATES TO REBOUND ON IRELAND

AND IT IS UNFAIR TO POORER COUNTRIES AS WELL!!

From Andy Storey in Dublin Inquirer  https://wp.me/pKzXa-18R

One of the latest is Oxfam research titled “Hard to Swallow” on how large pharmaceutical companies shift profits to and through Ireland to cut global tax bills. Four such companies – Abbott, Johnson & Johnson, Merck and Pfizer – declare suspiciously large profits in low-tax locations like Ireland, and post much lower profit figures (or even losses) in countries with higher tax rates (some of which are underdeveloped).

Between 2013 and 2015, Abbott declared profit rates of 8 percent in Thailand (where the tax rate is 20 percent), 4 percent in Chile (tax rate of 21 percent) and 75 percent in Ireland (with our nominal tax rate of 12.5 percent).

Over that same period, Abbott posted losses of 36 percent in India where it would have faced a tax rate of 34.2 percent.

For the seven poor countries focused on in the Oxfam study – Chile, Columbia, Ecuador, India, Pakistan, Peru and Thailand – the tax lost every year through these manoeuvers is estimated to be, at a minimum, €96.6 million.

But its loss is not necessarily much of a gain for Ireland: Abbott declared profits of €1.2 billion in Ireland in 2015 but paid no Irish tax on those profits at all.

How it pulled off this trick is not entirely clear. One juggle may have been to offset the cost of claimed intellectual property imports against tax, a provision introduced into the Irish tax code in 2015 and which is also availed of by tech giants like Apple to minimise its tax liabilities.

Another (related) stratagem used by Abbott may, Oxfam speculates, be something called the “single malt”, the subject of a recent briefing note by Christian Aid, building on earlier work by that development NGO. They describe how the ploy works:

“(i) A US-headed multinational company places intellectual property (IP), to which it can attribute a significant proportion of its profits, in an Irish-registered but Malta-resident company. (ii) The multinational books non-US sales income in a second, Irish-registered and Irish-resident company. (ii) This second company then channels the income out of Ireland again as royalties or licence fees paid to the Malta-resident company that owns the IP. This reduces the tax paid on the sales income in the countries where the sales are actually made; puts profits instead in a low- or no-tax environment; and allows US multinationals to avoid US anti-avoidance rules …”

Christian Aid has found that Teleflex Inc, a maker of medical devices with operations in Limerick and Athlone, set up in July of this year a “single malt” structure by establishing a subsidiary’s tax residency in Malta. This happened despite a Department of Finance spokesperson claiming in June that recent changes in the US tax code would counter the appeal of the “single malt” for tax avoidance purposes.

Ireland clearly remains wide open for business when it comes to tax avoidance. And, if you wanted to be purely cynical and self-interested about it, maybe that makes a certain sense: at least some tax revenue is sometimes diverted here, and the interests of sectors important to the Irish economy are protected.

Oxfam notes that nine of the top 10 pharmaceutical companies in the world have Irish operations and that pharmaceuticals make up about half of all Irish goods exports each year. The four companies they hone in on in their recent study employ some 10,000 people here.

So is it likely to matter to most Irish people that countries like Ecuador and India are losing out as a result of these tax shenanigans? An unpublished paper presented at a seminar in the School of Politics and International Relations (where I work) in UCD last week suggests that it might.

Aidan Regan of University College Dublin and Liam Kneafsey of Trinity College found that when presented with an argument challenging Ireland’s tax avoidance regime on the grounds of international fairness, some survey respondents expressed misgivings about the system (though most people strongly support it).

For those of us concerned with global justice that finding provides some prospect that we might be able to push for changes on ethical grounds.

And, if not, there is always the possibility that the rest of the world will get sufficiently pissed off with Ireland depriving them of taxes that change will be forced on us by outside pressure. In any event, the current model is neither fair nor, probably, sustainable.

Privatisations in Ireland

http://www.cesifo-group.de/DocDL/cesifo1_wp1170.pdf

 

TABLE 1; Employment in Commercial State Enterprise (CSE) and Total National Employment, Ireland, 1980-2002.

CSE                 Total                                  CSE% of Total

1980           90,375              1,163                                             7.8

1990           71,913              1,100                                             6.5

2002          47,700                1,761                                            2.7

Source: Chubb, B., op cit, third edition; Irish Statistical Bulletin, March 2003; Department of Finance Review and Outlook.

TASC: Selling Out-Privitisation in Ireland

https://www.tasc.ie/publications/selling-out-privatisation-in-ireland/

 

Nov 9, 2007Thurles Erin Foods factory to close in June with loss of 95 jobs

Fri, Nov 9, 2007, 00:00re to FacebookShare to TwitterShare to Email App

The Erin Foods factory that has been in operation in Thurles, Co Tipperary, for the last 46 years is to close next June with the loss of 95 jobs, the company announced last night.

1991 -Greencore Group plc is a food company in Ireland. Established by the Irish government in 1991 when they privatised Irish Sugar, today its lines span mainly convenience food related interests in the Republic of Ireland and the United Kingdom. Greencore is today the world’s largest sandwich manufacturer. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.

Acceleration of Privatisation Policy after Election of Ahern-Harney-McCreevy Government in 1997

—Eircom Privatised 1999

 —Aer Lingus Privatised in Phases—2006-2015


 

Employment in multinationals reaches a record high 

ColmKelpie  Irish Independent Jan 5, 2018

The number of people employed in multinationals has reached a record high of over 210,000, the IDA has said.

The figure for 2017 surpasses the overall five-year target of 209,000, which was set in 2015 as part of the agency’s strategy out to 2019. The number of new investments totalled 237.

Some 19,851 new jobs were created over last year, the IDA said, resulting in a net job gain of 10,684. The net gain was smaller than both last year’s and 2015’s figures, as losses, at 9,167, were up on both years.

The IDA said job losses in 2016 were at “remarkably low levels” as a percentage of the overall employment in FDI. Martin Shanahan, IDA chief executive, said the losses in 2017 are concentrated to a small number of companies. The only sector which has seen employment fall is in computers and electronics, down 1.2pc.

“What’s driving that is the transitioning out of traditional computer hardware,” Mr Shanahan said.

He said the most obvious example of that was HP. Last February the tech giant announced that “close to 500 employees” will be losing their job at the Kildare plant.

Overall, Mr Shanahan said the 2017 figures are consistent with a pattern of “extremely strong job creation” amongst IDA client companies in recent years.

“To put [the jobs figure ] in context, less than ten years ago, across 2008 and 2009, Ireland lost over 35,000 FDI jobs. This is a salutary reminder that we can take nothing for granted in the foreign investment world. All jobs must be fought for and won against increasing international competition.”

It comes just days after Enterprise Ireland announced that 209,338 people are now employed by Enterprise Ireland backed companies. This is the highest total employment achieved in the history of the agency, and represented a net increase of 10,309 jobs for 2017, when jobs losses are accounted for.

Mr Shanahan also announced that the IDA was reorganising its global footprint, including treating the UK as a separate market due to Brexit. The IDA’s continental European activity will now be managed out of Frankfurt, rather than London. The agency is also planning a new office in Toronto, while there will also be a focus on the UAE, Turkey and South Africa.

 

Wikipedia List of Privatisations in Ireland

Privatisations

Like many countries with extensive state owned sectors, the Irish Government has embarked on a programme of privatisations in recent years. Privatisations have always been controversial in Ireland. In 1991 the chief executiveof Greencore was forced to resign immediately prior to the company’s flotation when it was discovered he was a shareholder in a company which had been purchased by Irish Sugar prior to its flotation. However it was after the drop in the Eircom share price following the company’s flotation that many became opposed to future privatisations. Nevertheless, as of 2006 the latest privatisation has been that of Aer Lingus Group plc, on 2 October 2006. The Great Southern Hotels were also privatised in 2006.

List of privatised State-Sponsored Bodies

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