I was somewhat surprised to learn that Fintan O’Toole takes his policy views from US talk Radio (I would have thought he was more a Guardian reader myself) but that probably explains why his view on foreign direct investment and Ireland’s industrial policy is so out of touch with reality.
As the economist Seamus Coffey recently argued elsewhere we need to kick back on ill informed taunts that Ireland is some kind of tax haven. Multinationals make a massive contribution to the Irish economy. According to a recent report by Grant Thornton, there are 1,033 overseas companies operating in Ireland, employing over 161,000 people, spending €24bn, paying Irish staff €8bn in wages and generating €122bn in exports.
The taxation of multinationals is based on a fundamental principle: corporate profit-taxing rights are granted on the source principle. Put simply countries can tax the profits from operations located in their countries. Although some of the world’s largest companies have operations in Ireland, we can only tax them on the profit they generate from their activities in Ireland, which we do.
The issue being debated in the US at the moment however relates to a loop hole in the US tax code which allows ‘deferral’ of corporate income taxes, and allows US multinationals to delay certain tax payments until the profits are transferred to US-incorporated entities in their corporate structure. As Seamus Coffey pointed out a result of the deferral provisions in the US tax code, some companies create an artificial division between their US and non-US source profits and give the appearance of very low tax rates on their non-US profits. The reality is that most of the profit is sourced in the US, and the companies owe US corporate income tax on those profits. It is not the case that the profits are untaxed.
In plain English we aren’t the problem; the US tax code is. Even the US Treasury Secretary has written to the EU Commission stating that while they don’t collect the tax until repatriation the US system of deferral “does not give EU Member States the legal right to tax this income.”
Ireland’s 12.5% corporate tax rate is a fundamental part of our offering to multinationals but equally important are access to EU markets and most critically talent. IMD ranks Ireland’s educational system as being amongst the top ten in the world. We rank number one in the world for the availability of competent senior managers and flexibility of our workforce. If (for example) you want to find people who really understand pan-European operations, Shared Services or Compliance you come to Ireland.
Ireland’s big idea isn’t attracting foreign direct investment its building Irish capabilities. Foreign direct investment is one of the key ways we build real capabilities.
Couple of practical examples Dublin is known as the shared services capital of Europe. We have built that expertise over many years. We are now applying that expertise in shared services to the business of Government. The adoption of Shared services by the Irish Government is core to public sector modernisation and delivering better and more cost effective public services.
Another example the Tyndall Institute which has built up a huge expertise in working through working on research projects with some of the world’s leading high tech multinationals. It is now partnering with Teagasc to apply that learning to developing the food sector in key areas like traceability. In short we are using capabilities developed with multinationals to deliver better Government and develop Irish industry.
My work as Minister of State was focused on making sure we continued to build Ireland’s capabilities through a new national Innovation Strategy and a new national Skills Strategy. Both strategies are fundamentally about making sure we have the skills and capabilities to compete in a rapidly changing world. Both strategies were developed in partnership with the key stakeholders and can only be delivered by a partnership between Government, Industry and Academia. The innovation strategy offers us the potential to use the Irish research community to build cross industry collaboration between some of the world’s leading companies here to really drive innovation. The Skills strategy will ensure we have the highly skilled workforce necessary for the incremental innovation needed to stay competitive.
The task of the last Government was to stabilise the public finances and start getting people back to work. This gives us the resources to future proof the Irish economy by investing in education, research & innovation. It gives us the resources to turn our economic growth into a social recovery by investing in new and reformed public services, and ensuring everyone has the opportunity to benefit from a return to growth.
The success of the last Government (and we had some pretty major successes despite what our critics say) provides us as a nation with the time and space to think about the future we want for our children not just how do we pay the national debt. We now for the first time in almost ten years have real choices. We can start to think about the big ideas that will shape Ireland’s future. That is a task not just for Government but for all of us. We have a second chance of succeeding as a nation. I hope we use it well.
17th September, 2014
Check against delivery.
Good evening ladies and gentlemen. I am delighted to be here in the RDS to launch the Irish Times Higher Options College Expo 2014.
My thanks to Liam Kavanagh, MD, Kevin O’Sullivan, Editor and Claire Looby, Organiser of the Irish Times Higher Options Expo for your very kind invitation. This annual event, which is almost 30 years in existence, provides a unique opportunity for both school leavers and mature students to discover the vast range of options available to them for further study or training. There are now numerous opportunities on offer within the further and higher education sector for students to train and upskill, which in turn will enhance their job prospects in the future. I understand that over 25,000 students and hundreds of guidance counsellors and parents are due to attend the event over the next three days.
This year more than 150 institutions from Ireland, UK and further afield will participate in the Higher Options Expo offering support and advise to those wishing to engage in further and higher education. A very broad range of institutions are represented, including universities, institutes of technology, colleges of further and higher education and professional bodies.
Higher Options brings the world of study directly to students, providing a unique opportunity to meet directly with representatives from universities, colleges and education institutions. There is a world of choice in education and career options for school-leavers and mature students nowadays, and The Higher Options Expo brings that choice under one roof in this unique event.
The National Strategy for Higher Education to 2030 sets out a comprehensive roadmap for reform of the higher education system. The objectives of the reform programme are to ensure that the system becomes more performance oriented, more flexible and responsive while its diversity in terms of mission is retained and enhanced. We know that meeting Ireland’s need for economic renewal and development will rely on our capacity and reputation for producing highly skilled, creative and innovative graduates as well as new knowledge and innovation at both regional and national levels.
The intrinsic strength of a Higher Education Institute lies not only in its academic capacity to generate and transmit knowledge but also in its ability to engage and develop strong mutual partnerships with enterprise. The relationship between our higher education institutions and enterprise is of vital importance for economic stability and to ensure growth and sustainability for the future.
It is important that graduates emerge from the third level system with the skills required by employers in key growth areas. While developing specific skills in disciplines where there will be job opportunities is fundamental to securing future economic growth, of equal importance is that we equip graduates with the necessary skills to make them adaptable across a range of disciplines. 21st century business leaders need graduates with specific technical skills but they also want these graduates to be equipped with core employability skills such as creativity, critical thinking, communication and team working. The ever changing needs of the labour market as well as people’s increasing openness to career mobility underlines the need for continuous cooperation and partnership between higher education and business in shaping curricula and defining the skills and competences needed for the modern knowledge workers.
A return to full time education is not a feasible option for many people who have lost their jobs in recent years. In recognition of this, in 2011 the Government launched the Springboard programme, a specific initiative to provide free higher education places for unemployed people and jobseekers in areas of current and future skills needs. Now in its fourth year, Springboard has supported more than 16,000 unemployed people to undertake higher education programmes in areas of identified skills needs such as ICT, Medical Devices and International Financial Services. Close engagement with enterprise at all stages of the tendering and selection process has been a key feature of Springboard with the majority of courses containing a work placement element. I am delighted to say that evaluations to date show that the majority of Springboard graduates are finding new employment opportunities in a variety of sectors within six months of completing their studies.
The Skills to Work initiative is a cross-Government campaign to raise awareness of the various programmes which are aimed at getting people back to work. While unemployment levels are continuing to fall, the biggest challenge still facing our country is unemployment. Getting people back to work and ensuring they earn a living wage is our priority.
This Government has introduced a range of programmes to do just that – now with Skills to Work we are making it easier for jobseekers and employers to quickly find out what initiatives they may qualify for, provide information on those programmes and how to apply for them.
The Skills to Work brand brings together the range of enterprise-focused targeted education and training programmes available to jobseekers in a coordinated way. I strongly encourage jobseekers, wishing to follow a course of study, to reskill or to upskill, to go to the Skills to Work website to find which of the Government’s skills initiatives best suits them.
The PLC programme is one of the largest and most successful programmes in the Further Education and Training sector. Over 30,000 adults enrol annually on the programme. Courses are aimed at preparing learners both for employment and for progression into other areas of education and training. They provide integrated general education, vocational training and work experience mainly for young people who have completed upper second level education or adults returning to education. PLC offers a variety of programmes across a wide range of disciplines supporting industry and community needs.
Progression for PLC learners to third level institutions can be accessed through the Higher Education Links Scheme (HELS) which links a number of QQI level 5 and 6 awards to a variety of 3rd level courses in participating higher education institutions. These progression opportunities are operated through the CAO system.
In conclusion, I once again thank you for your kind invitation to launch the Higher Options Expo. I am sure that this event will be of enormous benefit and assistance to all those wishing to participate in future or higher education or to avail of upskilling or reskilling opportunities. This Expo makes it clear that there is a wide variety of choice available.