19 3 mins 10 yrs

Irish PM Enda Kenny is delusional if he thinka that Ireland can “create” more than 10,000 new international-finance jobs over the next five years — despite the country’s battered reputation.

Enda Kenny’s comments came as he revealed a new strategy to attract more companies to the IFSC and encourage those already here to take on more workers. If another 10,000 jobs can be created over the next five years, it will mark a near-doubling of the 6,000 new positions that were created in the IFSC in the five years to 2011. It already employs about 33,000 people. Mr Kenny yesterday dismissed suggestions that the target was too ambitious and said Ireland was entirely capable of “rebuilding” the financial reputation it had spent decades creating. “The target of 10,000 jobs is a credible estimate based on expert assessment,” he insisted. “It is well within our achievement in the (next) five years.” The latest effort to reinvigorate the IFSC comes a year after former Taoiseach John Bruton was appointed as chairman of the industry group IFSC Ireland, so that he could act as its ambassador and lure new business here. The new strategy document includes relatively detailed plans for attracting new business in areas such as fund management, international insurance and reinsurance and payment services. The document also identifies several major challenges for the industry, including high personal taxes, which it says are making it difficult for IFSC firms to “attract and retain” highly skilled jobs.

I see no prospect of this unless Ireland was to cut personal taxation levels, something the EU would not countenance for one second. In fact the liklihood is that the Irish government will be INCREASING personal taxation. Week by week, Kenny shows a pretty lamentable grasp of economics and I wonder if his Coalition will hold together? Fianna Fail may have been criminally reckless  with the Irish economy but to be honest I find the new masters little better.

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19 thoughts on “DUBLIN DREAMING

  1. Of course the tax elephant in the room is the 12.5% corporation tax rate, along with all the other tax break which make Ireland a tax haven for multinational companies which launder profits through ihe IFSC while providing very few jobs.

    That is a major reason why personal taxes are so high, and presumably Kenny is aware of this.

  2. Ireland probably is capable of rebuilding the financial reputation it took DECADES creating but will that will take more DECADES to attain?

  3. Peter,

    Ireland is not a “tax haven”. It attracts investment through, inter alia, its competitive rate. If this were to be increased, tax revenues would go down not up as the multinationals sought out new bases.

    Whatever way we are going to get out of this mess, the CT rate can’t be touched.

  4. Peter –

    CT is paid primarily by employees. If income taxes were reduced and CT increased the incidence of tax (i.e. who it falls upon) won’t necessarily change.

    The target of 10,000 jobs is a credible estimate based on expert assessment,” he insisted. “It is well within our achievement in the (next) five years.”

    Gosh, just what Dublin needs, a five year central government plan. They always work out, eh? Expect the IFSC to be empty within five years.

  5. Pete

    CT is paid by shareholders since their dividends are paid from taxed profits. If CT was zero, the shreholders would have bigger dividends and wages would be unaffected since they are set by market forces. Wages are an allowbale cost in arriving at taxable profit, so in no sense do the employees pay CT.

  6. I agree with Peter.

    Government in Ireland makes the individual pay through the nose through high personal income taxes, V.A.T. (21&1/2% on many articles) and V.R T. on new car sales while giving large foreign corporations a free ride with the low 12.5 % corp. tax.

    And what do the public get for those hollow promises? Crappy schools, an incompetent justice system and DEADLY health care.

    The problem is that most people don’t utter a sound while their being screwed, alas but not kissed, by the Dáil rapists.

    Ah suren, we live in hope.

  7. Peter –

    There are three ways in which CT can be paid: by shoreholders via lower returns, customers via higher prices and by employees via lower wages. CT is paid by all three, but the evidence is that the incidence by far falls greatest on employess via lower wages.

    Yes, wages are a cost before profits and tax, but lower taxes would feed back into the firm.

  8. Pete moore
    Sorry – talk me through this. I dont think your last sentence explains your position.

    I think you are saying that if CT was higher, the firm would have to make greater gross profits to make the same net returns for shareholders. That is true, but i cant see that mechanism over-riding the market determining aspect of wages.

    Could you point me int he direction of the evidence?

  9. I personally deal with a number of financial institutions resident in Dublin.

    As things now, the international companies they’re a part of like Dublin very much as a domicile – the high quality workforce, the good ambience of the city, the extreme ease and low cost of getting to London ( thank you Ryanair ) , the ease with dealing with US customers.

    I have no idea of what the upside jobs potential is, but I’ll tell you one thing – none of my guys is pulling back.

    Financial jobs are very good for Dublin, as they pay good wages, and they attract visitors who spend money in town, which creates more jobs.

    Ireland is wise to continue to focus on attracting this sector.

  10. There is not necessarily any connection between the financial crisis and financial industry jobs geared to serving non-Irish clients.

  11. Pete Moore

    Yes, the burden of CT is shared. You caould have added that retained profits also suffer.

    But the fact remains that many UK companies pay very little CT, due to previous losses, capital expenditure or bankster-devised “schemes”. Although the rate for large companies is 28%, very few pay more than 20% of declared profits and some pay a lot less than that. If the rate was cut, shareholders would be the main beneficiaries and wages would not be significantly increased unless market forces dictated otherwise.

  12. “Government in Ireland makes the individual pay through the nose through high personal income taxes, V.A.T. (21&1/2% on many articles) and V.R T. on new car sales while giving large foreign corporations a free ride with the low 12.5 % corp. tax.”

    Yes, but it’s all about job creation. Income tax, VAT rate (now 21% again but still fecking high) and the bloody VRT are all killers but increasing the CT rate would be economic suicide.

  13. No, reducing income tax and Vat would give a boost to demand. This could be offset by increasing CT to (say) 20% which would still be low by international standards.

  14. It will take Ireland a decade at least to come right again, and it may never reach the bloated level of success it had experienced a number of years ago, but it will come right. It has a well educated ambitious work force.

  15. On this score I think Kenny is trying to work with what he has, and the particulars were set forth by Phantom above. Unless someone can convert rain to gold then this is the type of thing that is goign to have to be the more limited goal.

  16. The fact that some costs in Dublin, such as housing, have gone down, as a result of the crisis and bust actually make Dublin more attractive now than before

  17. “No, reducing income tax and Vat would give a boost to demand.”

    Agreed, but that would only assist the domestic market which, for a state the size of ROI, isn’t the key consideration.

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