Ireland Must Roll With The Punches, Says Report

by Jason Gorringe, Tax-News.com, London

13 January 2009

The Deputy Prime Minister Mary Coughlan has released a statement commenting on the release of the National Competitive Council’s 2008 reports on January 8, which examine Ireland’s future as a competitive low tax jurisdiction.

In response to the reports, ‘Benchmarking Ireland’s Performance’ and ‘Ireland’s Competitiveness Challenge’ Coughlan said that “despite the fact that we are in a very challenging economic situation, where every job lost is a tragedy for those directly affected, and a further blow to the economy as a whole, the two NCC Reports published today give cause for optimism that we can get through these tough times and be ready for the global upturn that will inevitably come.”

"The Benchmarking Report, while pointing to areas where Ireland needs to improve its relative position, such as on the issue of costs, also points out that the economy has a number of strengths, such as low taxes on labour (Ireland is ranked 1st in the OECD for having the lowest tax wedge on labour), a high stock of inward direct investment, low industrial energy intensity and the 3rd lowest business start-up costs in the OECD.”

The Competitiveness Challenge report also points to Ireland’s improving export performance in services (Ireland is the 10th highest exporter of services in the world), improving performance in investment in infrastructure, education and research & development and, despite the fact that it is clearly increasing, Ireland still has a comparatively low level of government debt. Ireland also boasts a strong pipeline of Foreign Direct Investment.

Commenting on the challenges ahead, Coughlan said: “Clearly, restoring fiscal sustainability is an immediate challenge and the recent Budget, as well as other measures that we have taken and will take over coming weeks and months, will set us on the right path towards bringing the public finances back into line.”

She went on to say that “the Chair of the NCC, Mr. Don Thornhill, was clear in his message this morning, that this was not about doom and gloom, but about making sure that the correct policies were implemented, that will build on our strengths, address our weaknesses, and position us for the upturn.”

The Deputy Prime Minister pointed to the fact that the NCC welcomed the government’s recently published Framework for Sustainable Economic Renewal “Building Ireland’s Smart Economy” as being a very good start for positioning Ireland for our next phase of growth.

“The government is committed to pursuing the policies and actions set out in this Framework document” she said. “As a country we may be small, but we are also agile in terms of our ability to respond rapidly to crises. Now is the time for us to put our agility to good use,” she concluded.

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