€185m scheme for critical firms

Jobs Minister Richard Bruton said yesterday that his department would make provision for €185m in development and seed capital in the coming year to provide support for critical firms.

In total, the Department of Jobs’ capital spending will increase to over €500m in 2015, which the minister said would support more than 50,000 new jobs.

Improved tax incentives to attract more multinationals to Ireland, certainty around company residence rules, new schemes to support start-up firms and measures aimed at providing extra non-bank funding for SMEs form the basis of what Mr Bruton outlined as a very positive budget in his briefing yesterday.

The relaunch of the Seed and Venture Capital Scheme — as the “Start-Up Relief for Entrepreneurs” scheme — is one element. The original scheme had a chronically low take-up rate, with fewer than 100 firms signing up, even with around 12,500 companies being established per annum.

The targets for the next year are for more than 13,000 new jobs being created by Enterprise Ireland-supported firms and the same amount in IDA-backed enterprises; with Local Enterprise Office-supported companies creating nearly 2,000.

“Companies considering investing in Ireland want two things above all from our corporation tax system — competitiveness and certainty,” said Mr Bruton.

“With the introduction of changes like a ‘knowledge development box’, changes to the R&D tax credit and improved measures to attract key senior executives to Ireland, they make major increases in our ability to compete internationally in this area.”

Regarding the introduction of a new so-called knowledge development box — basically, a low-rate tax incentive to entice firms to develop new technology and locate intellectual property here — Mr Bruton would not be drawn on the likely rate charged, but suggested a low rate was being aimed for and the programme would be “a very competitive offering”.

When asked if the Irish model would be in line with the UK, where a corporate tax rate of only 10% on profits from new patented technology is being charged, Mr Bruton said the Government was aiming for a “best-in-class” model.

The European Commission is currently looking at such schemes to see if they breach state aid rules. Mr Noonan said the programme would be “a key element” in attracting future foreign direct investment to Ireland and plans to legislate for it in next year’s Finance Bill, following a public consultation process

Additionally yesterday, Ged Nash, the minister of state for business and employment, said that “considerable progress” had been made in establishing a Low Pay Commission, which would advise the Government annually on the appropriate rate of the national minimum wage.