Elections and pay promises spell danger for Ireland

Over the past several years the issue of the low level of taxation paid by multinational corporations to local economies has been a hot topic.
Elections and pay promises spell danger for Ireland

IDA Ireland and others have been working very hard and very successfully for decades to attract such companies to Ireland.

Such companies now underpin our economy and have helped to keep it afloat over the last seven years.

However, attracting such companies has undoubtedly resulted in compromises being made.

As a result, our friends in the EU believe that we may have provided some of those corporations with illegal supports.

The investigation of an agreement reached by Ireland with Apple Computer many years ago is apparently to be reported on in the near future.

Speculation would suggest that it may not be in our favour.

The Government has warned that it will fight tooth and nail any negative finding.

Whatever about government bravado, given the importance of these corporations to our economy, it’s imperative that EU findings do not impact on our ability to attract such companies.

They are vital to any chance we have of getting our economy sustainable once again.

We are not alone. Several other countries in Europe are also in the spotlight and no doubt others should be.

These corporations establish in Ireland and elsewhere for a variety of reasons.

Corporation tax is obviously a major attraction but it’s not the only one.

The cost of doing business is another.

Pay levels and the ability to attract qualified, trained and experienced employees are also a factor.

The guys making the corporate decisions, to stay and to expand in any location, will be made on the basis of a number of considerations.

If we do not score the highest points, the investment project can be lost.

Given that many of the companies locating in Ireland employ highly qualified personnel, they must pay the going rate — or better — to attract and keep them.

Conditions of employment are also important.

Government input, whether on tax or employment law, are critical issues, and a careful hand is needed.

Ged Nash, the Minister for State at the Department of Jobs, made some very interesting comments in an article last week.

He argued that profitable businesses should pay their workers a decent wage and also said that workers deserve to be paid enough money to enjoy a decent standard of living.

If you can tell me exactly what that means you should send your answer on the back of a postcard.

It sounds great but it’s very much a case of ‘whatever you’re having yourself’.

It sounded like the usual lot political posturing coming up to an election.

But more interesting was his point that profitable companies should pay a decent wage.

Let’s look at Ireland as a business, and it is a business for all intents and purposes.

Indeed, we used to refer to the efforts of everybody in Ireland Inc to attract FDI.

Ireland has not been profitable for a long time.

Yet there are those at the top of the public sector who are paid much much more than a decent wage.

In fact, those at the very top are doing very well indeed and, what’s more, their salary increases are linked to their colleagues — and that includes Mr Nash.

I came across a review of the salaries paid to the presidents and prime ministers — chief executives if you wish — of 25 countries.

The objective of the article was to compare Enda Kenny’s salary with his peers.

Of the 25 companies shown, Enda came in at number 12 on the grand salary of €185,000.

Vladimir Putin of a vast and populous Russia, for instance, appears to be only worth €125,745.

François Hollande of France — - the second or third biggest economy in Europe— appears to be receiving only €179,665. So what then is a decent wage?

In an election year we should not be raising folks’ expectations, given the importance of balancing out the need to attract employment opportunities while paying workers liveable — or even decent — wages.

Without doubt, people should be rewarded for their efforts and their outputs. However, political hyperbole is not going to make that happen.

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