Fresh focus on multinational tax may sour Donohoe’s plans

Further strong growth in the construction industry has set the scene for Finance Minister Paschal Donohoe’s summer update of the Government’s economic and fiscal targets later this week, the last before his first budget in October, but a renewed focus on tax and multinationals by France could sour the upbeat outlook.

The Ulster Bank index, which tracks purchasing managers in the construction industry, and which showed two of the three parts of the industry — commercial and housing — growing “rapidly” in June, and business confidence at a 10-month high, will boost confidence in a key part of the economy. The findings may also likely raise questions about whether the industry really needs any further substantial injections of taxpayers’ cash, as construction employers step up calls ahead of the budget for Mr Donohoe to increase spending on everything from intra-city and inner-city roads, rail and ports.

The Irish Fiscal Advisory Council (IFAC) and the Economic and Social Research Institute have in recent months separately warned about the construction industry sucking too many resources from the rest of the economy.