Michael Noonan: Investment is still strong

Finance Minister Michael Noonan says he expects the US regime under Donald Trump to overhaul its tax system but added that foreign investment here remains strong.

Speaking at the World Economic Forum in Davos, Mr Noonan also revealed that firms from Britain inquiring about moving here are asking if there are good schools for their children.

His comments came after British prime minister Theresa May’s indication of a hard Brexit earlier this week and as the US prepared to see a new president in Washington yesterday.

In an interview with Bloomberg, Mr Noonan was asked about President Donald Trump’s pledge to significantly reduce business taxes in the US.

Mr Noonan said he spoke with officials in Washington before Christmas and got the sense that tax changes are coming down the line. He said it did not matter if Democratic candidate Hilary Clinton had been elected, as tax changes were inevitable.

Mr Trump needs to deliver on his election promises between now and June and there is a “political window” before the next electoral cycle in the US begins, noted Mr Noonan.

Asked how this might affect Ireland and if firms would repatriate to the US, Mr Noonan said he does not expect US firms here to change their accounts. However, he did not rule out companies returning to a lower tax regime in the US.

The pipeline of investment into Ireland is very strong, he added. Ireland has seen more investment here in the last two years compared to the last 10, he added.

He also spoke about the time he met Mr Trump when the property tycoon came to visit his golf course hotel development in Ireland in 2014.

Mr Noonan said at the time he thought the businessman and reality TV star was an “affable gentleman”.

Asked about relations with the US, Mr Noonan stressed that Ireland’s relationship is based on its work with the administration and not the individual in power. The relationship will remain “professional and business-like”.

“It is the office that matters to us rather than the personality,” he said.

Speaking about Brexit, Mr Noonan also stressed that Britain will have to play by international rules after it exits the EU, restricting any opportunity to use tax breaks to attract investors. Theresa May will be bound by the Organisation for Economic Cooperation and Development’s guidelines after Brexit, he said.

The Government here is hoping to woo British-based businesses and firms to move to Ireland because of Brexit. Mr Noonan said this week that 100 firms have made inquiries about relocating to Ireland.

Mr Noonan also confirmed that those firms and individuals with them had not only asked about infrastructure for employees potentially moving here but also about facilities for their families. Firm inquired about “getting their teenage children into good schools in Dublin”, he revealed.

However, the Government is now under pressure to ensure employment relocates here, especially with the confirmation that a hard Brexit is likely, a move which may see border restrictions, fresh tariffs applied to trade and a disruption to business between Ireland and Britain.

An Oireachtas Committee heard this week that up to 40,000 jobs could axed, 50% tariffs could be applied to Irish foods, and the national debt may surge with a hard Brexit.