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Thanksgiving Business Lunch

The American Chamber of Commerce held its Annual Thanksgiving Lunch today which was attended by 400 representatives and guests of the US multinational community in Ireland.

Guest of Honour at the lunch was Minister for Finance, Michael Noonan TD. Addressing more than Mr. Noonan said;

"I note that this year marks the fiftieth anniversary of the Chamber's establishment in Ireland and I want to congratulate all concerned on nourishing and developing the economic and business links between our two nations over the past fifty years. The success of these links is visible to all to see. The US is the single largest source of Foreign Direct Investment to Ireland with approximately 600 companies employing 100,000 people directly.

The Government is committed to returning the public finances to a sound position and thereby create the conditions necessary for the attainment of strong, sustainable employment growth. Through a combination of economic recovery and further fiscal consolidation our medium term strategy is to bring the deficit below 3 per cent by the mid-part of this decade. I believe that this medium term approach strikes an appropriate balance between the need for consolidation and the need to nurture the emerging economic recovery."

Concerns within the US multinational community about Ireland's solvency and its corporate taxation policy have lessened considerably according to Gerard P. Kilcommins, President of the American Chamber of Commerce in Ireland.

Speaking at the lunch, Mr. Kilcommins said; "The Government's steadfast commitment to restoring fiscal order and the retention of Ireland's 12.5% corporate taxation regime have greatly alleviated the concerns of US multinationals investing in Ireland. We have gone from being a virtual outcast in Europe to being the standard-setter, not simply for austerity, but for setting the right economic and fiscal course and having the nerve to stick with it. We have restored stability, both economically and politically, and with that our reputation has begun to heal".

However, he said there was no room for complacency and that Ireland "must remain nimble and responsive to a highly uncertain and fast-changing global environment to provide sustainable investment and employment opportunities."

Mr. Kilcommins said; "For the economy to grow in the future, we need to be able to attract highly skilled people from around the world. Just as the Government provides a pro-business environment in Ireland, there also needs to be a focus on Ireland's ability to attract people with specialised skills and talent, including key decision-making senior executives, to locate here. These executives generally have the ability to dictate where investments opportunities are made and jobs created.

"There is huge competition for this talent. Other countries operating competitive and user friendly regimes in this area include the Netherlands, Israel, France and, most recently Cyprus. It is not a matter of creating a special incentive to attract high earners into Ireland - it is a competitiveness issue which is ultimately a matter of attracting investment into the country.

The American Chamber has made a number of recommendations in its pre-budget submission to Government. In particular there is a need to make changes to our Special Assignment Relief Programme in order to make it effective and operable".

The American Chamber of Commerce also reiterated the importance to Ireland of securing R&D investment for Ireland. "R&D investment in Ireland is absolutely vital because, more and more, if we are not involved in R&D we lose the opportunity to secure commercialisation, manufacturing and service-related activity in our Irish operations as well. And this means jobs"

Opportunities exist, according to the Chamber, for the current R&D Tax Credit to be amended to greater support investment in Ireland. "It is critical that the R&D tax credit regime remains effective, workable and certain," Kilcommins said, who added that the so-called ‘base-year' issue was a hindrance to some companies "For a number of companies the fact they undertook R&D in 2003 is hampering their ability to compete for new investment projects".

"This is proving to be a pivotal matter in making investment decisions and is putting Ireland at a competitive disadvantage. We have made a number of proposals to Government in our pre-budget submission aimed at making Ireland more competitive for R&D investment. These include amending the base year or credit available for all new investments and giving companies an option to claim the existing 25% credit on an incremental basis or claiming a lower credit - say 20% - on a volume basis".

Mr. Kilcommins concluded by saying that Ireland must maintain a relentless focus on costs. "Ireland is considered a high cost location to do business. The National Competitiveness Council has a series of recommendations for the reduction of costs, and we would like to see these implemented as a matter of urgency. All the evidence from our members is that Ireland's cost base remains a dead-weight on competitiveness and hence job creation. However, the glass is more than half full and while on a global level, economic uncertainty will continue, Ireland can be confident of our ability to weather the storm and find our way onto calmer waters".

Today's Lunch was sponsored by United.