American Chamber CEO Mark Redmond calls on Goverment to double down on FDI Photo: Fennells Photography
Issued 11 September, 2019.
- In light of Brexit and a predicted slowdown in the global economy, American Chamber calls for Government to deliver a confident message to the world that Ireland is open for business
- American Chamber says competitiveness is key in the drive for more FDI, with commitment to delivering infrastructure under Project Ireland 2040 of paramount importance
- American Chamber highlighted the importance of a competitive personal tax regime as a means to retain and attract FDI
The American Chamber of Commerce Ireland’s Pre Budget 2020 submission highlights the importance of the country’s competitiveness, particularly in light of challenge such as Brexit, trade tensions and the potential slowdown in the global economy. The American Chamber believes it is more important than ever for Government to present a confident message to the world that the country is open for business, particularly at a time when there is a global news focus on Brexit which includes potential negative impacts on Ireland. In this context, the St Patrick’s week trade missions and the Global Ireland programme will be particularly important next year.
The American Chamber submission also calls on Government to accelerate Project Ireland 2040, as it believes resolution of Ireland’s infrastructure bottlenecks including housing, roads and broadband is extremely urgent if Ireland is to maintain its status as a ‘go to’ country for FDI.
The provision of accommodation is a critical economic enabler that should be a continuous priority for planning and capital investment. The delivery of housing commitments is essential for Ireland if we are to remain a location that retains and attracts world class talent.
The Chamber welcomes the uptick in construction in housing in the past year. The resourcing of the Land Development Agency and Planning Authorities would further encourage the construction of the much-needed accommodation.
To further the ambition to accelerate the delivery of Project Ireland 2040, the American Chamber has proposed placing the responsibility and leadership for the Project Ireland 2040 Delivery Board within the Department of An Taoiseach, supported by a fully resourced Investment Projects and Programmes Office. To ensure that Project Ireland 2040 is attuned with emerging competitive threats the American Chamber recommends that Delivery Board review project priorities and make recommendations to expedite identified critical pro-employment infrastructure projects in light of Ireland’s 2019 National Risk Assessment Report and the National Competitiveness Councils next ‘Ireland’s Competitiveness Challenge.
American Chamber is calling for Government to tackle the higher marginal income tax rate of marginal income tax rate of 52%, which when combined with when PAYE/PRSI and USC, is among the highest when compared with countries that Ireland currently competes with for investment. The relatively early entry point that income is exposed to the highest marginal personal tax rate is uncompetitive for a traded economy reliant on a highly mobile labour market within Europe.
The American Chamber is very supportive of the Disruptive Technologies Innovation Fund to address the national policy challenges as a ‘Challenge-Centric’ method for aligning innovation investment with public priorities. We ask that future calls promote industry leadership, encourage MNC-SME-HEI linkages and builds on established eco-system strengths to deliver projects of measurable impact within 3-5 years that include public service delivery challenges.
Inward investment is key to the R&D ecosystem in Ireland; 69% BERD in Ireland is by foreign companies. Research shows that tax incentives have a clear advantage over direct funding FDI investments and tax credits have become increasingly popular method of driving R&D investment across OECD countries. Key recommendations in our submission to the recent Review of the R&D Tax Credit Regime consultation included an increase to current limits for providing contracted R&D services and increasing administrative clarity and consistency.
Speaking about the Pre Budget 2020 Submission, Mark Gantly, President of the American Chamber of Commerce Ireland said:
“The durability and importance of the FDI in Ireland as a stabilising factor within the Irish economy. FDI is a significant success story for Ireland; according to the IDA for every 10 jobs created in an FDI competition another 8 jobs are created in the wider economy. Collaboration and knowledge transfers between MNCs and SMEs are vitally important to creating a sustainable economy. While there is acute awareness of the Brexit threat, we view FDI, and US FDI in particular, as a potential buffer for the Irish economy which needs to be protected and nurtured.
Notwithstanding all of the Brexit negatives, it is important for Ireland to recognise and act upon the opportunity that Brexit presents for FDI in Ireland. We have a unique offering and we must not lose sight of this among all of the Brexit uncertainty. Our location, our position as the only native English speaking country left in the EU, the depth of our talent pool, and our long and proven track record as a base for US companies to trade into EMEA and beyond – these are all the strengths which Ireland needs to play to. In view of this, maintaining and enhancing our competitiveness is an essential component of future economic success.”
Read the Chamber's Pre-Budget Submission