Dr. Mark Cassidy:

I will make a couple of points on that question. First, it certainly is the case that multinational contribute significantly. Their contribution is extremely welcome. There are some issues in regard to the measurement of their output, but they contribute in a very real and meaningful way to export, employment and the public finances and also in terms of positive spillovers, including technology spillovers that help to upskill workers. The multinationals make an extremely positive contribution but our output figures show quite a degree of reliance. When that is the case, we need to look at whether the economy would be resilient in the event of either a firm-specific shock - we should keep in mind that a small number of firms dominate output in many of these sectors - or a sector-specific shock in a context where, for example, the pharmaceutical sector and the IT services sector dominate. We need to ensure that we would be resilient in such an event. We are not anticipating any reduction in the size of the multinational enterprise, MNE, sector but we want to be resilient because there is always a risk.

There are three things that need to be taken into consideration from a policy perspective. First, policies need to remain supportive of the multinational sector. We must remain a good place for multinationals to do business. Most of these sectors have been embedded in the economy for a long time. They are here for the long run and we need to make sure we remain a favourable location for business. Second, we need to make sure that, complementary to the MNE sector, there is a successful Irish-owned sector. It is indigenous SMEs that provide most of the employment - up to 1 million people - in this economy. There are issues in this regard. There is significantly weaker productivity among Irish-owned firms than there is among multinational firms. Policy needs to ensure that we also have a productive, innovative and expanding indigenous sector.

The third point relates to corporation taxes. We have developed a very high degree of reliance on those taxes. I understand that 20% of our overall tax revenues now relate to corporation taxes, which is extremely high by historical standards. That revenue source is dominated by multinationals and it means that if there were to be any shock to the overall balance between revenues and expenditure, it could be a shock akin to what happened when we had a degree of reliance on the construction sector back in the 2000s. We need to ensure that our public finances are not overly reliant on the tax revenues from multinationals and that we do not make decisions about permanent spending increases based upon revenues from corporation taxes that could turn out not to be sustainable over the long term. Again, I am not making a prediction in that regard. It is just about being prudent in terms of management. I would point to those policy areas in response to the Deputy's question.