Dr. Mark Cassidy:

There is a lot to what the Chairman has said. As a result of the presence of multinationals, it is well recognised that our headline GDP is overstated as a measure of the incomes of the economy. GDP is probably in the region of 40% higher than GNI, which is what we get when we adjust for some of the practices of multinationals that relate to depreciation of intellectual property, depreciation of aircraft leasing and what is called contract manufacturing. These are activities that do not really contribute to the Irish economy, but they do add to the headline GDP. One impact of that is exactly what the Chairman mentioned, which is that it sometimes means our contributions or receipts to and from the EU are affected because the denominator is GDP rather than GNI*. I have heard what the Chairman is describing in terms of what we receive but consider, for example, something rather simple. If a country's contribution to the European Union is a percentage of its national income, and if GDP is used for Ireland, we are paying a much higher share than if GNI* was used. It is the case that our contributions to, and in some cases returns from, the EU can be affected because of this measurement issue of national income. I would not deny to that extent but in considering the contribution of multinationals, while corporation tax is important, it is only one element. It is not just exports. The overall multinational sector employs more than 350,000 people. These are high-skilled jobs with above average wages. They create a demand for skilled work and they have other spillovers in the environment and in local communities and also in terms of productivity and innovation technology. The benefits from the multinational sector are much greater and more intrinsic than just corporation tax. It is very important that the sector remains healthy and is encouraged in the State.