Joan Burton (Dublin West, Labour)

The Minister's reply does not quite reflect the fact that the assessment of these types of schemes is changing. It has changed very dramatically since the recent speech by President Obama in the United States. I said on Committee Stage that it is potentially very valuable to Ireland if the intellectual property elements of investments, particularly by multinationals with other economic activities in Ireland, are located here. I recognise this but believe, in the context of the comments made in the United States following President Obama's statement that the US Administration will be scrutinising increasingly the real nature of US investments attracting favourable tax treatment in jurisdictions such as our own, that one key focus of US policy makers will be the real content of the overseas activity of American companies. I refer to US companies employing people in overseas locations and carrying out real economic activities such as traditional manufacturing or intellectual property development, including the design of software. Therefore, it makes sense that the Minister should consider the proposal that an economic cost-benefit analysis of schemes be undertaken. In particular, the employment benefits of schemes should be noted and documented.

I accept the Minister has been advised there have been problems regarding EU state aid definitions - he has a battery of advice available to him - but he should note that we are moving into a different stage of the debate. The world economy is suffering from an incredible crash and recession, part of which has been caused by offshore activity in tax havens. Ireland is not a tax haven in this sense from an American point of view and we distinguish ourselves very sharply from jurisdictions that have been identified by the US authorities as being of concern, including various islands in the Caribbean.

There is much sense in the Opposition's proposal to carry out cost-benefit analyses and document activities to ascertain whether they are real and not simply tax avoidance mechanisms. Being in the Republic of Ireland gives companies engaged in manufacturing or intellectual property development access to a Europe-wide market. Therefore, a presence here is very valuable to US-owned companies and the United States itself. That is what countries such as Ireland are offering the United States in return for investment and jobs, about which they are delighted. There is considerable merit in the Opposition's proposal to have cost-benefit analyses. Given the state of the global economy, particularly the Irish economy, and our unemployment level, the Minister should determine the employment retained or created as a consequence of tax benefits that apply to any measures introduced by him in future budgets.

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