Enda Kenny (Mayo, Fine Gael) | Oireachtas source

I thank Deputy Martin for raising a number of important issues. I have referred to the circumstances in which Governor Brown made his comments. He is well aware of the situation that applies here in Ireland. I have been in the Apple plant in Cork on a number of occasions. It is a huge operation with a workforce of 4,000. It is at the leading edge of technological development globally. As I have often pointed out before, the iPhone that comes from Cork, which is where the workers pay their tax, might be sold internationally, where VAT or other taxes might apply. The intellectual property is vested in California.

When the European Council discussed the situation that has arisen in recent years, as the technological and digital world has moved so far in advance of the legislative world, there was genuine agreement and enthusiasm about the need for a global response to this problem. The OECD was mandated to deal with that. A number of European countries that were reluctant in the past to come on board regarding the global response to base erosion and profit sharing - these countries are well known to the Deputy - are now enthusiastic about doing so. As the Deputy knows, Ireland is not the only country that is being investigated in an opening position by the European Commission. A number of other European countries are being investigated. We are not being picked out here. Some cases have been publicly highlighted.

I agree that it is very important for there to be certainty about the rate of tax. When discussions have taken place at the European Council, at the European Commission and at OECD level, there has never been any mention of any requirement to change the rate of tax. As has been pointed out by the Government, including by the Minister for Finance in his Budget Statement, there will be no change in the rate of corporation tax here. It remains at 12.5%. That is the position. The Deputy correctly pointed to the need to provide certainty to the workforces of the companies that are here about the longer-term future of investment and the continuation of employment. Clearly, when something goes off-patent in the pharmaceutical area, it might not be manufactured to the same extent in the plant for the future. That is why there is always a conveyor belt under the FDA regulations for the approval of new drugs and new products.

That is something that goes on all of the time. I would point out that, for instance, Intel as a global company has been here in Ireland for a very long time. It is only in the past couple of years that it mandated or challenged an Irish engineering group within the plant to develop a chip, which was what it called the Quark chip, which was developed and produced, as distinct from being manufactured, in Ireland. The intellectual property is obviously vested here in respect of that particular item.

The Government, in making its decision in respect of the ending of the double Irish, had a lot of discussion about this. Quite a number of companies had already come to the conclusion that this was what should be done and what would be the best thing to do. By doing so in the budget recently, Ireland has again taken up a leading position, and not just a position that leads us into an area of uncertainty or confusion. We have set out with great clarity the period to 2020. From 1 January, incorporation for new companies coming here will be required to register in respect of where the company is registered.

Obviously, Government has considered also the question of the information box, or patent box as it is called. Deputy Martin is well aware that there are a number of these that apply in different countries in Europe. Some are more successful than others. Some are not wanted by other countries, but the Deputy is quite right, in that Great Britain is now competing, and has been competing for some time, with Ireland for particular industries. We need to be able to adapt to that in a competitive sense, and we will. There is a requirement that there be public consultation and quite a deal of discussion about the particular form of information box and the rate at which tax should apply to it for incorporation of intellectual property or whatever here. That will be led by the Minister for Finance and the Department of Finance. I think that is an important discussion for the next future phase of development in Ireland.

I would say that, having dealt with all of this, having got rid of the stateless concept and having dealt with the double Irish, and when looking at Ireland's position and the advantages that we have, we have our 12.5% rate. That will continue to apply, but in addition, we have the advantage of our track record, as Deputy Martin is well aware, over very many years, we have the advantage of being able to measure up to whatever are the technological changes and technological requirements, and over and above both of those we have an extraordinary talent pool when challenged coming through the business world, the academic world and the college of technology world. Young Irish engineers, as one example, have been able to create and change even the most sophisticated level of engagement by multinationals. That is something that will continue to make us a very attractive and even more competitive location for foreign direct investment, with the opportunity to create jobs and services to supply those industries.

The climate change issue is the central point of the European Council meeting on this Thursday and Friday. There will be, in addition, references to dealing with the Ebola crisis and the financial difficulties that apply in some countries. I would say that we have had quite a deal of discussion about this at different Cabinet sub-committee meetings. For me, it is a fact of life that, whatever sources put together the information package that the previous Ministers had to go and deal with in Brussels, it left us and leaves us in a position where the 2020 targets are very difficult to achieve. If that sort of position were to continue between 2020 and 2030, it would leave whatever Government is here in a very unenviable position of having targets that were set on the basis of, in my view, incorrect or not comprehensive information and would be very difficult to achieve. The first fine, as the Deputy knows, is €500 million and the second one is €1 billion. The situation that we were discussing all of last week and this week before we get to the European Council meeting is how can one deal with this in a way that will give Ireland achievable targets up to which we can and want to measure.

One of the problems is the problem of success. For years in this country, we were constrained in what we could produce from the dairy sector in terms of milk and the products that come off that. Quotas go in 2015. That will mean a very significant increase in output from the dairy sector in Ireland. Money has already begun to move through the system for land purchase. The decision last week to allow longer term leases, the investment in different paddock arrangements for young dairy farmers and the backup for the agricultural colleges mean that people see real opportunities here. There are real opportunities here. Investment of €100 million by Kerry Group in Naas and something similar on the Carlow-Kilkenny border by Glanbia mean this is an opportunity, but it brings with it, naturally enough, a higher emission content.

The argument being made internationally is that Ireland is a country that is already carbon-footprinting the majority of our dairy sector, one of the first in the world to do so. We want to continue that. We are producing high-quality food with great integrity, and we can produce so much more. We should not be restricted by virtue of the emissions argument from so doing to the detriment of that volume of food, which is produced in other countries with lesser standards and no regard for emissions at all in some cases. It means that, if one applies the targets to be set on a per capitaincome basis, Ireland would be measuring up in the context of the highest achievers - Germany, Denmark and so on - which would leave us in a very, very difficult position. What we need is a recognition that, in a country like Ireland, where so much of the percentage of our GDP is produced from the agrisector, this is a part of the process of dealing with food production on the one hand where there is a food shortage internationally and, on the other hand, wanting to meet targets that are practical and achievable for us.

That is why the Minister of State and the Minister for Agriculture, Food and the Marine have had a lot of discussions about the forestry sector, which, as the Deputy knows, can act as a sump in terms of carbon emissions, and whether it is possible to have that rolled into the process of determining what Ireland's targets for 2020-30 can be. That is a very difficult argument to get across to other countries and other leaders, in that we produce so much from the agrisector. I am glad to say some progress has been made on it in the past number of days. The "agriculture" phrase is coming more and more into focus as to what it can actually mean for a country like Ireland.

I do not want to go to the European Council meeting the next day and have real difficulties in the knowledge that the traditional and current progress would land this country in a very difficult position from 2020 to 2030. I hope the discussions over yesterday, today and tomorrow before we get to the European Council can bring about some clarity on where we can arrive. We want to measure up to targets, but they have to be targets that are practically achievable. Given what we can produce for the future from the agrisector, particularly the dairy end of it, we should not be inhibited from being able to continue to produce high-quality food that is very necessary for other nations and millions of people and that Ireland can supply to the very highest standard.

Sorry for the long reply, a Cheann Comhairle.

See this speech in context