Seanad debates

Wednesday, 23 February 2005

5:00 pm

Photo of Terry LeydenTerry Leyden (Fianna Fail)

Research and development in Ireland is growing at a phenomenal rate, signifying the Government's vision of Ireland becoming a knowledge economy with leadership in the areas of life skills, medical technology, software and information technology. This vision is becoming a reality due to the Government giving high priority to funding research and development. The national development plan commits the Government to expenditure of €2.48 billion on research, technological development and innovation.

The Finance Act 2004 provided for a tax credit of 20% in addition to a tax deduction at 10% to 12.5% for research and development expenditure in Ireland. The tax credit is available to Irish tax resident companies engaged in in-house research and development. This gives a potential tax write off for incremental research and development spending of up to 32.5%.

Since 1 January 2003, the corporation tax rate on trading income has been 12.5%. This is one of the lowest corporate tax rates in the European Union and one of the lowest onshore rates in the world. A low rate of corporate tax of 10%, known as manufacturing relief, has traditionally applied to deemed manufacturing activities and certain international financial services activities carried out in the International Financial Services Centre in Dublin, and a broad range of activities carried out in the Shannon Airport zone. Members should note that corporation tax applies to all enterprises, indigenous and foreign owned.

On reflection, the Opposition should not move its amendment which states that Seanad Éireann:

—notes the low rate of Corporation Tax that led to a huge increase in the number of foreign owned companies and thus employment; and [recognising the contribution of the Government]

—calls on the Government to adopt a similar low tax strategy for the indigenous sector" [which it has done].

We have complied with the Opposition amendment to this motion. The Opposition should not move the amendment but should agree to the Government motion.

I welcome the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Michael Ahern, to the House and compliment him on his excellent work. He has fought the good fight for Ireland, particularly when abroad, where he has assisted the good performance of Enterprise Ireland and the marketing of Irish goods.

We have a proud record. Our trade is expanding dramatically and jobs are developing as a result. Ireland is well placed given the expansion of the EU to 25 countries. As the responsibility for passing the Nice referendum was ours, it is a good selling point abroad to the new EU entrants that Ireland was the country which gave the green light for their entry. Our trade has expanded in those countries. Irish enterprise is developing in all the applicant countries and those which have joined. This trade will create jobs at home and abroad and will provide further opportunities for our people to develop abroad.

We have a proud record in north County Kildare and County Meath. I am satisfied that as a result of Government policy the results will be very positive on 11 March. I wish our candidates every success. They are standing with great confidence, knowing that the Government introduced the policies we have pursued. It is no accident that 1.9 million people are at work, the highest level of employment ever in the history of the State.

My experience abroad as Minister of State with responsibility for trade was that Irish products are well regarded and of a good quality, particularly in the food sector where there is complete traceability. Exports continue to rise. It is important the image of Ireland as a green, wholesome, healthy nation is maintained at all costs. We must ensure that the policy decisions made by Government will enhance this selling point. We are fortunate that Ireland is regarded throughout the world as a country that produces good quality products and, therefore, sales have increased.

The Minister, Deputy Martin, and the Minister of State, Deputy Michael Ahern, continually lead trade missions abroad. I take this opportunity to wish the Minister every success in his difficult portfolio and am glad he has the support of his experienced Minister of State. I congratulate the Tánaiste and former Minister for Enterprise, Trade and Employment, Deputy Harney, who was exemplary in her role at that Department from 1997 to 2004, during which time she tackled the high cost of insurance, working with the members of the Joint Committee on Enterprise and Small Business, under the chairmanship of Deputy Cassidy, who worked with the Department-——

Comments

No comments

Log in or join to post a public comment.