Kieran O'Donnell (Fine Gael) | Oireachtas source

This is a share options scheme and it is about retaining highly-skilled, valued employees. It has two aspects. It is fair to ask about opportunity costs because it is not only about the tax take. If one loses these individuals, there will be no share options and, as such, no tax will be forgone. It is also good for companies to divest the shareholding to employees. This allows employees to own 15% of a company while 85% will be retained by the original holders.

Looking at this measure straight on, the point the Senator is missing is that if one does not have the scheme in place, one runs the risk of losing intellectual property and capacity through the loss of vital members of staff to companies in the UK, for example, or elsewhere in Europe. We all know of companies, particularly smaller ones, which find it impossible to compete with the large multinationals and to retain staff. I have seen it myself. I was in practice for many years and had start-up clients. I found typically that it took three years to be in a position to survive and five years to make a profit. After that, they were suddenly expanding. They were getting young vibrant people in to take up positions. In many cases, it was those people's first or second job. After they had received five or six years' training in these cutting edge companies, those companies could not hold them. The big boys came looking and they took the staff.

This measure is not about tax forgone, it is about opportunities lost. The Senator should look at it from that perspective. If it is not put in place, we would not even be talking about the share options and we would lose key staff. Obviously, it will have to be reviewed, but we have to be innovative in a globalised world. We have to put measures in place which retain intellectual property and allow indigenous Irish companies to grow and become the multinationals of the future. It is great that multinationals are coming in, but I want to see our own flourishing indigenous companies become the multinationals of the future. This measure will help to achieve that.