Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

243. To ask the Minister for Finance the effect on gross domestic product or likely effect of the move by a company (details supplied) to domicile here; and if he will make a statement on the matter. [24988/16]

David Cullinane (Waterford, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

244. To ask the Minister for Finance in view of the exceptional increase in gross domestic product, GDP, in 2015 due to asset transfers with no discernible impact on the real economy, the effect on GDP figures of the recent announcement by a company (details supplied) that it plans to shift €30 billion in assets to Ireland; if his Department expects any more announcements of multi-billion euro asset transfers to Ireland; if so, the effect his Department expects them to have on GDP and GNP figures; and if he will make a statement on the matter. [24992/16]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 243 and 244 together.

I will not comment on company specific developments.

On the more general point, it is clear that Irish economic aggregates i.e. GDP and GNP, have been heavily influenced by corporate restructuring and a number of balance sheet reclassifications in recent years.

In particular, beginning in 2008 a number of large multinational corporations have re-located their corporate headquarters to Ireland. These companies are regularly referred to as "re-domiciled PLCs". Typically, this does not involve the shift of substantive activity to Ireland. However, it does mean that corporate profits on worldwide activity are recorded as an income inflow. This has the effect of increasing GNP/GNI and increasing the current account in the balance of payments. However, it has no impact on GDP.

On the other hand, if a multinational corporation chose to relocate its intangible assets to Ireland, the capital stock of the economy would increase. This would have a positive impact on headline GDP. However, this would not have a direct bearing on employment and wealth creation for Irish citizens unless the relocation was linked to an increase in substantive activity in Ireland.

It is important to stress that Irish GDP/GNP statistics are produced to meet required international standards and that these activities are correctly included in Ireland's National Accounts and Balance of Payments statistics under the standards set by the UN, the IMF, Eurostat and the ECB. 

Finally, given the globalised nature of the Irish economy and the importance of multinational corporations, it is important to stress that Ireland's economy is highly complex and activity is more volatile than elsewhere. From a policy perspective, the best way to mitigate risks associated with this volatility and complexity is through prudent management of the public finances and by adopting competiveness-oriented policies. That is what the Government will continue to do.