Cormac Devlin (Dún Laoghaire, Fianna Fail)
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37. To ask the Minister for Finance if he will report on his Department’s assessment of labour market developments in the multinational sector and their possible impact on tax revenues; and if he will make a statement on the matter. [27868/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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In aggregate, the labour market is in a strong position at present.

The Labour Force Survey, published last week, shows the level of employment increased to over 2.8 million in the first quarter, with three-quarters of the working age population now in employment. These figures have never been higher. The unemployment rate, meanwhile, fell to 4 per cent, its lowest rate since 2001.

While employment growth in the multinational sector played an important role in driving the labour market recovery since the pandemic, I am conscious of administrative data published by the Central Statistics Office which point to some moderation in employee growth in the sector last year.

That said, the survey data published last week are more encouraging, suggesting that employment in the multinational sector has picked up in the first quarter of this year. For instance, sectors which have a large multinational presence - such as the Financial, Insurance and Real Estate sector, as well as the ICT sector - recorded very strong annual employment growth. This is consistent with relatively strong income tax growth that we have seen in the opening months of the year.

Government, of course, is not complacent and we are conscious of the threats to Ireland's economic model from the current wave of 'de-globalisation'. While not our baseline scenario, any decline in inward investment would have implications for tax revenue, including income taxes. This is why, for instance, we produced scenario analysis in the Annual Progress Report which showed that the tariffs introduced in April could lead to around 25,000 fewer jobs created by the end of next year.

This would, of course, also result in a further slowdown in tax revenue and underscores the importance of continuing to pursue a sustainable approach to budgetary policy.