‘Workers at major companies must get wage increases as Government defends corporate tax’ – minister
The Labour Party minister said the State was paying out €500m a year in “corporate welfare” through family income support and it was now time for big business to make more of a contribution.
“Many of those people are working for multinational organisations which arguably should be and could be paying their staff more,” Mr Nash told the Irish Independent.
“At the moment we have a phenomenon known as the ‘working poor’. A substantial cohort in this country who go out to work every day to provide for their families and pay their bills who are being subsidised to the tune of €500m with family income supplements,” Mr Nash said.
However, Mr Nash said attracting multinationals was a vital area of the economic recovery and sent a clear message to international critics of the country’s 12.5pc corporate tax rate.
“We will not put Ireland at a disadvantage to anyone,” added the Minister of State.
He said the country would “fight its corner” on the controversial tax and would never allow anyone “undermine our attractiveness as place for foreign direct investment”.
The minister’s comments follow mounting pressure from international leaders, including US President Barack Obama, for an overhaul of international tax rules.
Technology giants such as Google and Apple and international drug companies have been criticised for the small amounts of tax they pay on billions of euros of profit.
In Ireland, more than 160,000 workers are employed by multinational companies which pay around €4bn in corporation tax annually.
Budget measures focused on tax and job creation will be among the key topics discussed today as the Labour Party gather for its annual ‘think in’ at Whites Hotel in Wexford Town.
Speaking ahead of the conference, Mr Nash made the bold claim that the country could be back to full employment in three years’ time if the rate of growth and recovery continues.
“If we continue to move in the same direction, at the same pace over the next few years, we could reach a period where we would consider to have full employment by 2017 or 2018.”
Mr Nash’s estimates are almost three years ahead of previous forecasts.
He also said he wants to keep in place a controversial tax incentive for foreign executives who come to work here.
The scheme exempts executives from paying 30pc income tax on earnings between €70,000 and €500,000.
It was introduced to attract highly skilled workers but was criticised for unfairly burdening the average worker with tax hikes.
Last year, only eight employees availed of the Special Assignee Relief Programme for executives and it cost the State €63,000.
In 2012, when the tax incentive was first announced by the Government it was hoped it would be taken up by around 100 people and cost the State around €5m.
But Mr Nash said “talent is very mobile” and the tax exemption scheme was needed to bring top-class business people to Ireland.
“There were initiatives introduced a number of years ago to attract high-end talent and we would like to retain them.
“You will find Irish people are benefiting from similar systems elsewhere. It is a highly globalised economy, people are very mobile and can move from job to job very quickly.”
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