The latest figures are astonishing. The multinational sector in Ireland now directly employs over 300,000 people, well over 10% of the total number of people at work.
This figure does not take account of the thousands of others supplying services, from legal and accountancy to floor and office cleaning. We can see in the Government tax take the unprecedented flow of corporate taxes into the Irish exchequer.
This multinational, mainly American, investment and tax remittances have let the State hugely expand its spending to deal with the extra burden of both the COVID-19 pandemic and the effect of the Ukrainian invasion on energy prices. These firms are not typical business ventures. They are, in many cases, the leading companies in their field.
It’s great that they are here to contribute to our national prosperity. In many cases, they have world-beating technology and intellectual property – just think of Apple, Google or Pfizer. But where does this influx of such firms leave Irish companies and family businesses?
We can see in the Government tax take the unprecedented flow of corporate taxes into the Irish exchequer
As I see it, there are at least two major consequences. The first is the development of a whole governance climate that can easily be dealt with by very large, very successful businesses. The rules around everything from regulation of the workplace, to public procurement processes, to the administration of pensions, all of these areas have developed their own specialities with accompanying expenses that did not exist before.
Similarly, a new cost base is established in construction and planning, which of course spills over into house prices and rental charges. Add in a growing population and it’s not surprising that there are pressure points and that Ireland is recognised as a high cost country in which to live and do business.
We should also consider having different regulations and governance frameworks for smaller companies and private firms
This spills over into farming and the processing of our raw materials. We have to sell our products on international markets in competition with producers with much lower costs. Is our productivity superior or is the threshold at which our farms become full-time much larger? These are important national questions which deserve to be teased out so that we can be aware of our vulnerability and take steps to prepare for a change in national circumstances.
We should also consider having different regulations and governance frameworks for smaller companies and private firms. That principle has been established in the case of the new 15% tax rate, but it needs to be extended and modified to allow for the huge differences in businesses’ capacity and profitability operating here.