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News : Irish Last Updated: Sep 24, 2012 - 10:39 AM


Monday Newspaper Review - Irish Business News and International Stories - - September 24, 2012
By Finfacts Team
Sep 24, 2012 - 9:21 AM

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The Irish Independent reports that introducing further tax hikes in December's Budget risks stifling recovery in the domestic economy, Chartered Accountants Ireland (CAI) has warned.

With consumers still saving more than ever amid the prolonged downturn, there are fears that any attempt to squeeze more from taxpayers will firmly put the lid on any potential uptick in spending.

People will be paying the new property tax and are also facing ongoing pressure on their finances for a range of costs such as motor fuel and rising gas bills.

"There are two economies in Ireland at present," said Austin Slattery, president of Chartered Accountants Ireland, the largest representative body of the profession here.

"While internationally traded goods and services are holding their own in export markets, the indigenous domestic economy continues to struggle. Unemployment continues to grow. After five years of successive tax increases, we cannot afford the damage to the domestic economy any further with more tax hikes in 2013."

Retail sales

The latest figures from the Central Statistics Office show that the volume of retail sales in Ireland rose 0.7pc between June and July, but are down 1.5pc over a 12-month period. Since 2005, they have fallen 10pc. Excluding the motor trade, the volume of retail sales was 1.1pc higher in July than June.

The CAI said it accepts the need for property tax to replace stamp duty revenue, but insists that no other taxes should be raised by the Government next year.

Speaking to the Irish Independent, CAI director of taxation Brian Keegan said the country could be close to reaching a "tipping point" where further increases to the personal tax burden might result in declining Exchequer revenues.

He said rising unemployment remains a major issue, with each additional unemployed person costing the State about €20,000 a year when lost tax revenue and welfare payments are factored in.

The Government is aiming to raise €500m from the controversial property tax in its push for a €3.5bn fiscal adjustment in the upcoming Budget.

Expenditure cuts will account for €2.25bn of the planned adjustment, with tax increases accounting for €1.25bn.

But the Fiscal Advisory Council -- set up at the behest of the troika -- has called on the Government to make further adjustments equal to that planned in December's Budget in both 2014 and 2015. It says income tax increases shouldn't be ruled out to meet adjustment targets.

The Sunday Independent reported yesterday tat he chairman  of the Public Accounts Committee (Pac) John McGuinness has said he finds it utterly inconceivable that there is no record of crucial notes or minutes of meetings where former Minister for Finance Brian Lenihan and ex-Taoiseach Brian Cowen delivered frank assessments of the Department of Finance whose failings helped bankrupt the country.

After an almost two-year Freedom of Information battle, department officials have claimed there are "no records" of meetings that went on for hours between Mr Cowen and Mr Lenihan and a panel led by Rob Wright -- a former deputy minister for finance in Canada -- into why the department failed to prevent Ireland's financial Armageddon.

Kevin Cardiff, the department's then secretary general who was in charge of banking during the boom, has claimed that he had "no formal meetings" with the Wright commission and he kept no notes of informal ones. The department admits its records show Mr Cardiff was due to meet Mr Wright on both August 9, 2010, and August 10, 2010, but has no records of what may have been said.

"It is totally beyond credibility that no records of these meetings exist," Mr McGuinness said. "These were high-level meetings relating to the biggest decisions in the State's history. We are expected to believe that Kevin Cardiff was the head of banking, and no notes. Brian Lenihan was the Minister for Finance and we're told there are no notes.

"Brian Cowen was the Taoiseach and we are told there are no notes. Someone somewhere has a record of those meetings.

"When Kevin Cardiff was before the Pac, he was able to recall documents and emails instantly before our eyes to do with the €3.6bn error and redact sections. It is not credible that notes or records don't exist, or at least did exist at some stage," he said.

"Wright's report, which he produced in 2010, was described as 'thorough' by Lenihan but it has now emerged the Wright panel never interviewed former Taoiseach and Minister for Finance Bertie Ahern, the man arguably most responsible for our collapse.

The Sunday Independent spoke to three senior sources who spoke to Mr Lenihan many times during his time as Minister for Finance to try to gauge what he might have said.

They all said Mr Lenihan told them that he had "serious concerns" about some senior officials in his own department.

"Brian wasn't impressed by his officials and distrusted some of them," said a source who knew Mr Lenihan well.

"His view was there were officials who worked incredibly hard during the crisis but there were also other senior civil servants who were more concerned with protecting their own asses than the country."

Things got so bad, the sources said, Mr Lenihan held many crucial meetings with senior banking and business figures in the run up to the bank guarantee outside the walls of the department in order to prevent damaging leaks of his real fears.

Mr McGuinness, who is fighting to be allowed hold a bank inquiry, said it was vital that clarity emerged about what Mr Lenihan, Mr Cowen and Mr Cardiff told Mr Wright.

He said he could only do so if given the power to do so by Minister for Public Expenditure Brendan Howlin.

Mr McGuinness accused the Mr Howlin of abandoning his promise as there is no mention of it in the list of proposed legislation for this new Dail term.

Mr McGuinness said only a full independent inquiry as proposed earlier this year by the PAC will have the power to discover all relevant documents relating to the night of the bank guarantee, the decision to nationalise Anglo Irish Bank and the decision to establish Nama.

The Irish Times reports that the Government will use its presidency of the European Union next year to advance plans for a “youth guarantee” scheme that would ensure young people who are out of work will automatically be directed into employment, education or training.

Minister for Social Protection Joan Burton has said she will use the presidency, from January next year, to help deliver proposals for the new scheme, which would be targeted at any under-25s who are out of work.

She was unable to say when the scheme could be delivered or how much it would cost, but she expressed confidence that money could be sourced from the European Social Fund.

Latest figures from Eurostat, the European statistics agency, show unemployment among people aged 18-24 in Ireland is at about 30 per cent, while levels in Greece and Spain are just over 50 per cent.

“All the evidence is that a prolonged period of youth unemployment – especially for young men – is extremely damaging,” Ms Burton told The Irish Times. “The purpose of a youth guarantee is to reduce that period to as short a time as possible and offer alternative pathways.”

She said similar schemes in Austria and Germany – which have relatively low levels of youth unemployment – have proved successful.

Under the plans, which are still being drawn up at European level, governments would initially fund training, further education or apprenticeships for any young person who is out of work for four months or more.

As the job-seeker then gains more experience in the workplace, the employer would begin to pay.

Ms Burton said she would be hosting a meeting of other European social protection ministers in February of next year and would work “flat out” to push the plan forward.

“If the EU is to return to its founding mission, then it has to rebalance to include a really linked-up focus on how young people transition from school and college into the world of work.”

Groups such as Youth Work Ireland and the National Youth Council of Ireland have urged the Government to adopt some form of youth guarantee, but have pointed out that many young people cannot afford to wait much longer for support.

Fianna Fáil’s social protection spokesman Willie O’Dea said he supported any measure that would target youth unemployment, but said the youth guarantee plan sounded too vague.

“The bottom line is there are no jobs and about 100 people emigrating a day,” he said. “Training and education is fine, but to qualify into what?”

Many future training and apprenticeship opportunities will be available through Solas, a new agency which will replace FÁS. This authority will be responsible for the co-ordination and funding of further education and training through vocational education committees.

Ms Burton said she was keen to see courses and apprenticeships of high quality and to have close links with employers, as is the case in countries such as Germany.

In the meantime, she said reforms were under way to create a series of “one-stop shops” where jobseekers of any age could get advice and support on welfare and job opportunities. This is part of the Government’s policy of creating a social welfare service that is less impersonal and places a greater emphasis on giving unemployed people advice on training and job opportunities.

The first of these offices is due to be opened in Sligo shortly, while 20 more will come into operation over the coming months.

Ms Burton said she wanted to build closer connections between the welfare system and local employers and is planning a series of roadshows to promote these links.

The Irish Times also reports that thousands of job-seekers thronged the Convention Centre Dublin at the weekend in search of new careers, as some of Ireland’s major employers went on a recruitment drive.

Career Zoo covered everything from career advice for graduates and those who were looking for a change of direction to jobs in tech, pharma and other industries.

Candidates met companies, got information on the jobs on offer and submitted CVs to those firms in which they were interested.

To stand out from the thousands of attendees, some prospective candidates employed some unusual methods.

One man seeking a job at Twitter customised a T-shirt outlining his intention to work at the firm as an account manager, and included a QR code that linked directly to his CV when scanned.

It impressed the Twitter team and its director of online sales and operations for its international business, Stephen McIntyre, so much that the picture made it into a talk he gave at the event.

“Twitter is not just a trivial product; it’s a transformational platform. I wanted to be a part of something bigger that had some sort of a world impact,” McIntyre said. “Many companies do and Twitter is one of them.

Employees still had the chance to become one of the first 50 employees at the firm, he told listeners, but it wouldn’t be that way for long.

The company is hiring for its international office on Dublin’s Harcourt Road – incidentally, the same place at which Google Ireland was previously located.

Although the international heavyweights were present – Microsoft, AOL, Amazon – plenty of Irish firms were recruiting too, including Blueface, Swrve and FeedHenry.

Enterprise Ireland is backing an initiative aimed at promoting career opportunities in Irish-owned software firms.

“This is all about Irish-owned software companies,” said Anne Lanigan, senior development adviser with Enterprise Ireland.

“They’re mostly quite small, very innovative and the kind of work they offer is really exciting. When you work in there, you’re really part of everything that happens in the company.”

About 1,500 tech jobs were available at indigenous Irish firms at the event, and former Irish soccer international Niall Quinn was there to help promote the initiative. Quinn is now heading up satellite broadband firm Qsat, which specialises in bringing high-speed broadband to parts of the country not currently served by fibre or DSL.

“We’re on the cusp of going down five or six different channels now, for example maritime broadband,” he said.

“To do that, we need skilled experts and they’re not easy to find. If we get one good one from the likes of this event, they’ll bring everyone else on in the office, and within a year or so we’ll have five or six people upskilled.

“The sector has proved its resilience in the toughest time that this nation has ever seen and this event is about reminding people of that.”

The event was generally considered a success by organiser Brian Ó hOisín, who arranged Career Zoo with Jackie Slattery and the companies recruiting.

“We’re extremely pleased. The employers are all delighted with the quality of the applicants as well as the number and the feedback has been overwhelmingly positive,” Ó hOisín said.

“It’s been a really exciting day – great energy and buzz in the room. LinkedIn is great, but it’s quite something to meet someone in person, make an impression, and that works.”

Another Career Zoo event is planned for February.

The Irish Examiner reports that a Canadian recruitment company, Diamond Group of Companies, has set up its Irish and UK headquarters in Dublin as it searches for 1,000 people to work in Canada.

Diamond Global Canada is aiming to recruit 1,000 people from Ireland over the next year and maintain the level of recruitment for five years in order to plug Canada’s labour shortfall.

President of Diamond Group of Companies, Audrey Guth, said: "Ireland will be our headquarters for Europe and the UK because we expect to be able to source a sizeable percentage of our recruitment targets here in Ireland. We are looking to Ireland not only because it is a visa exempt country but because it is an excellent source of skilled, English speaking individuals with an excellent work ethic. We plan to recruit 1,000 workers for our clients within the next 12 months. This demand is projected to continue well into 2016."

It is predicted that there will be a shortage of workers in Canada for the next five years. The country will need an average of 150,000 temporary foreign workers annually in an effort to address shortages and keep Canadian industry moving.

The jobs on offer through Diamond Global Canada are in construction, food service and skilled trades in the mid-western provinces of Alberta, Saskatchewan and Newfoundland on the east coast. The jobs carry temporary contracts of up to two years.

Certain temporary skilled workers can now apply for permanent residency after just one year working in Canada following a ruling earlier this month by Canadian immigration minister Jason Kenney to reduce the term to one year from two.

Ms Guth, herself an immigrant, said: "I moved from the United States over 25 years ago. In addition to good careers in a stable economy, this vast country offers a wonderful lifetime opportunity to explore everything from our multi-ethnic cities to the natural wilderness that Canada is so famous for."

Foreign news reviews and more comprehensive coverage of Irish news is available in our Daily News Digest in the Global category on Finfacts Premium.

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