Independent reports that the number of people employed by IDA-supported
multinationals in Ireland jumped last year to its highest level since the crash.
Total employment in IDA-supported companies stood at 152,785 last year, up from
146,215 in 2011. The jump in jobs came as fewer jobs were lost and companies
continued to create employment at levels close to previous years.
Jobs Minister Richard Bruton said the results demonstrated that international
confidence had returned to Ireland.
"Some of the most ambitious and dynamic companies in the world are picking
Ireland as the best location to deliver their innovative services," Mr Bruton
Key figures from the IDA include:
- 145 individual investments were recorded
last year, with 66 from companies coming to Ireland for the first time;
- Announcements came from Apple, PayPal,
Northern Trust, EA Games, Fidelity Investments, Allergan and Eli Lilly;
- About 80pc of the job losses that hit IDA
companies in the crash have been recovered.
While the headline figure was stronger than at
any time since the crash began in 2008, the number of jobs created in 2012 fell
fractionally to 12,722, according to the end-of-year results from the IDA.
This was offset by the number of job losses in the sector falling to their
lowest level in a decade at 6,152, meaning the net job creation was 6,570.
About 4,000 of these were in the ICT/technology sector.
However, the figures account for jobs agreed between the companies and the IDA,
and do not necessarily mean that all the positions were filled by the end of
Mr Bruton hailed what he claimed was a strong performance from the technology
sector, which accounted for the bulk of the jobs. Other growth sectors included
social and digital media, international financial services, pharmaceutical and
IDA chief executive Barry O'Leary said he was confident of meeting similar jobs
targets next year, despite the global challenges.
"Key global markets are slowing down, particularly in Europe, which is a key
focus for the IDA's existing and potential clients," Mr O'Leary said.
"However, there are definite opportunities for growth in the IT and technology
sector, in specific areas of financial services, in life sciences, in social and
digital media and in sectors where consolidation is taking place on a
The IDA has set itself the target of creating 62,000 new jobs in the four years
between 2010 and 2014.
Mr O'Leary said there were large-scale projects in the pipeline to be won, but
Ireland faced stiff competition.
Meanwhile, Mr Bruton staunchly defended the Government's 12.5pc corporation tax
rate amid the debate in the UK and US concerning the taxes paid by
Mr Bruton described the tax rate as "strategically important to Irish economic
recovery", and claimed Ireland had a clear and transparent tax strategy.
"The scrutiny of corporate tax that's occurring in other countries would be
misplaced in Ireland," Mr Bruton said.
"International evidence shows that the effective tax rate in Ireland is 11.9pc,
very close to the nominal rate of 12.5pc.
"In other countries you have specially tailored tax regimes for individual
projects. So the effective rate is dramatically lower than the nominal rate."
The Irish Independent also reports that Enterprise
Minister Richard Bruton has suggested that increasing taxes on high earners
could have a negative impact on investment.
He warned that Ireland must be conscious of the issue as the IDA
announced 6,570 jobs were created by foreign multinationals here last year.
Fine Gael and Labour have been exchanging statements over a minister's claim
that there will be no more income tax rises during the lifetime of the
The spat follows Fine Gael's rejection of Labour's proposal in the Budget to
increase the Universal Social Charge for those on more than €100,000.
At the announcement of the IDA 2012 results, Mr Bruton would not be drawn
specifically on how targeting the well-off with higher taxes would affect job
creation, saying he did not want to talk about budgetary strategy.
But he added: "I'm saying that (concerning) our impact on international
competitiveness and our ability to attract investment, we have to be conscious
of this issue. I'm not trying to make a pronouncement about budgetary strategy
in the years ahead."
Finance Minister Michael Noonan revealed after the Budget last month that Labour
plans for a 3pc increase in the Universal Social Charge for those earning more
than €100,000 were scrapped amid approaches from the multinational sector.
Labour backed down after Fine Gael countered with a proposal to slash welfare
Mr Bruton's comments came as the IDA revealed that 12,722 jobs in the
multinational sector were created last year, though 6,152 were lost, leaving the
net jobs figure at 6,570. Total employment in the sector last year was 152,785,
up from 146,215 in 2011.
The minister also offered a robust defence of Ireland's 12.5pc corporation tax
rate, insisting the country had always been transparent regarding the tax rate
imposed on corporate profits.
The Irish Times reports that
the cost of legal fees for witnesses to the Mahon and Moriarty tribunals is
likely to leave the taxpayer with an overall bill of up to €400 million for both
inquiries, according to internal Government records.
While both tribunals have completed their final
reports, the State has yet to pay the bulk of the legal costs of individuals or
corporations who were involved in the tribunals over a 15-year period.
Government documents show that original estimates
compiled by the Comptroller and Auditor General several years ago may be
A Supreme Court ruling in 2010 – which held that
the Mahon tribunal may not be able to refuse costs to witnesses who obstructed
its work – has contributed to upward pressure on legal costs.
Briefing material shows that the Mahon tribunal
into planning irregularities has cost about €110 million in legal and
administrative costs to date.
The tribunal has told the Government that
third-party costs for more than 400 witnesses and 9,000 discovery orders could
add a further €147 million to the bill.
This would bring the overall total for the Mahon
tribunal alone to almost €260 million. Government officials note, however, that
the total cost of third-party costs cannot be reliably projected at this point.
The biggest settlements for third-party costs
relating to the Mahon Tribunal so far have been made to the legal team
representing whistleblower James Gogarty (€3.5 million), who first revealed
details of corrupt payments to former minister Ray Burke.
RTÉ settled the largest corporate claim, at just
more than €1 million. The broadcaster gave evidence surrounding the tribunal’s
investigation into a contribution made by Century Radio’s Oliver Barry to former
Fianna Fáil minister Ray Burke. A total of €10 million has been paid in third
party legal fees to date.
However, legal costs for the later stages of the
tribunal dealing with the allegations of developer Tom Gilmartin and lobbyist
Frank Dunlop have yet to be dealt with. These modules alone are expected to run
into tens of millions of euro.
Government records show that while legal costs
are mounting, the final bills have been significantly cut in many cases after
being sent for independent review.
For example, Donnelly Neary and Donnelly – the
Newry-based solicitors who represented two lawyers who put up the £10,000 reward
for information on planning corruption which helped bring about the tribunal –
had its fees cut by 58 per cent.
Anglo Irish Bank – which sought €143,000 for
legal costs – had its bill cut to €85,000, a 40 per cent reduction.
Separately, the Moriarty tribunal into the
awarding of the State’s second mobile phone licence has accumulated costs of at
least €35 million to date. Its total bill is likely to be well in excess of €100
million once it has settled third-party legal costs.
The Irish Times also reports
that Ireland may bring its first syndicated sovereign deal since 2010 to the
markets as early as today, as the National Treasury Asset Management Agency
(NTMA) looks to take advantage of positive investor sentiment to raise an
expected €2 billion.
The last time Ireland raised funds through a
syndicated deal – which differs from an auction in that the price is pre-agreed
– was before the EU-IMF bailout programme of December 2010.
Yesterday the NTMA announced that it would seek
to raise new money in the “near future”, but it is understood that the deal,
which is a syndicated tap of its 2017 Treasury Bond, could get away as early as
The deal will open up the 2017 bond to
institutional investors at a pre-determined price and a five-year term through
mandated joint lead managers, Barclays, Danske, Davy, RBS and Société Générale.
It is expected the deal will be priced in or
about the 3.25 per cent range.
“The 2017 bond has been very tight in the repo
market for the last few months and this should help increase liquidity in the
issue. The current issue size is € 3.89 billion and the issue last traded at
circa 3.25 per cent in yield terms (having traded at 3.15 per cent just prior to
the announcement),” said Jim Ryan, a of Glas Securities.
Given that Ireland’s average cost of bond funding
was circa 4.7 per cent prior to entering the bailout, to fund at such a level is
a remarkable turnaround. It also represents a level lower than that which
Ireland is borrowing from the Troika, about 3.5 per cent.
“This is a very pleasing outcome for the NTMA and
the Irish authorities,” added Mr Ryan.
The deal also edges Ireland closer to fiscal
“I think it’s more likely than not now,” said Mr
Ryan of Ireland’s chances of exiting the bailout later this year, although he
added there were “still a few hurdles to cross”.
Owen Callan, senior fixed income strategist at
Danske Bank Markets, said the deal “marks a massive step in Ireland’s long
process of fully regaining long term bond market access and fully normalising
its primary market issuance, in 2013”.
Once the deal gets away successfully, analysts
expect there will be one or two more syndicated bond issuances during the course
of the year.
Ireland has a funding requirement of about €10.5
billion in 2013.
The Irish Examiner
reports that the volume of retail sales, which does not measure changes in price
levels, fell by 1.1% compared with October and by 0.5% compared with Nov 2011.
Excluding car sales, the volume of retail sales decreased by 1% compared with
the previous month and 0.3% on the year.
Retail sales measured by prices decreased by 1.2% in November compared with
October and were down by 0.2% compared with year-earlier levels.
Anecdotal evidence suggests there was a significant increase in the retail trade
NCB economist Philip O’Sullivan said that delving into the detail we see that
the impact of the switch-off of analogue terrestrial television on Oct 24 has
distorted the headline numbers for a second successive month.
“October’s reading was +1.7% month on month (a 10-month high), buoyed by a 24%
month-by-month jump in sales of ‘Electrical Goods’ as households prepared for
the digital switchover. In November, sales in that segment declined by 18% in
volume terms as this effect unwound,” he said .
The Vat collected in December’s sales will show up in the January/February
exchequer figures. Last week, the Minister for Finance Michael Noonan said he
expected strong figures in December to boost the national coffers in the first
quarter of this year.
The largest increases in November were in the pub trade, which saw a 3.2% rise
in the month. Furniture and lighting products were up 2.7% in November and
department stores experienced a 2.4% increase. Apart from electrical goods,
which experienced a 17.8% drop in November, fuel sales were down 3.2% in the
“In all, core retail sales — which exclude the volatile motor trade, but
includes the electrical goods segment — remain in positive territory on an
annual basis in both value (+0.6% year by year jump) and volume (+0.3% year by
year) terms for a fourth successive month. This reflects a stabilisation in
domestic economic indicators during the second half of 2012. We expect to see a
stronger retail sales performance in December, helped by favourable base effects
(ie the electrical goods effect) and encouraging comments from retailers about
the key Christmas sales period,” added Mr O’Sullivan.
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