Analysis: The Irish Congress of Trade Unions (ICTU) has welcomed the report of the Enterprise Strategy Group (ESG) but differed with it in relation to tax.
Corporation tax should be gradually increased back to an effective rate of 20 per cent, said Mr Paul Sweeney, economic adviser to ICTU. Most tax allowances and tax breaks should be terminated, especially those based on property, he said.
The ESG report called on the government to reiterate its commitment to the current corporation tax rate of 12.5 per cent.
Mr Sweeney said the ESG had done a comprehensive job and had recognised the benefits of social partnership. However, he was critical of the group's view in relation to tax.
"Tax subsidies for investors will no longer work for Ireland. This is a race to the bottom, which Ireland led for some years, but the game is over now." He said the report implicitly recognised this fact when it noted that Ireland's corporation tax rate was being emulated by competitors.
"This of course means that it cannot last... Tax breaks for business are not a sustainable economic policy." Mr Sweeney said the group should have urged the Government to phase out tax subsidies for business.
Ireland's tax regime was not an attractive one for taxpayers, he said. They pay high income and PRSI rates, high spending taxes, and a growing number of stealth taxes, tolls and charges, while many businesses pay little or nothing.
"Ireland has a lot more to offer investors than tax breaks," said Mr Sweeney. The report highlights many of these strengths and ICTU agreed with the recommendations in relation to increased Government spending on training, especially for life- long learning, he said.
It also agreed with the recommendation that there be a greater emphasis on technology, R&D, and sales and marketing, and that Export Ireland be established within Enterprise Ireland.
