Siptu calls for shipping sector incentives

Siptu has called on the Government to state its position on recommendations it has received for subsidising the Irish shipping…

Siptu has called on the Government to state its position on recommendations it has received for subsidising the Irish shipping industry.

The union's marine branch organiser Paul Smyth, one of the officials at the centre of the Irish Ferries dispute, said the Government should say why it has not acted on a report by the Irish Maritime Development Office (IMDO) advising a package of tax breaks for the sector.

The IMDO was set up by then marine minister Dr Michael Woods in 2000 as part of Ireland's response to EU plans to arrest the decline of the sector and capture some of the expanding market.

At the time there were warnings of dire consequences for the industry if the Government failed to provide incentives, particularly as other EU states were assisting indigenous shipping firms.

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Last July the IMDO submitted a report on the future of Irish shipping to the Minster of State for the Marine Pat "the Cope" Gallagher. It recommended a range measures including tax breaks for shipping firms and financial assistance towards the cost of training seafarers.

It specifically warned of the dangers posed by companies employing "cheaper seafarers from Eastern Europe while operating on non-European Flagged vessels".

It also proposed a PAYE refund scheme, under which companies could reclaim 40-100 per cent of the income tax paid by Irish-based seafarers. This could remove the impetus for companies to outsource jobs, the report argued.

"At that time the Minister of State for the Marine indicated he was prepared to act to implement such changes, but to date no such action has been forthcoming," Mr Smyth said.

The IMDO report estimated that at least 900 seagoing jobs could be lost over the next three to five years, potentially resulting in a loss of €8m - €12million to the Exchequer. "This does not include the loss of revenue generated by the employment activity or the cost through losses of indirect services provided, which would make the figure far greater," the report said.

It estimated the cost to the Exchequer of a 100 per cent PAYE refund would be €4.1m in the first year. "We believe that the measures would also have a positive net effect on employment in the sector and that the Exchequer receipts would eventually return to a similar level prior to the refund being introduced," the report said.

Mr Smyth said the report showed that cost was not an issue in implementing the recommendations.

"At such a crucial time for the State's shipping sector and with so much money in the Government coffers, it is unthinkable that the proposals on State aid for the maritime industry could be rejected," he said.