DIETER LOSLEBEN,
Sir, - I refer to the Tánaiste's address to the Institute of Taxation annual dinner as reported in your edition of February 23rd.
Ms Harney is reported as claiming that "low taxes are the central reason for Ireland's economic success", while criticising France, Italy, Germany, Belgium, Spain and other EU partners for not "achieving their full potential" because of "over-taxation and over-regulation" in their economies.
I would remind Ms Harney that Irish manufacturing industry enjoyed a 10 per cent corporate tax rate for many decades with only modest success in the area of job creation.
Furthermore, the Tánaiste omitted to quantify the contribution to Ireland's recent economic success accruing from tens of billions of euro pumped into the Irish economy by EU taxpayers through an apparently endless variety of grants, subsidies, structural funds, cohesion funds, etc. Is it not ironic that these funds were provided by the very Europeans Ms Harney now claims are overtaxed?
The Tánaiste again repeated her outright opposition to EU tax harmonisation, saying that the 12.5 per cent rate of corporation tax is a permanent feature of Irish tax policy. Without EU tax harmonisation, joining economies from eastern Europe will be free to set their own corporation tax rates, perhaps much lower than Ireland's 12.5 per cent. What implications would that have for employment in Ireland? Indeed, how many Irish manufacturing jobs have already been lost to low-wage economies such as Poland, the Czech Republic, and other eastern European countries?
Ms Harney also attributes a 4 per cent unemployment rate in Ireland, together with the "effective elimination of long-term unemployment" to a low-tax policy while again criticising our EU partners for their alleged high unemployment rates. Unlike other EU countries, the official "unemployment" statistics in Ireland exclude part-time workers, seasonal and casual.
Based on the more realistic "Live Register", Irish unemployment currently stands at some 7.5 per cent and rising. Furthermore, I think very many long-term unemployed would take issue with her assertion that long-term unemployment in Ireland is "effectively eliminated".
Apparently, the Tánaiste believes our recent economic success is due solely to our taxation policy and she feels free to criticise our EU partners for their alleged lack of vision in this area, without any reference to the billions of Euro they throw into the Irish economy.
Perhaps she would be more gainfully employed were she to direct her attention to the crippling domestic inflation that is currently eroding Ireland's competitive position and which, together with the extraordinary high cost of insurance, legal and service costs, is rendering this economy far too expensive as a manufacturing base, and costing us jobs. These are the real issues currently affecting the Irish economy, not taxation.
No longer can we offset domestic inflation by devaluing our currency. The hard economic reality is that Ireland must now compete in the global market as an equal partner and we will continue to loose existing and potential jobs until such time as the Government faces its responsibilities by tackling domestic inflation and other current issues. - Yours, etc., DIETER LOSLEBEN, Strandhill Road, Sligo.