Companies Amendment Bill 2012
Our economy is one of the most open in the world, a fact that has both negative and positive aspects. An open economy is more vulnerable to international economic events and shocks which leave indigenous companies and businesses more exposed and thus constrain the intended effects of economic decisions taken by the State. However, the positive effects of an open economy where innovation, enterprise and investment are encouraged far outweigh the negatives.
A recent National Irish Bank-Financial Times foreign direct investment monitor ranked Ireland as the second most attractive country globally for foreign direct investment. It is worth noting that over 1,000 overseas companies support 146,000 jobs, generating €110 billion in exports, which directly benefits the Exchequer. The figures clearly demonstrate that foreign direct investment plays a crucial role in stimulating economic development here and, along with the clustering effect, promotes innovation and entrepreneurship among indigenous companies. It is some achievement for a country of our size to note that eight of the world’s top ten ICT companies are here along with nine of the top ten pharmaceutical companies and 17 of the top 25 medical device companies.
Overseas companies play a very significant role in my constituency of Galway West. The Government, working with the IDA and the chamber of commerce in Galway, among others, has so far this year helped to attract 750 new multinational sector jobs, with hundreds more indigenously created jobs and spin-off jobs. I spoke recently with the senior manager of a multinational company in Galway, an Irishman who, like so many thousands of others, has benefited from the sector’s progress and development in the West. It was his contention that, in the event of a conflict between Irish law and business practices or the wishes of a multinational company, it is Irish law that should be changed. As I believe in the legislative functions of the Oireachtas on behalf of the Irish people, I disagreed respectfully, but it does raise an important concept. The ability to make law must always rest with representatives of the people acting for the good of all citizens and the nation. However, that must not preclude us from having a common sense approach in creating a business-friendly environment which is conducive to job retention and creation.
On top of the commitments to aid economic recovery and employment creation contained in the programme for Government, the Taoiseach has set this country an ambitious target to make Ireland the best small country in the world in which to do business by 2016. Given the impact of foreign direct investment on our economy, implementing measures to make it easier to invest, conduct business and create jobs is central to achieving the target. The 2012 jobs action plan is one such measure. This document is a culmination of a new approach in delivering success by identifying not just the desired goals for job creation but also those groups, Departments or organisations responsible for achieving these goals. It also identifies a plan of action for further building on the success of the multinational sector. Multinationals invest in Ireland for many reasons, including our talented workforce, geographical position, competitive corporation tax rate and uncomplicated, straightforward business regulatory system. Revenue is one organisation which has gone to great lengths with online and IT support systems to make it easier for businesses to pay taxes and charges such as VAT and so forth.
This legislation forms part of this uncomplicated pro-investment and pro-jobs approach. By extending acceptance of international accounting principles we are simplifying regulations but not diminishing the strength and spirit of the underlying provisions of the various Companies Acts. Furthermore, the specific extension of the acceptance of US-GAAP, or generally accepted accounting principles, will benefit the some 550 US companies with operations across our country. The Bill will also benefit companies whose securities are registered with, or which report to, the US Securities and Exchange Commission.
With this legislation, the Government is ensuring red tape and bureaucracy is kept to a minimum. Accepting the international accountancy practices will further entice and attract multinationals from across the world to Ireland, including to Galway West. This in turn promotes investment and innovation and brings the benefits of employment to both citizens and the State. Indigenous companies also benefit from new contracts and networks, which can lead to new business. The clustering effect which multinationals bring greatly assists in the establishment of indigenous start-ups which spot opportunities either to complement or compete with the newly attracted companies. Ultimately, there is no single cure for our unemployment problem. We need a series of measures, this legislation included, which are well thought out and carefully constructed and complemented by clear points of responsibility which will get our people back to work.