asked the Minister for Industry and Commerce whether he has assessed the impact of job creation that would be likely to result from measures (i) to eliminate accelerated depreciation allowances from the tax code and (ii) to link all grant payments to realise job creation; and if he will make a statement on the matter.
Written Answers. - Job Creation.
32.
It is difficult to assess with any degree of accuracy the impact on job creation of changes in the tax code in relation to accelerated depreciation allowances. The changes introduced in the Finance Act, 1988, are, I believe, useful in accelerating the shift in incentives from support for fixed assets towards other areas of perceived weaknesses in industry such as marketing, product and management development. I would not favour, at this stage, the total elimination of accelerated depreciation as it would probably slow down the rate of industrial investment and reduce the attractiveness of our overseas incentives package.
As part of the reorientation of industrial policy announced in the Programme for National Recovery, there is now a wider use of employment grants and it is now standard practice to incorporate in grant agreements performance clauses which trigger grant payments and/or clawback clauses which safeguard the State's investment in the event of performance not being as promised. This means that companies are aware from the outset of the employment targets that must be met if they are to receive full State support. This will ensure a higher conversion rate of jobs promised to jobs created.