I congratulate Deputy Calleary on his recent appointment as a Minister of State and wish him well in his new role. I thank the Ceann Comhairle for facilitating this matter on the Adjournment.
Exchequer returns for the first four months of 2009 were published yesterday afternoon and do not make for pretty reading. The deficit for the four months of this year is €7.3 billion. Taxes are down 24% with a 6% fall in income tax receipts and VAT receipts down more than €1 billion. Up to 384,448 people are registered unemployed, making an average of 5,800 people joining the dole queues every week. If unemployment continues to grow at this rate, up to 570,000 people could be without a job by the end of the year.
The plans of US President, Mr. Barack Obama, to overhaul the US tax code has sent ashiver up the spine of many US companies based in Ireland and has put many economic commentators on red alert. More than 570 US firms are based in Ireland, accounting for 70% of all IDA Ireland supported companies. More than 65 US firms are located in the mid-west region which has had some devastating job losses recently such as Dell in which 1,700 people lost their jobs. Almost two out of every three foreign direct investment projects which came to Ireland in 2008 originated in the US. In the same year, US firms paid €2.5 billion in corporation tax into the Exchequer, approximately 40% of the total corporation tax take for 2008. They contributed a further €13 billion in expenditure to the economy in terms of payroll, goods and services, etc.
Ireland's rate of corporation tax, 12.5%, was introduced by the rainbow coalition Government and has contributed enormously in terms of promoting the country as a location for foreign direct investment. While US firms contribute significant tax receipts, the lower tax rate actually makes those US companies more competitive, a point which the US Administration should bear in mind.
Some commentators in the US claim the US President's measures will target offshore tax havens rather than countries like ours which have low corporation tax rates. Ireland has also signed up to many tax treaties with the US. However, while Mr. Obama's recent speech on the US tax regime did not outline specific details, it is concerning that its accompanying factsheet identified three countries — Ireland, Bermuda and the Netherlands — as tax havens for US multinational companies.
Ireland has a long and proud history of association and friendship with the United States. No other world leader was fortunate to have had the opportunity to meet with the new US President so soon after his inauguration as our Taoiseach had. This is due to the rapport built up between both countries, culminating in the Irish taking over the White House on St. Patrick's Day.
The Shannon and mid-west region values the importance of American industry and tourism to its economy. The co-operation between both our countries will culminate shortly in the opening of full US pre-clearance customs facilities at Shannon Airport which is very welcome. I urge the Minister of State and my constituency colleague, Deputy Killeen, who is also present in the Chamber, to remind the Minister for Transport, Deputy Dempsey, of the urgency to bring the relevant legislation before this House so the facility can be up and running by 1 July as promised.
Many key US Democrats are not lit up with enthusiasm for this plan. Senator Max Baucus, chairman of the US Senate finance committee, reacting to Mr. Obama's proposals said further study is required to assess the impact of the plan on US businesses. There is much to play for and I believe the Irish US lobby is hugely influential. No stone should be left unturned to get the message across to the US that Ireland is not a tax haven. These proposals could have significant implications for the future of US investment in Ireland. Yesterday, the US Chamber of Commerce said they were an unacceptable burden on American firms. We cannot have another Dell scenario and I ask the Minister of State to put a co-ordinated strategy in place to deal with Mr. Obama's proposals.