Promoting investment and jobs in Ireland is a key part of the Government’s overall strategy. As the Deputy will be aware, the economic policy unit in the Department of An Taoiseach supports the Government, in delivering sustainable and balanced economic growth and advancing the Government’s economic priorities. The unit assists the delivery of the Government’s economic commitments as outlined in the programme for Government, and provides advice on a broad range of economic policy areas and issues. It also assists the work of the Cabinet committee on the economy and investment, which is chaired by the Tánaiste, and several related senior official groups.
This Government has adopted a medium-term budgetary strategy based on keeping public expenditure growth in line with the trend growth rate of the economy. This ensures counter-cyclical fiscal policy, which provides a stimulus in a downturn, while acting to dampen the economic cycle in a boom; ultimately ensuring fiscal stability. Keeping core spending growth in line with trend growth will help ensure that expenditure policy is de-coupled from windfall tax revenue, in particular, ‘windfall’ corporation tax receipts.
The Government’s White Paper on Enterprise, published late last year, sets out Ireland’s enterprise policy for the next decade reaffirming our commitment to FDI as a core pillar of our enterprise policy with an emphasis on digital and green, with sustainability, innovation and productivity at its heart. The implementation of the White Paper will build on the strong foundations already in place and ensure businesses in Ireland are well positioned to seize opportunities to grow and succeed.
In terms of supporting small business, their vital importance to our economy is reflected in our Programme for Government commitments. In relation to tax measures, my Department has been proactive in supporting small business by introducing and expanding a number of taxation measures which help small businesses access investment, scale-up and expand. Measures include the section 486C relief for certain start-up companies; the Employment Investment Incentive (EII); the Key Employee Engagement Programme (KEEP); the Start-Up Relief for Entrepreneurs (SURE); and the Start-Up Capital Investment (SCI).
These measures seek to encourage start-up companies in Ireland, provide a platform for investment, and facilitate engagement and retention of key staff, thereby creating additional employment and economic activity in the State. These tax incentives are actively monitored and have undergone significant change in recent years following feedback from stakeholders in particular the SME community.
Notwithstanding the number of tax incentives and supports available to small business, I am committed to continuing to keep the current suite of enterprise tax measures under review to ensure that they are working properly, and fulfilling their potential for our economy.
The Government takes action against inequality through the broader tax and welfare system. In fact, Ireland has one of the most progressive systems of taxes and social transfers of any EU or OECD country, which contributes to the redistribution of income and to the reduction of income inequality.
My Department monitors income inequality, particularly in the context of the distributional impact of tax and social welfare measures introduced as part of the annual Budget.
Finally, the broad economic and fiscal parameters for the Budget in the autumn will be presented in the Summer Economic Statement. It is within this context and the overall macro-fiscal position that budgetary options, including those relating to tax, will be considered. Government will set out its strategy for Budget 2024 in this Statement, which will be published over the coming period.
