Luring more investment to Ireland will require better personal tax breaks, more housing for foreign workers and some green and tech subsidies, the new chief of IDA Ireland believes.
ichael Lohan, who took over the top job at the State’s main agency for foreign direct investment, said investors are not turned off coming to Ireland but they are “aware” of the shortage of housing here.
“People are aware, and it is raised in conversation, but nobody has said to me, ‘We are not coming to Ireland because of your housing crisis.’”
He said it was up to the Government to decide how to use an expected €10bn surplus this year, but it was “clear where the carrying capacity constraints are in Ireland”.
Solving the housing crisis has to go beyond subsidising developers of cost-rental housing, Mr Lohan said, referring to an idea the Government is mulling, according to a report in Thursday’s Irish Independent.
“It has to be multi-faceted. The response isn’t simply one element. If we want to attract talent into Ireland, which we have to do, and people into Ireland, we have to be able to provide them with homes in which they can live, raise their families in, and indeed develop their careers here. So we need to have it across the spectrum of housing.”
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A Leitrim native, Mr Lohan is an engineer by training and was the IDA’s global head of life sciences and talent transformation and innovation before taking up the CEO role this week.
He spoke to the Irish Independent on the fringes of the Bloomberg New Economy Gateway event in Wicklow on Thursday, where he had back-to-back meetings with Irish and foreign delegates.
Ireland needs to compete with other countries on personal tax breaks and subsidies, he said.
“I think we need to make sure we’re competitive in every aspect of our offering for innovative companies,” he said.
“We need those decision makers here. We need to look at having a progressive system that rewards high innovation, high-net-worth individuals as well.
“I think at the moment our system is just too narrow, and we need to broaden that, and it’s not about a fundamental reset of it. I think it’s just about an adjustment to it in order to make it attractive.
“It’s not all driven by personal tax, but it does have a factor to play as well in individuals’ decisions.”
The Government has a partial tax exemption in place for foreign workers posted to Ireland called The Special Assignee Relief Programme but it was used by just 1,500 people in 2018.
While he agreed with the Taoiseach’s plan to invest some of its windfall corporation tax receipts into an “anti-austerity fund”, he said some money should also go to luring investors in renewables and digital infrastructure.
“We need to be prudent about this. We need to decide what we need to keep for the future. And then we need to say, OK, what elements of that can we utilise today.
“The twin transition of digital and green: we really need to look at how we can incentivise that and ensure we propel ourselves forward.”
