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Sunday, June 14, 2009

Developing Irish Export markets; Easier said than done

Ireland has no future in low-cost manufacturing and cash-strapped companies should focus their business efforts on exports and trade with new world economies, the head of Enterprise Ireland said this week.

A new generation of Irish companies with international links involved in the smart economy were making healthy profits, Enterprise Ireland chief executive Frank Ryan said.

Ryan told the Public Accounts Committee (PAC) of the Dáil that the way forward for businesses was through the smart economy, leaving behind an old industrial era.

"There’s no future in low-cost manufacturing," he added.

There were small companies with links to technology and computing making turnovers of over €50 million, he said.

Ryan added that businesses needed to target new economies like Brazil, India, China and Russia among countries. It's all easier said than done.

Irish SMEs haven't had a tradition of exporting and while 55% of total exports from Ireland in 1973, the year of entry to the European Economic Community, went to the UK, more than 50% of exports from Irish-owned firms still go to the UK.

Irish Economy: Home Truths on Irish Exports as Ireland faces a changed global economy in the decade ahead

Waterford Glass

When Tony O'Reilly headed Heinz, he often spoke about the importance of creating world recognised Irish brands and then put a lot of money into Waterford, which had more than 3,000 employed in the 1970's.

A combination of poor management; changing consumer tastes and cost structure, doomed the enterprise.

John Foley, chief of the Waterford Crystal unit, said in 2007 that the group employed 1,300 staff in Indonesia for the same wage costs as 90 staff in Britain, itself a cheaper labour market than Ireland.

Even after the industry had died in the 1850's, the craftmanship of the renowned glassmakers of Bohemia, was brought to Waterford in 1947 by Charles Bacik, grandfather of Senator Ivana Bacik, and the old brand was revived.

It is not easy to create a significant brand in a market such as the US and it would be foolish for Ireland to leave the Waterford brand die.

Louis Vuitton bags may be made in China or all but the design of the iPod is Asian, but consumers view them as French and American products.

Receiver appointed to Irish operations of Waterford Wedgwood; Glass making in Waterford dates from 1783; Czech immigrant Charles Bacik revived industry in 1947

The Irish Economy Blog featured a story on the US PBS Wide Angle film on the demise of Waterford Glass:

Sunday, June 07, 2009

McCreevy's Property Tax Incentives: Haughey's Artists' Tax Exemption for Artists and "Artists"

Charlie McCreevy speaking as EU Internal Markets Commissioner

Charlie McCreevy, the Finance Minister for the good times, gave out a lot of goodies to various sports.

It's easy to be generous with other people's money

McCreevy gave £20m of government money to the GAA, for the redevelopment of Croke Park. The horsey folk in his Kildare constituency, including Puncestown Racecourse, did well during his tenure and for sports folk such as Padraig Harrington and Brian O'Driscoll, double the pension reliefs available to the great unwashed.

The Sunday Independent today reports the right for high sports earners to claim back 40 per cent of their earnings in tax relief over a period of 10 years once they retire, could be abolished next year.

The Commission on Taxation will recommend that Finance Minister Brian Lenihan pulls the plug on various tax reliefs when it publishes its report in July.

The reliefs under threat also include the artists' tax exemption (which allows artists to earn up to €250,000 tax-free every year) and patent tax relief, according to a source close to the commission.

McCreevy's former boss Bertie Ahern, may well be puzzled as to why people are blaming him for the economic crash when everything was so hunky-dory during his lovefest with property developers.

At least, he gets some benefit-in-kind from doling out more State funds, without having to pay tax on it himself.

The former taoiseach is to get seats worth around €192,000 at the new Lansdowne Road stadium.

The FAI has given Ahern two seats in the Presidential Box at the new Aviva Stadium, which is due to open its gates next year.

However, in theory the seats have no monetary value so Ahern will not be subjected to Gift Tax.
Business Editor Senator Shane Ross makes a reference in today's Sunday Independent to "my imminent book on Ireland's bankers."

Ross would likely cover the additional property tax incentives, which McCreevy recklessly introduced at a time when the property boom was begining to accelerate.

An interesting question is will Ross claim a Haughey era tax incentive for indigent artists if the exemption remains?

Bizarrely, Revenue tax inspectors decide on the "artistic merit" of a book and RTÉ presenter Gerry Ryan who earns as much as a significant newsroom for reading from newspapers and doing interviews, was granted tax-free status under the artists’ exemption scheme by the Revenue Commissioners for earnings from his biography, which was generally regarded as self-indulgent pap.

The tax-free perk had already been granted to John Hearne for his work in editing on the tome Would the Real Gerry Ryan Please Stand Up, which was published last year.

In 2008, RTE's then chief reporter Charlie Bird and rugby writer and NewsTalk 106 presenter George Hook, were among the individuals whose memoirs were deemed to be art.

It way well seem as much of a joke as McCreevy's property incentives and have as much merit.