Speech
Keynote address by Minister Donohoe to Central Bank, ESRI & EIB Webinar Enterprise financing and investment in Ireland - tackling the challenges of COVID-19, digitalisation and climate change
INTRODUCTION
Thank you to Stephen for your introduction, and to the joint hosts of this webinar, the Central Bank, ESRI and EIB.
Thanks to the Kemmy Business School at the University of Limerick for their support of the event.
Today I would like to talk to you about the financing of our domestic enterprises and how this links to the Government’s economic response to the pandemic, plans for the medium term post-pandemic period, and the structural changes our society and economy must make to achieve the necessary climate and digital transitions.
The research also shed light on how effectively SMEs have cut their overheads in the face of a curtailed trading environment, noting that company expenditure fell by 8.5 per cent on average, with 40 per cent of companies cutting their spending.
Over 36 per cent of firms made a loss, while another 30 per cent âbroke evenâ in 2020, it said.
âThese figures suggest that while companies have indeed managed to adjust to the realities of the pandemic, this adjustment for many reasons has not been enough to avoid companies experiencing losses,âMr Makhlouf said.
âPolicymakers have acted to support vulnerable businesses and, thankfully, the pandemic has not yet been characterised by widespread company failures, owing to the unprecedented level of direct fiscal support and creditor forbearance that is in the system,â he said
In a few short months, hopefully, the majority of people in Ireland will be vaccinated. Life will be very different. The economy will also, hopefully, have begun to rise from its fitful slumber.
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When Ireland’s low corporation tax strategy was conceived in the 1950s, it was aimed at stimulating growth at the expense of tax revenue. Today it has, instead, been transformed into a huge source of tax revenue for the government, while it has a relatively minor role in driving employment growth.
Karlin Lillington commented on this changed role in her column last week: there are now many more important reasons why multinationals employ large numbers of people in Ireland than the low corporation tax.
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Thank you for subscribingWe have more newslettersShow meSee ourprivacy notice This week saw the Department of Finance publish its Stability Programme Update (SPU) and Finance Minister Paschal Donohoe said the report does envision a “scarring” of the economy.