MOU signed between Mercyhurst and Council
The prospect of an American college creating a campus in Dungarvan has taken a major step forward.
A press conference was held at Mercyhurst College in Erie, Pennsylvania on Monday, November 14, to announce the signing of an Memorandum of Understanding with Waterford Council officials.
The MOU authorises a shared feasibility study of a Mercyhurst campus in Dungarvan. A 12-month timeframe has been allocated for this process.
Waterford Council CEO Michael Walsh joined the simultaneous signing through electronic conferencing.
“This is the first step towards what will hopefully be the construction of a dedicated campus in Dungarvan,” says Waterford TD John Deasy, a graduate of Mercyhurst, who travelled to Erie earlier this year to meet the university’s new president, Michael Victor.
“The aspiration has always been to make Dungarvan a university town. It’s taken eight years to get to this point and its fantastic to see the initial groundwork has been completed.
“When I went to Erie last March I could sense a new impetus had emerged within Mercyhurst and now we are beginning to see the manifestation of that, which I hope will change the face of the town of Dungarvan for the next 10 years,” he added.
Since that visit to the States, Mr Victor and the university’s provost, David Dausey, have been to Dungarvan to meet Deputy Deasy, Waterford Council officials, and Mercyhurst’s Irish board.
The relationship between Dungarvan and Mercyhurst dates back more than three decades, with educational links to St Augustine’s College, Abbeyside starting in the mid-eighties.
Many students from the Friary and other schools in West Waterford have attended third-level there since and Dungarvan and Erie were formally twinned in 2007. For the past six years students from Erie have come to Dungarvan to study and use it as a base to explore the rest of Ireland and Europe.
Dungarvan has also hosted Mercyhurst’s Global Intelligence Forum a number of times, most recently in July 2015.
Mr Deasy and his former St Augustine’s schoolmate John Melody, now a successful businessman in Erie, went there on scholarships in 1986 and have kept in close contact since.
They and others have spent the past number of years working with Mercyhurst to deliver a European headquarters in Dungarvan, catering for up to 350 students each year.
“We are potentially about to enter a war with the UK on the basis of competitiveness and attracting inward investment and we are the minnow.”
Finance Bill 2016
Dáil Debate | 27 Oct 2016
I want to discuss the Finance Bill provisions to deal with corporation tax and multinationals, and how we deal with these issues as the implications of Brexit manifest themselves.
The question for me is what affirmative steps we can take now when it comes to our tax code that would insulate Ireland from the negative effects of Brexit. I believe there is some confusion as to what direction to take, understandably, because of the enormous number of unknowns that exist, particularly as it applies to the UK.
For example, yesterday it became clear that we are in the dark regarding the UK's intentions on immigration controls and that is not the only area. We are in a similar situation when it comes to corporation tax and how it will structure its tax regime to remain competitive outside the EU. If, for example the UK leaves the Single Market and reduces its corporation to 10%, as has been mooted, how do we deal with that when it comes to our competitiveness?
In the meantime, how do we deal with the uncertainty that could be just as damaging? I believe there is one immediate step that has not been taken and needs to happen now. The UK has had and has our tax regime in its sights and is trying to figure out how to eat into a share of foreign direct investment coming to Ireland, as it has been for some time.
That began in earnest about six or seven years ago. It picked up pace when George Osborne MP, the former Chancellor of the Exchequer, announced that there would be an incremental lowering of the corporate tax rate in the UK to 15% or so. That was before Brexit.
While all of this has been going on, our corporate tax regime has come under a continual and sustained attack from the European Commission. It started a couple of years ago with the closure of the double Irish. That involved the OECD as well. It allowed companies to shift profits, transfer pricing, etc., as well all know.
That corporate taxation facility, which did make Ireland attractive to multi-nationals, was wound up for new entrants from the start of 2015 and will disappear altogether at the end of 2020 for multi-nationals with schemes existing before January 2020. I was probably one of the only Members in this House who cautioned against ending the double Irish.
Would the same decision be made today in light of Brexit and the increased threat to our competitiveness? I do not know, but I do not think we would be as quick to dispense with the double Irish facility if we had that choice presented to us again. Should we reconsider the phasing out of the double Irish in 2020 for those pre-existing entrants in the scheme? In view of Brexit I believe everything is on the table.
Since then, we have received the European Commission's decision concerning Apple. Commissioner Vestager found that Apple received billions of euro in illegal state aid, according to her, and ordered the corporation to repay €13 billion in back taxes to the Irish Exchequer. To put it simply, it amounted to an attack on our corporate tax regime and a threat to Irish sovereignty.
As we know now, it has not stopped there. Commissioner Vestager has turned her attention to every other multi-national here to see whether or not they similarly received illegal state aid. We are appealing the decision because we are aware of how much damage this could potentially do to our competitiveness and our ability to attract foreign direct investment. The expectation is that Ireland will lose the appeal.
Two days ago, the Commissioner for economics, Mr. Pierre Moscovici, relaunched to common consolidated corporate tax base, CCCTB. In a nutshell, it would create a common tax base for corporations around Europe and would mandate that taxes are paid in the locations in which goods and services are sold, which is most likely in the larger EU markets.
If implemented, the reality is that it would eat into our corporate tax revenues. It amounts to another attack on our sovereignty. The EU Commission and Commissioners Vestager and Moscovici are operating as if our largest trading partner, Britain, voted to remain in the EU.
They are proceeding with grand tax policy initiatives that take absolutely no account of what we may be facing in three of four years' time when it comes to the UK's tax regime and how it positions itself to attract a larger percentage of foreign direct investment to this country's potential detriment.
What are we looking at when it comes to the UK's corporate tax regime? We do not know, but various scenarios have been drawn up. We could see a complete unilateral break if the UK loses its EU passport rights, for example, in which case it will have to improve its tax offering access across the board. What does that mean? It potentially means a lower rate of corporate tax, VAT recovery for financial institutions, exemptions for financial service businesses and tax incentives that are presently contrary to EU state aid rules.
If that happens, what do we do? There may not be a great deal we can do because of the EU constraints when it comes to corporate tax and VAT. We may be confined to making improvements to our personal tax regime. What is happening in Government now? Understandably, we are considering our position based on every potential eventuality. We are dealing with issues such as the knowledge box and introducing incentives for CEOs and business people who are potentially coming to locate in Ireland.
When it comes to Ireland, the European Commission is operating as if Brexit did not happen. Two commissioners in particular are chipping away at our competitiveness and our tax sovereignty as if nothing has changed. This is my point: we cannot afford to fight a war on two fronts. As I said earlier, the British have had our corporate tax rate in their sights for years.
We are potentially about to enter a war with the UK on the basis of competitiveness and attracting inward investment and we are the minnow. I was struck by the comments of the Minister, Deputy Noonan, around the time of the Apple case when he said that there was a declaration of war on our sovereignty and our corporate tax rate. We are looking at that happening on two fronts if somebody does not impress upon the European Commission the implications for Ireland as a result of Brexit.
At the same time, the EU seems intent on changing those corporate tax structures, even if that means diminishing our attractiveness to multi-nationals. What do we need to do? We need to immediately make terms with the European Commission until we know whether or not the UK retains access to the Single Market and how it plans to construct its tax code. I am obviously directing my comments to the Minister for Finance, Deputy Noonan.
I am also directing my comments to whom I believe is the important person in this case, and that is the President of the European Commission, Mr. Jean-Claude Juncker. He is the only senior person when it comes to those two Commissioners that I have mentioned. It needs to be impressed upon him immediately that his Commissioners need to deal with the bigger picture and desist from making any further attacks on our competitiveness until we understand how the UK intends to proceed post-Brexit.
We are scrambling to find direction when it comes to Brexit. I believe that is where we need to start. Understandably, perhaps, we are struggling to find direction when it comes to dealing with Brexit. Unfortunately, I also think there is an attitude that there is very little we can do until we know what the British want and how they intend to proceed.
I disagree with that sentiment and I believe that our first and immediate port of call needs to be to Mr. Juncker to express the case I have just made. I do not believe that there is a leader in the EU who would not grasp the political and economic realities of the argument I have just made. I do not believe there is one. They understand that this entire process is a crapshoot. Nobody knows what is going to happen.
The answer may comes back that the EU cannot stop the European project in its tracks and that it cannot put on hold reasonable and good EU policy measures because of Brexit, but we cannot give the British a chit or the opportunity to bargain before we start negotiating with them.
I am afraid there needs to be balance here and that needs to be impressed upon EU leaders. If, on one hand, our corporate tax base continues to be undermined by the European Commission and, on the other hand, we find ourselves competing with a highly-attractive UK tax code framed to attract inward investment at all costs, our economy will be set back again very badly.
If those two dynamics are not in some way addressed and one of them halted, this economy could be looking at a potentially perfect storm when it comes tax, inward investment and our competitiveness.