The Interview: Feargal O'Rourke, head of PwC tax and legal division
The Irish economy can't begin to recover its international reputation until a new government takes charge, writes Siobhan Creaton
Published 20/01/2011 | 05:00
Feargal O'Rourke can't wait for the general election. The man who heads up PricewaterhouseCoopers' tax and legal division wants a new government installed as soon as possible.
That's not to say he wants to see his mother, former government minister Mary O'Rourke TD, and his cousins, Finance Minister Brian Lenihan and junior minister Conor Lenihan, immediately banished to the opposition benches.
It's just that he believes the Irish economy can't move on and begin to repair its intern-ational reputation until a new administration takes charge.
"There is a need for some sort of catharsis," he says. "I understand electoral politics. The opposition is trying to get into government and is trying to persuade the electorate they are the right choice.
"So it is not possible for the collective political system to put out a positive message about Ireland until the election is over. But the business world and the wider electorate want to be able to close out on what has been happening in the last two or three years."
O'Rourke has worked closely with some of the biggest multinationals who have been major employers in the Irish economy for many years and continues to support agencies like IDA Ireland to attract more of these investments into Ireland.
This job has become harder for everyone, particularly over the last six months, as the country's economic woes made headline news across the globe.
"I was in the States when the IMF/EU deal arose and when you see it on the front page of the 'Wall Street Journal' it is difficult," he says.
Irish executives of international companies like Intel came under pressure to filter what O'Rourke describes as the "noise" the financial turmoil created but have been able to explain that Ireland still works as a good location for their business.
Indeed, the recent announcement of a $500m (€371m) overhaul of its plant at Leixlip over the next two years is proof that the banking crisis and the IMF/EU bailout haven't damaged our long-term prospects, claims to O'Rourke.
Companies that haven't previously invested in Ireland but have been mulling over the prospect have been harder to soothe and some, that could have created much-needed jobs here, have decided to put their money elsewhere.
"It has been soul destroying to see some projects not coming to Ireland while others, that were slated for Ireland have been put in the deep freeze," he says.
"The IDA, the Government and everyone is doing a lot of work to try to convince these people that this is a temporary issue but when you are explaining you are losing."
As a tax expert, this 46-year-old is relieved that Ireland has seen off the pressure to abolish the 12.5pc rate of corporation tax but says we must remain vigilant to other attempts to attack the low tax rate that has proved so successful in creating jobs and fostering enterprise in this economy.
"The actual rate of 12.5pc isn't critical but it is critical that we stand by it come hell or high water because it is part of Ireland Inc's brand," adds O'Rourke.
He says it is all about conveying a sense of stability. This rate of corporate tax should never be increased or decreased, he warns, because then it looks like a moveable feast.
Whoever gets into the next government, O'Rourke has assured his clients that this rate won't change.
"The fact that there was a unanimous vote in the Dail to retain it shows the political spectrum is united on this issue and that counts for a lot," he says and that doesn't always happen in other countries.
There are other worries on the tax front, he warns. Any attempt at European Union level to introduce a consolidated corporate tax base would dip into Ireland's tax revenues and badly affect multinational investment here.
The other danger could come from any radical reform of the US tax system that might wipe out the benefits of investing abroad.
The Government is well aware of his views on taxation issues. Not only does he regularly discuss them with the Finance Minister, but he was a member of the Commission on Taxation that recommended the abolition of stamp duty and the introduction of a property tax a few years ago.
"We are one of the few countries that don't have a property tax," he says, "and the Commission saw its introduction as a means to bring a level of stability to Exchequer revenues.
The politicians were slow to grasp this thorny issue but now that they have accepted a bailout, a new property tax is on the agenda. "It was easy for me to come up with that," he says. "I am not knocking on doors and trying to get elected."
O'Rourke, who was a member of Fianna Fail at university, says he decided early on that he would make a career outside of politics but continues to hold politicians in high regard.
"I have massive regard for anyone who puts themselves up on a ballot paper. I have seen politics from the inside and I understand what it is about. They have to go out to convince people to elect them to make a difference."
He would like to see more business people getting involved in the political scene to offer valuable skills to restore the economy to strong growth.
"There are some super people who would make a fantastic contribution to politics if they were enticed to do so," he says. "This would take a fundamental reform at political level. In an ideal world you would have a cabinet mixed with people who are directly elected plus a list of experts in their field."
There is little to attract these people at the moment. In fact, those that do get involved can end up taking a lot of grief. "I worry sometimes when you see people criticised for earning €5,000 for being on a state board. And while we need to watch every penny, if we seriously want to get the best brains in Ireland to become involved in these companies we should recognise that a lot of these guys are doing it voluntarily. The money means nothing to them."
Overall, O'Rourke is positive about Ireland's future. "We are not going back to the dark old days of the 1980s. We still have a few good cards to play," he insists.
"I hope one of the first things on the new government's agenda will be promoting Ireland as a place that is open for business for inward investment. A new administration will have a new deck to work off and then we can all move forward."