SF policies would kill Celtic Tiger
and JANE SUITER
SINN FEIN'S economic policies would be "suicide" for the Celtic Tiger, halting the housing boom in its tracks and triggering massive job losses, according to the country's leading economists.
The centrepiece of the party's new economic policy is a huge hike in corporation tax from 12 per cent to 17.5 per cent - a plan described this weekend as "suicide" by the chief economist of financial group Friends First.
In a further sign the party has blundered in its attempts to woo business votes and possible coalition partners, its policies have been dismissed as "illiterate" by Justice Minister Michael McDowell.
The party wants to hammer high-earners on ?100,000 or more with a punitive top tax rate of 50 per cent, a move which economists say would trigger labour shortages at a time when the country needs more workers.
The Sunday Independent can reveal that a number of Ireland's top business figures attended a function over the Christmas period to discuss the effects of Sinn Fein in power. The group of senior business figures and economists, including Jim Power of Friends First, heard that US investment could "dry up overnight" with Sinn Fein in government.
Sinn Fein's revamp of its Marxist policies was an attempt, claimed party chairman Mitchell McLaughlin, to address the rapid economic change of recent years and the emergence of "a different world". But many leading business figures and US companies are deeply alarmed by Sinn Fein's bizarre proposal to put increased tax pressure on foreign multinationals.
Multinationals are the biggest provider of jobs in Ireland. Sinn Fein's plan would simply drive these jobs away, leaving thousands unemployed, stalling house prices and plunging the Irish economy into a recession that would reverse the economic gains of recent years, say economists.
Mr Power told the Sunday Independent: "We are increasingly coming under pressure with competitiveness falling and increasing competition from India, the Far East and the new accession states in the EU.
"In that environment, the notion of hiking corporate tax to over 17 per cent would be suicide, low corporate tax is one of the few competitive advantages we have at this stage."
Commenting on Sinn Fein's policies, Justice Minister Michael McDowell said last night: "It confirmed that Sinn Fein is a party which is economically illiterate, with little or no understanding of how modern business operates or indeed the role of the multi-national sector in the Irish economy.
"For a start, Sinn Fein claims that multinationals 'siphon' off ?25bn from the Irish economy, in fact they repatriate approximately ?57bn less the approximate ?33bn which Irish firms take home from their investments abroad," he said.
Dr Dan McLaughlin, chief economist at Bank of Ireland, said: "We are kidding ourselves if we think that a lot of foreign capital is here because we are smart, young and English-speaking. The key is low corporate tax rates which are crucial for a small economy on the edge of Europe."
He was also scathing about Sinn Fein's plan to raise income taxes to 50 per cent for "high-earners". According to Mr McLaughlin, high taxes simply reduce supply.
Jim Power believes multinationals are a vitally important part of the economy. "Is Sinn Fein saying they do not want companies like Google or Intel in Ireland?"
