Jobs figures reflect fancy arithmetic but should bewelcomed
ON the face of it, the figures released yesterday by IDA Ireland concerning job creation in the foreign multi-national sector should be applauded.
The total number of people employed in the sector now stands at 152,785 – a figure last recorded before the global financial crisis kicked off in 2008.
Some 6,570 new net jobs were created last year as a result of foreign direct investment, with the IT-technology sector accounting for the vast bulk.
But God is in the detail.
Unfortunately, the IDA is unable to provide a breakdown of how the remainder was divided up, other than to say that international financial services, the pharmaceutical sector and medical devices were the big winners.
Instead, we have to rely on the breakdown for 2011 to see where the jobs are being created, with a more detailed picture of last year's results not being released until the IDA annual report is published in the summer.
Nobody likes a party pooper when the news (for a change) is positive on the jobs front, but some points raised at yesterday's press briefing should be clarified.
First, the jobs figure is not necessarily reflective of what is happening on the ground.
For example, the IDA counts PayPal's announcement of 1,000 new jobs for Dundalk over the next four years as 1,000 new jobs created.
In fact, about 60 staff had been recruited by mid-summer and the figure today remains below the 1,000 mark. More than 200 had been hired at the Dundalk plant by Christmas.
PayPal's global operations vice-president Louise Phelan had warned that Ireland needed to focus on developing language skills as it emerged that the company would seek to 'import' about 500 jobs from abroad.
It is the case that jobs created do not necessarily mean that positions have been filled.
An IDA spokesman said the figures were "locked in" and it was very unlikely that they would fall or that the jobs would not materialise. That is fair enough, but it is a long way from conventional accounting procedures.
And then there is the controversial issue of Ireland's 12.5pc corporation tax rate, and the claim by Jobs Minister Richard Bruton that the country has a clear and transparent tax strategy.
He argued that there was very little difference between Ireland's nominal rate of 12.5pc and its effective rate of 11.9pc.
But despite the minister's protestations, the manner in which companies are able to legally twist the system to avail of tax avoidance arrangements including transfer pricing, such as Google, annoys our European partners and heightens the threat to our tightly guarded rate.
Google, which has its European headquarters in Dublin, stresses that it is fully compliant with tax laws, but the controversy has heaped pressure on the Government, particularly during negotiations at European level of the common consolidated corporate tax base.
The IDA is confident that it can meet its jobs target next year despite the global challenges posed by the crisis gripping key markets such as the Eurozone.
Let us hope for another good news story to kick off 2014.