Cantillon: You’ll never beat the Irish?
Profits per head of up to six times those found elsewhere in Europe? Not exactly ...
Google was hauled over the coals by Britain’s public accounts committee, on foot of allegations that it was routing British-earned profits through this country
At first glance, the report from PWC – measuring the profits per employee of multinationals operating here – appears to cement Ireland’s self-aggrandised reputation for its “talented, productive, English-speaking workforce”.
Profits per head in Ireland of up to six times those found elsewhere in Europe? Fantastic. A return on people investment (or wages) that is, yet again, higher than anywhere else in Europe, higher even than the US? That tallies with what IDA Ireland has been saying to foreign investors all along – ie that we are brilliant.
But just how brilliant?
The study, however kind it may be to Irish workers, is also slightly misleading. Its methodology was to take data from the US companies that have invested here and that comprise the US-Ireland Chamber of Commerce.
The chamber includes a host of companies that have been criticised abroad for routing profits through Ireland that were allegedly earned elsewhere, to take advantage of Ireland’s 12.5 per cent corporation tax rate.
For example, Microsoft in France was investigated there last year for allegedly routing profits through Ireland; Google was hauled over the coals by Britain’s public accounts committee, on foot of allegations that it was routing British-earned profits through this country; Apple in Australia has been accused of routing some of its profits through Ireland.
To some of our European neighbours, Ireland is a profit-grabbing, investment-sucking, tax rate-cheating nuisance. Anyone who knows this State well also knows that this point of view is exaggerated and unfair.
But it doesn’t help to rub other Europeans’ noses in it, by claiming that our workers are six times more profitable than those abroad. It’s impossible. Irish workers are good, but they’re not