MEASURES to boost financial confidence in shipping and halt the decline in the Irish fleet have been enthusiastically welcomed by the industry.
Four initiatives taken recently by the Minister for Defence and the Marine, Mr Barrett, will give a "significant" fillip to the sector, the Irish Chamber of Shipping said.
Despite growth in trade and tourism, the number of Irish flagged vessels has fallen by more than 30 per cent since 1987.
In addition, all seagoing oil movements and oil imports are in foreign flagged ships.
Eight Irish coastal vessels flew non EU flags in 1995, as did some Irish livestock vessels according to the chamber.
The measures include removal of "ring fencing" under current legislation, to give tax breaks to Irish ship owners using vessels leased outside the State.
The changes proposed in the Finance Act at committee stage in the Oireachtas represent the first such breakthrough for shipping since 1987, according to the chamber.
Speaking at the chamber's annual dinner in Dublin last Friday night, the Minister said he had persuaded the Minister for Finance to examine imbalances in the cost of employing Irish seafarers.
In certain areas, there are more jobs than qualified Irish personnel. But ship owners must pay higher PAYE or PRSI contributions for Irish employees than their competitors do for non Irish particularly third country crews.
The Minister said "I have no interest in promoting or retaining corporation, income or PRSI tax reliefs for any area under my aegis which does not demonstrably deliver gains in terms of increased competitiveness employment." He also referred to Government agreement for a subsidy scheme for Irish cadets.
Under this scheme, cadets will receive £55 a week during shipboard training. A British subsidy had left Irish cadets at a disadvantage, and was affecting the viability of the Cork Regional Technical College time training school, according the Minister.
Under existing arrangements, institutions buying ships for leasing are entitled to a capital allowance of IS per cent in year one on the ship's value.
Tax is then payable at the 10 per cent manufacturing rate. The arrangements, effective from July 1st, will allow a leasing institution to offset the capital allowance from the lease of a ship against other leasing items, so reducing the overall tax burden.
The "dry leasing" changes in the Finance Bill will reduce their manufacturing tax rate on profits earned from vessels leased outside the State from 38 per cent to 10 per cent.
Expressing "delight" with the interest shown by the Minister, the group's president, Capt Coleman Raftery, stressed the advantages that many EU ship owners had over their Irish counterparts.
The most recent example of this was the aid package of 400 million French francs for Brittany Ferries, which had already received substantial State assistance.
Total tonnage handled by Irish ports rose by 54 per cent between 1985 and 1994, Capt Raltery said. In tandem with the fall in Irish flag vessels was a 43 per cent growth in foreign flag visitors.
