Senior Sinn Féin figures and the management of multinationals with Irish operations are feeling each other out. There have been quiet meetings in Ireland as well as party leader Mary Lou McDonald’s recent tour of US boardrooms. There is no doubt about what is going on — Sinn Féin is preparing for (possible) government and the big multinationals are curious about what they might do if this happens.
For years one side was from Mars and the other from Venus — now both know that they may have to do business. The big corporates are massively invested here, which means they are hugely interested in and affected by what happens in Ireland. It also gives them considerable power to influence policy. The flip side of a country rolling in corporate tax revenue is that decisions made in a few US boardrooms are vital for Ireland’s future. And both sides know that.
For Sinn Féin, the golden goose of corporate tax revenue and the wider economic and tax benefits of the multinational presence here are vital. They will pay for a lot of its social agenda and to give more options to help fund its overriding goal — reunification of the island. And this all-island political and economic agenda has been clearly outlined by McDonald to corporate leaders.
Sinn Féin has played a long — and more-recently systematic — game to building bridges with business
A lot of what big business wants comes down to stability. So the change which a Sinn Féin-led government will bring inevitably raises questions. What will it mean for economic management and for policies specifically directed at business? Would economic stability be threatened by its management of the public finances, or its response to the next crisis?
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Sinn Féin, after all, has not been slow in making populist promises to spend public money. Indeed the big corporates can see that Sinn Féin is already setting a lot of the economic agenda from the Opposition benches.
The charm offensive of recent years has calmed some nerves — Sinn Féin is clearly listening and both sides understand the other’s position better. The party’s senior figures are always well-briefed. It has not played the anti-immigration card — an important signal for big businesses who need to attract employees from all over the world. And the party is committed to EU membership — a vital issue for big businesses — though sceptical of moves towards further integration.
But when your key buzzword to voters is “change”, then selling the stability message over the canapés at business dinners can’t be easy. The question, as one observer put it, is whether Sinn Féin can walk a path between satisfying its supporters while at the same time keeping the big multinationals onside. For businesses, the jury will be out until the party is in government and they see what it actually does.
Sinn Féin has played a long — and more-recently systematic — game to building bridges with business. The TDs who had forged some links during the Gerry Adams’ years — Pearse Doherty, Louise O’Reilly and a few others — are now in the vanguard. The party has tacked back towards the centre-ground in many economic policy areas. The nervousness in business now relates more to the unknown — what Sinn Féin would actually do in government — rather than to specific policy positions. Though there are a couple of those, too, notably in the area of personal taxation.
Sinn Féin has provided significant reassurance via its approach to corporate taxes. It supported the battle to retain the 12.5 per cent rate — which may now rise to 15 per cent for big businesses. It has called for higher PRSI charges on employers, but this is likely to happen regardless of who is in power. One message conveyed from boardrooms to the visiting Sinn Féin delegation was that big multinationals can deal with policy changes, but don’t like surprises.
The multinational sectors, largely unaffected by Covid-19, are now feeling the same kind of economic tremors as everyone else from the energy crisis
An interesting side-issue is whether Sinn Féin would continue the State’s fight alongside Apple against European Commission demands that it owed Ireland billions in tax — now at appeal stage.
There are tensions over personal taxation. Sinn Féin’s believes better off people should pay more tax. Its 2023 budget proposals will be published on Monday, but it has called for a special tax surcharge on higher earners and the phasing out of personal tax credits for this group. This would add an extra tax burden for multinational executives and their better-paid employees.
These debates tend to be framed by a few red button issues. One of them will be what is called “SARP” — the special assignee relief programme. This is part of a grubby international practice where countries facilitate low effective income tax rates for senior executives sent to their countries by big companies. Sinn Féin has called for the abolition of this relief and it is a significant issue for its base.
Multinationals warn that if it is not in place they are likely to send their senior people elsewhere — and this could threaten investment. The Tax Commission came down in favour of retaining it, but only after a big row.
Business will hear Sinn Féin’s claims that it can address roadblocks in areas like housing, but will question whether it will just run into the same old barriers. Again, it will come down to delivery. Among Irish-owned businesses, old links to Fianna Fáil and Fine Gael — and the weight of Sinn Féin’s history — are big factors, too.
It all comes at a delicate time. The tech and pharma sectors remains strong, but there are some signs of cooling growth. Issues such as housing and energy security mean that other locations are competing more strongly with Ireland for future investment than was the case a few years ago.
The multinational sectors, largely unaffected by Covid-19, are now feeling the same kind of economic tremors as everyone else from the energy crisis. It would be ironic if Sinn Féin took power just as corporate investment and taxes were already starting to ease back.