Plus ?a change…
Despite predictions that this year's election would be one of the closest fought in many years, the Government which will take its seats on June 14th is unlikely to be much different to the one that preceded it.
The collapse in the Progressive Democrats' vote is one of the major stories of this election, but, with two seats, it is likely that both Mary Harney and Noel Greelish will sit behind Taoiseach Bertie Ahern in the Dail, in a Government made up of 78 Fianna Fail seats, the PDs' two seats and a number of independents.
If this is the case, the financial services industry can remain optimistic about future policy directed at this sector, as Fianna Fail's track record is regarded amongst senior financial services executives as reassuring.
Moreover, ahead of the election, the PDs declared that they would 'maintain and vigorously defend the 12.5 per cent corporation tax rate', as well as the 20 per cent rate on capital gains. In addition, during its campaign, the PDs published a special IFSC leaflet, calling on the electorate to 'save the IFSC'. Less than a week before polling day, they circulated a leaflet to IFSC professionals arguing that a vote for the opposition parties was 'gambling with the future' of IFSC jobs.
From a perspective of May 28th, the other potential combination is to include the Green Party, which won six seats, with a Fianna Fail/Labour party coalition being the outside bet. From a financial services perspective, a Fianna Fail/Greens coalition could be more problematic.
Although, prior to the election, the Greens gave their support to the low headline corporation tax rate of 12.5 per cent, and writing in Finance Dublin expressed their commitment to the future development of the IFSC, the party were also vocal on a number of issues which irked the financial services industry. In its manifesto, the party argued that it would re-introduce the €200 million annual bank levy that the Government last implemented in 2002. Moreover, the Greens also proposed increasing the standard rate of Capital Gains Tax from 20 per cent to 25 per cent because, 'those who benefit from capital gains currently pay less tax than many of those who pay tax on their earnings'.
However, observers expect that the chance of this element of the Green's manifesto even making it on to the agenda of any discussions between FF and the Greens in a post-election situation as zero.
If they are right, the financial services industry can continue to feel confident that Ireland Inc offers a nurturing environment for the further growth in what is now a jewel in the crown of the Irish economy. |
