Budget and its impact on the IT Job Sector
So the dust is starting to settle following one the hardest hitting budgets in the history of the state. Now that we’ve had the chance to crunch the numbers and see how it affects us as individuals, we can focus on what it will mean to the IT sector and those working within it?
The key announcement for me is that corporation tax remains at 12.5%. In my opinion that is the significant driver in Ireland’s economic recovery. Foreign investment in Ireland will keep people in jobs and create new jobs, which will improve confidence and get people spending again.
In December, the IDA announced the creation of 500 new roles with Citi, who are already based in Ireland and through new businesses including Genband and Aspect. These organisations feed local businesses that are in the supply chain and boost the local economy by creating employment.
Those who work in the IT sector are going to have less money in their pockets as a result of the broadening of the income tax bands. Many will be brought into the 41 per cent bracket for the first time. In addition, the new universal social welfare contribution will impact everyone.
Whilst some of the budget measures are extremely harsh,I don’t beleive it will lead to mass emigration amongst skilled IT professionals. They will still be enticed by the major IT companies who continue to invest in Ireland’s knowledge economy and create opportunities, demonstrated by last weeks rumours that Twitter is considering Ireland as it’s EMEA HQ.
In addition, there were no measures introduced to tax limited company directors more aggressively than PAYE employees. This has always been a concern for these professionals and the multinational organisations that engage them.
No one will escape the impact of these tough austerity measures, but it is my hope that the stance taken on corporation tax should guarantee jobs through this tough period.
The key announcement for me is that corporation tax remains at 12.5%. In my opinion that is the significant driver in Ireland’s economic recovery. Foreign investment in Ireland will keep people in jobs and create new jobs, which will improve confidence and get people spending again.
In December, the IDA announced the creation of 500 new roles with Citi, who are already based in Ireland and through new businesses including Genband and Aspect. These organisations feed local businesses that are in the supply chain and boost the local economy by creating employment.
Those who work in the IT sector are going to have less money in their pockets as a result of the broadening of the income tax bands. Many will be brought into the 41 per cent bracket for the first time. In addition, the new universal social welfare contribution will impact everyone.
Whilst some of the budget measures are extremely harsh,I don’t beleive it will lead to mass emigration amongst skilled IT professionals. They will still be enticed by the major IT companies who continue to invest in Ireland’s knowledge economy and create opportunities, demonstrated by last weeks rumours that Twitter is considering Ireland as it’s EMEA HQ.
In addition, there were no measures introduced to tax limited company directors more aggressively than PAYE employees. This has always been a concern for these professionals and the multinational organisations that engage them.
No one will escape the impact of these tough austerity measures, but it is my hope that the stance taken on corporation tax should guarantee jobs through this tough period.
Labels: Budget, corporation tax, IDA, IT jobs
posted by James Milligan
4 Comments :
Broadly agree with your points - albeit I would consider them old think. As well as providing a ready skill pool for the multinationals, who can be remarkably transient, we MUST continue to build an indigenous IT industry. This is far more likely to survive market up and down turns that are yet to come. To do that we need a total sea change of attitude towards funding high risk innovation and start-ups. Sadly, I don't see any sign of that in the budget.
I'd have to say that i also broadly agree with your points, but i can also see and agree with the previous person. Ireland will not get out of the mess that it is in by just relying on large incumbent multinationals or its corporation tax at 12.5%.
Has the previous person said what this country needs to do is turn its attention towards supporting & encouraging the wealth of home grown talent we have at our disposal not only within the IT sector but others also and the funding and developing those local start-ups, something that unfortunately they seem extremely reluctant to have done in this or indeed any of the past budgets.
The only thing the last budget did was look after those already in strong position and in my opinion and enable them to further tighten that the grip on those trying to make a start, and i for one actually hope that Twitter Ireland chose Ireland for their EMEA HQ and that some of the other 8 valley big guns currently looking at Ireland follow suit and go else where and then finally the government may see that a 12.5% corporation tax isn't as important as supporting local enterprise.
I agree with both of you, more can be done to encourage growth in the indigenous IT industry with a reputation for innovation. I acknowledge what can be achieved when entrepreneurs in this sector are given the opportunity. Just looking at some of the organisations to emerge from the Digital Hub such as Havok proves this.
However, I strongly believe that Ireland should leverage the springboard that the multinational organisations provide in terms of skills, culture and best practice. Without investment from multinationals it will be a very long road to recovery.
The budget was very harsh, the government are looking for a hell of a lot more money from PAYE worker's in general
What makes me feel sad is the people really effected by Ireland's crisis, the people who had good credit ratings, bought a grossly overly priced family home, are the ones who are suffering the most now, with huge mortgages being chipped away at every budget by both their employers and this government and probally the next one who will come in, who ever that is!!
We all talk about emigration but for a lot of family's thats not really an option.
I just thank my lucky stars that when I borrowed as a nipper I had such bad credit from not paying banks back, I never got the chance to run up serious debt, and I am now debt free.
SME's are still buying, innovative solutions like ours are selling, but there is some real poverty out there at the moment with less fortunate PAYE workers.
Those IT Skills should be backed up with some Sales ability if people want real redundancy.
One thing for sure, you need to be very smart and constantly on the ball to keep earning wealth in this country, Oz, Canada should be places for certain companies to review as an expansion or even closer to home the UK.
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