By Harry Keaney
Ireland’s finance minister, Charles McCreevy, has said the government is committed to cutting personal taxes, despite warnings against doing so from the Economic and Social Research Institute.
Last week, the ESRI urged a suspension of tax cuts for two years until the economy begins to slow down.
The government is expected to announce its tax cuts in the December budget.
Reducing tax rates may be one way to discourage demands for pay increases, which, in turn, could lead to inflation, thus mortally wounding the Celtic Tiger. Already, however, nurses in Ireland are on strike demanding increased wages. The nurses are being closely watched by workers such as policemen, prison officers and other state workers.
However, there’s the belief that tax reductions, resulting in more disposable income, could also lead to increased spending and, perhaps, inflation.
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McCreevy said that expectations for tax reductions and increases in government spending were now "sky high." But, he said, meeting all these expectations would not be consistent with securing a continuation of Ireland’s economic progress, even if the budgetary position could carry the strain in the short term.
McCreevy said the problems of an economy operating at full capacity were becoming increasingly evident with labor shortages, economic congestion and a housing shortage.
"Steps have to be taken to alleviate some of these problems, but there is no magic spell to make them disappear," he said.
Overall, according to McCreevy, the government’s budget must have two key elements, the maintenance of Ireland’s competitiveness and investor confidence.
House prices in Ireland are continuing to increase but at a slower rate. According to a recently released Irish Permanent index, house prices, on a monthly basis for the first nine months of this year, grew by 1.3 percent, compared to 1.6 percent between July and August.
The index also shows that the annual rate of increase, from September 1998 to September 1999, outside Dublin is higher than in the capital.
CBT, the software company which provides learning systems, has renamed itself SmartForce and is now using the ticket symbol SMTF.
Despite posting solid third-quarter results, CBT’s American depository receipts tumbled last week before being halted after the company told analysts that it was revamping its business strategy and accounting methods.
CBT has signed an $11 million long-term agreement with Computer Sciences Corp. to develop new e-learning services for CSC. CBT said that by adding its e-Learning to CSC Sources, Computer Sciences gains online access to CBT Group’s catalogue, technical library, online mentoring, seminars, career planning and other resources.
Computer Sciences helps clients in industry and government use information technology to achieve strategic and operational objectives.
SmartForce said it plans to make "significant ongoing investments" in its e-Learning infrastructure.
Intel invests in Iona
Intel, the world’s largest computer chip maker, has invested the Iona Technologies, the Dublin-based software maker. Iona would not disclose the size of the investment but, according to the Irish Times, Iona said it was "a multimillion dollar" deal.
Iona also said the investment would support the development of updated versions of its "iPortal Suite," product family for Intel’s upcoming 64 bit products. Intel has said these new chips could have a major impact on computer use.
Iona develops "middlewear," software that allows different programs to work together.
Jobs for Derry
British Telecom is planning to establish its largest call center in Derry, a £10 million investment that could create up to 650 jobs by 2001.
BT employs 3,000 people in Northern Ireland, half of whom work in call center operations in Portadown, Co. Armagh; Enniskillen, Co. Fermanagh, and Belfast.
U.S. multinational Raytheon has chosen Derry as the site for a software development center with 150 jobs by the end of 2000.
Stream International is to double its workforce to 500 within 18 months to cover its expanded online technical support services to customers such as dell, Hewlett Packard and Microsoft.
Seagate Technologies, the disk drive manufacturer, has opened phase 3 of its Derry operation, brining its employment in Derry to 1,000 and to almost 2,000 in the region.
Perfecseal is to invest £8.4 million to establish a world-class center of excellence to develop its sterile medical packaging products and services. the company, which currently employs 170 people in Derry, is to increase its total workforce by 10 percent.
A Dublin property developer, Gerry Gannon, paid $12 million at an auction last week for 6.8 acres of land in Malahide Village in north Dublin. On the site is an 18th Century thatched house which is listed for preservation. The land has been rezoned for housing since 1993.
Fordham University’s graduate school of business has a new international transnational MBA program. In the spring of 1999, TMBA students traveled to Ireland to study various aspects of global technological management. Fordham hopes to return to Ireland with future TMBA classes.
For details on the program, call Clarissa Dayton at (914) 829-5302.
Homeless in Galway
More people are sleeping rough in Galway. Galway Corporation figures show an increase in the number of homeless from 54 in 1996 to 142 this year. However, the local Simon Community, which assists the homeless, estimates that almost 1,000 people were homeless in the city at some stage last year.