Benefits of corporation tax reduction must be shared by all through job creation
Download a copy of NICVA's response to the 'Rebalancing the Northern Ireland economy' consultation.
Commenting on the response NICVA's Chief Executive, Seamus McAleavey said:
"When it comes to the Northern Ireland economy it's clear that the status quo is not good enough. A lower rate of corporation tax has the potential to attract foreign direct investment and create jobs but our Executive must be certain the deal is a good one for everyone in Northern Ireland and not just the shareholders of companies. The potential benefits have to be weighed against the reduction in the Northern Ireland Block Grant and the Executive's spending power before any decision to proceed is taken".
"For NICVA and our members in the voluntary and community sector the number one priority for any reduction in corporation tax must be job creation. A concerted and coordinated effort must be made to include those people currently furthest from the job market and a reduction in corporation tax should only benefit those companies that are actively adding to Northern Ireland's economy by increasing the level of employment, investment and exports."
"However the Azores rules mean that a reduction in corporation tax will lead to some businesses such as utility providers and banks making significant windfall gains without having created any additional jobs or contributed in any additional way to the local economy. NICVA would like to see the Northern Ireland Executive come to an agreement whereby windfall gains would be either passed onto businesses via increased loans, in the case of publicly owned or part owned banks, or passed onto customers in reduced energy prices, in the case of utility companies regulated by the Utility Regulator."
"Whatever its merits we need to remember that a lower rate of corporation tax is not a silver bullet for the economy. A reduced rate of corporation tax will be little incentive to companies who see a region divided and embroiled in episodes of civil unrest. If the Executive choose to reduce the rate of corporation tax it must simultaneously tackle a number of outstanding issues; in order to make any reduction have a sustainable and long term impact on our economic performance, the Executive must do more to deliver a more socially just, accepting and open society that will be attractive to international investment and talent," said Seamus.
Engaging in economic policy is crucial for the voluntary and community sector and as a result NICVA has established a Centre for Economic Empowerment (CEE), which aims to improve the economic analysis skills of the sector and to increase their capacity to influence future economic and fiscal policies.
"The CEE will help us deliver an informed message of the need for a more sustainable and equitable economy and society. Having a dedicated platform for research, discussion, and capacity building will allow informed debate to take place and our voice to be heard," concluded Seamus.