Irish tax model offers blueprint

Irish businessman Sir Anthony O'Reilly believes New Zealand should emulate Ireland and offer preferential tax rates to attract foreign investment.

O'Reilly recounted to an Auckland rugby luncheon how Ireland had set up an Industrial Development Authority to "welcome foreign investment".

"It courted it. It impressed it. And staked it to be the centre of the economy today with hardware and software and pharmaceuticals and healthcare and soft drink essences.

"The fourth-largest export from Ireland today is Coca-Cola concentrate."

Initially tax rates for approved offshore investors were set at 10 per cent. They are now at 12.25 per cent across the board as Ireland endeavours to maintain its competitive advantage.

O'Reilly points to "startling" Deutsche Bank projections that by 2020, "poor little Ireland - the handmaiden of Europe 50 years ago - will be the second-richest place in the whole world, with income [GDP] at US$48,000 per capita."

The US will still lead, with real GDP per capita of US$50,000 ($73,118).

National finance spokesman John Key said there was a chance that New Zealand could house some "quite key industries here" if it offered preferential tax rates for greenfields investors.

Key is concerned New Zealand is losing competitiveness as the global trend towards lower corporate tax rates intensifies. "Financial capital is a lot of things, but patriotic is not one of them."

O'Reilly is the single largest shareholder in Independent News & Media Plc, which has a major stake in the Herald's owner, APN.