The IMDO welcomes the recent news that both Irish Ferries and SIPTU have agreed to enter talks to try and resolve the major issue of outsourcing on the Irish Sea. The Office presented a report to the Government in July 2005, which highlighted the pressure on the Irish shipping & Ferry sector and in particular, the threats facing Irish seafaring sector from cheaper European labour operating under Flag of Convenience (FOC) conditions.
As part of its recommendations, the IMDO has set out a number of specific measures which it felt was necessary to implement, if jobs losses and the possible economic extinction of this segment of the sector, were to be avoided. These measures included a net wage tax refund subsidy to companies like Irish Ferries for its Irish Seafarers. The measures are directly linked to either Irish nationality and/or the seafarer being a tax resident in Ireland.
Commenting on the proposals, IMDO Director, Glenn Murphy stated "We remain absolutely opposed to the loss or outsourcing of any Irish seafaring jobs to external labour markets. We feel that the proposals in our report, combined with additional state aids for the sector that the Government has already introduced, some of which are expected to come into effect this year, would provide a significant cost saving to Irish Ferries, which we estimate would be somewhere in the region of €4-5m per annum".
The IMDO, however, is aware that these measures, if introduced by the Government, might not be enough on their own and that further productivity and costs savings would most likely need to be achieved. Mr Murphy added "We are aware that the positional cost (the number of people it takes to fill one shipboard position) needs to be reduced and the number of days at sea worked by Irish seafarers needs to be increased. We are calling on both the Union and the Company not to allow this opportunity to pass, but to work towards maximising these productivity gains, while at the same time getting behind the proposals contained in the IMDO report to Government".
The IMDO also recommended the introduction of a productivity tax break for the sector in 2001, this break which is still available, requires Irish Seafarers to work a minimum of 161 days at sea to avail of an additional €6,350 tax free allowance. However there has been very little up take of this scheme.
The measures put forward by the Irish Maritime Development Office are consistent with European State Aid Guidelines for the Shipping Sector. Several other member states, such as Sweden, Finland, Italy and Greece, whose own ferry sectors have also been encountering similar problems have all acted to introduce national net wage systems for employers of their seafarers.