In this week’s Public Policy Bulletin, read about Ireland’s the new auto-enrolment pension scheme, the Sick Leave Bill 2022’s progress and Bank of Ireland’s recent economic pulse survey which shows significantly reduced consumer confidence. We also cover a meeting of Ireland for Finance strategy’s Joint Committee attended by Minister Sean Fleming and Commissioner Mairead McGuinness, £170 million funding for three innovation projects at Queen’s University Belfast and the launch of Northern Ireland’s new Skills Strategy.
Irish Government announces new automatic enrolment pension scheme
The long-awaited new auto-enrolment pension scheme announced by Minister Heather Humphreys this week plans to automatically enrol an estimated 750,000 workers aged between 23 and 60 and earning over €20,000 from January 2024. They may choose to ‘opt out’ after six months but will be automatically enrolled again after two years.
For the first three years, employers will be required to match employee contributions at a rate of 1.5 percent to a maximum of €80,000 earnings. The Government will also contribute €1 for every €3 contributed by employees. The contribution rates for employees and employers will increase to 6 percent over a ten-year period.
The Institute has long advocated for the introduction of this scheme to help increase private pension coverage in Ireland and reduce the reliance on the State Pension. In a statement, the Institute welcomed the Government’s announcement with cautious optimism, citing that sustained momentum is needed to introduce the scheme by 2024.
Publication of the Sick Leave Bill receives Government approval
This week, Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar received Government approval for the publication of the General Scheme of the Sick Leave Bill 2022. The new laws plans to give all workers the right to paid sick leave, which to be phased in over a four-year period.
The Bill has completed Dáil Éireann, First Stage. Once signed into law, the Bill will entitle employees to up to and including three statutory sick leave days in the first year, rising to five days in 2024, seven days in 2025, and ten days in 2026.
Sick pay will be paid by employers at a rate of 70 percent of an employee’s wage, subject to a daily maximum threshold of €110 but the Bill does not prevent employers offering better terms or unions negotiating for more through a collective agreement.
It had been expected that this scheme would be in place from 1 January 2022 and a definitive start date has not been outlined by the Government for the refreshed legislation; however, the Tánaiste expects this to be around the middle of the year.
The results of a survey of members last year showed broad support for the introduction of Sick Leave. The Institute has however written to the Tánaiste on several occasions outlining concerns over the planned timeline for its introduction, noting that businesses will need at least six months to implement a system of sick pay from the issuance of clear guidance. We will continue to communicate with the Tánaiste’s department and will keep members updated on this.
The Sick Leave Bill 2022 and Explanatory Memorandum can be found here.
Bank of Ireland’s recent economic pulse survey indicates significant knock to customer confidence this month
According to the most recent Bank of Ireland economic pulse survey, consumer confidence dropped to a 17-month low in March 2022, driven by concerns for the economy and inflation. Nine out of ten households expect consumer prices to rise over the next twelve months.
The Economic Pulse is based on a series of monthly surveys of households and firms where they are asked for their views on a wide range of topics including the economy, hiring activities, business plans, personal spending and financial situations among others.
This month, 83 percent of businesses reported an increase in their non-labour input costs, up from 79 percent in the previous month. Despite this, over a third of businesses expect to spend more on investment this year.
According to Bank of Ireland’s chief economist Loretta O’Sullivan, “Having reached a new peak last month, the Housing Pulse came unstuck this month”, with households in all regions paring back their expectations for future house price gains. Three in four believe rents will continue to rise as the demand for accommodation remains higher than the number of properties available to buy and let.
Commissioner McGuinness welcomed by Minister Fleming at the Q1 Joint Committee of the Ireland for Finance strategy
Commissioner McGuinness was welcomed by Minister of State Sean Fleming to address the first quarter meeting of the implementation committees of the Ireland for Finance Strategy, held this week in Dublin. Commissioner McGuiness was invited by Minister Fleming to provide an update on the status of the Digital Finance Package and the Sustainability Finance Strategy to executives from the International Financial Services sector.
Speaking at the meeting, Minister Fleming stated:
“Ireland’s membership of the EU and our commitment to the development of a single market for financial services has been at the core of our success in developing the international financial services sector here. It was a pleasure welcome Commissioner McGuinness to Dublin to meet with representatives of the sector and hear first-hand our plans to build on that success as we look to enhance and extend the Ireland for Finance strategy.”
Employment in the Financial Services sector is at its highest level with 52,000 people working across Ireland in investments funds, international banking, insurance and fintech.
The Joint Committee, which is made up of senior executives from the private sector, senior officials from government departments and the enterprise agencies, meets quarterly to oversee the implementation of the Ireland for Finance strategy and to approve the annual action plans that look to develop and grow the number of people working in international financial services.
Read the full report here.
£170 million for three innovation projects at Queen’s University Belfast
Northern Ireland’s Economy Minister Gordon Lyons announced more than £170 million in funding for three innovation projects at Queen’s University Belfast as part of the Belfast Region City Deal.
The three innovation projects are as follows:
- Advanced Manufacturing Innovation Centre
- Global Innovation Institute
- Institute of Research Excellence for Advanced Clinical Healthcare
The Minister visited the Northern Ireland Technology Centre (NITC) at Queen’s University Belfast to view progress on the Advanced Manufacturing Innovation Centre, which will be a springboard for manufacturing innovation in Northern Ireland.
Minister Lyons launches new Skills Strategy for Northern Ireland
Last Friday, Minister Gordon Lyons launched ‘Skills for a 10X Economy’ at Belfast Met’s Titanic Quarter campus. The strategy sets out plans to focus on innovation by increasing further education qualifications in technical and professional skills and rebalancing higher education towards Science, Technology, Engineering and Maths, as part of the wider 10X Economic Vision for Northern Ireland.
At the launch, Lyons stated: “As we look to accelerate the economic recovery, our vision is to make Northern Ireland one of the world’s elite small economies. The skills of our workforce are central to achieving this goal.”
The strategy plans to tackle inequality by supporting people with low or no qualifications to overcome barriers to employment, with Lyons highlighting that 13 percent of Northern Ireland’s working age population hold no qualifications, nearly double the UK average.
Read more here.
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