Public Policy Bulletin, 10 August 2020

Aug 07, 2020

In today’s Public Policy news, the latest Exchequer returns in Ireland show a deficit of €7.4 billion, confirming that COVID-19 continues to have a major impact on the Irish economy. On this issue of climate change, the Supreme Court of Ireland unanimously ruled that Ireland’s National Mitigation Plan (2017–2022) lacks specificity and does not give enough detail on how Ireland will become a low carbon country by 2050. You can also take a look at the European Commission’s consultation on sustainable finance which examines disclosures of non-financial information.

July Exchequer returns confirm that COVID-19 continues to have a major impact on Irish economy

According to the latest Exchequer figures published by the Department of Finance, a deficit of €7,405 million was recorded to end-July 2020, in comparison to a surplus of €896 million to end-July 2019. In a recent press statement, Minister for Finance Paschal Donohoe, T.D. has stated that

“this extraordinary increase in public expenditure is a result of the Government’s commitment to supporting our health service and the wider economy through this unprecedented period, as demonstrated with the recent announcement of the July stimulus plan to support businesses and get people back to work”. 

The top five key takeaways from the Fiscal Monitor July 2020 report are as follows:

  1. The rise in expenditure reflects increased departmental drawdown in response to the COVID-19 pandemic, particularly in the areas of Health and Social Protection
  2. Tax revenues for the month of July 2020 were down by €983 million or 18.6 per cent as compared to July 2019.
  3. Cumulative tax revenue to end-July is down by 2.5 per cent.
  4. Receipts to date have benefitted from a strong performance in January and February as well as solid corporate tax receipts.
  5. A sharp decline in personal consumption has led to decline on VAT and excise receipts.

Supreme Court overturns Ireland’s plan to combat climate change 

The Supreme Court of Ireland unanimously ruled that the National Mitigation Plan (2017-2022) to combat climate change lacks specificity and was reportedly “excessively vague and aspirational.”  The Court also found that the plan does not give sufficient detail about how Ireland will become a  low carbon economy by the end of 2050 and therefore does not meet Ireland’s obligations under the Climate Action and Low Carbon Development Act 2015.

Following this ruling, the Government must now devise a new plan, taking into account the Supreme Court’s findings. 

Sustainable finance:  EU consultation on reporting non-financial information 

In order to meet the EU’s climate and energy targets for 2030, the EU is on a drive to redirect investments towards sustainable projects and activities.  To help with this, the EU has created a new classification system (a ‘taxonomy) for environmentally sustainable economic activities, including investments. This means large listed companies, banks and insurance companies will have to publish information on how, and to what extent, their activities align with those considered environmentally sustainable in the EU taxonomy.

The lack of a clear definition of ‘environmentally sustainable economic activities’, however, is a large obstacle to achieving the EU’s objectives. 

The European Commission has published a consultation with the aim of gathering the views of relevant stakeholders and collect information on the expected impacts, costs and benefits of the methodology and indicators proposed by the new taxonomy.

The deadline for comments is 8 September 2020.

Read all our updates on our Public Policy web centre.