In this week’s public policy bulletin, we provide an update on our recent nationwide members forums on the issue childcare in Ireland and Northern Ireland. We also take a take a look at some of our recent submissions to Government on policy issues such as the private rental sector and the right to request remote work. Members forums on childcare The Institute’s public policy team were delighted to meet with members over the past month at our Member Forums on the topic of childcare. Members from across the island shared valuable insights into how the current systems of childcare (both in the Republic of Ireland and Northern Ireland) have impacted their careers as working parents to date. Members also shared their opinions on how they feel the current systems of childcare supports could be improved to better assist working parents on both sides of the border.  We would like to express our sincere thanks to every member who attended these important forums (and others who submitted written comments) as we collate the feedback we received and develop our advocacy agenda on this hugely important topic.  If anyone would like to contribute further information to us, please email stephen.lowry@charteredaccountants.ie. Response to the Irish Government’s public consultation on its review of the private rental sector Last week, the Institute’s tax and public policy team, under the auspices of the Consultative Committee of Accountancy Bodies – Ireland (“CCAB-I”), submitted a response to the Government’s public consultation on the private rental sector. Our response outlined the pension policy implications arising from longer term renting and the overall decline in homeownership rates seen in recent years. Our comments also proposed a suite of new tax measures that would accelerate investment in retrofitting works by landlords, stem their exodus from the market, while at the same time improving security of tenure for tenants. You can read the full submission here. Submission to Ireland's Workplace Relations Commission on the development of a Code of Practice to govern requests for remote work   Following the passage of the Work Life Balance and Miscellaneous Provisions Act 2023, the Workplace Relations Commission (which has been tasked with the responsibility of drafting a Code of Practice to govern requests for remote working) launched a public consultation on the issue. The Institute’s public policy team provided a response to the WRC’s consultation in which we stressed the importance of the Code being produced in a timely fashion and moreover, in clear and unambiguous language. Doing so will be vital to ensuring that both employers and employees alike have a clear understanding of the framework within which they can exercise their rights, obligations and entitlements under the parent Act. You can read the full submission here.

In this week’s Public Policy Bulletin, read about recently announced Government initiatives to support remote working in Ireland, a BearingPoint study which analyses 123 European banks and the recently released annual report on public debt in Ireland. We also cover Minister McConalogue and Northern Ireland’s Minister Lyons’ trip to Expo 2020 Dubai and a statement from Minister Lyons on the independent review of Invest Northern Ireland  Initiatives to support remote working announced by Minister Humphrey   This week, the Minister for Rural and Community Development, Heather Humphreys, announced a series of major initiatives to support Remote Working. Through the Connected Hubs 2022 Call, the Department of Rural and Community Development will provide €5 million to add additional capacity to the existing remote working infrastructure in Ireland by upgrading existing hubs and Broadband Connection Points (BCPs). €8.9 million has already been provided for 118 remote working projects across the country in 2021.  In May 2021, the National Connected Hubs network was launched with 60 hubs onboarded onto the connectedhubs.ie platform. There are now in excess of 200 hubs live on the connectedhubs.ie platform, with an aim to hit 400 hubs by 2025. The Connected Hubs mobile app has been launched to allow users to find their nearest hub facility and easily book a desk space using their mobile device.   Read the press release here.  Pandemic impact on European and Irish Banks   A BearingPoint study has found that Irish banks were hit harder than many of its European peers during the Covid-19 pandemic. The study looked at 123 European banks from 2013 to 2020 and found that Irish banks set aside significantly more capital for the impairment of loans during the pandemic (an increase of 1300 percent), when compared to their European counterparts (an increase of less than 120 percent).  In 2020, Bank of Ireland and AIB had impairment charges of €1.1 billion and €1.4 billion respectively due to Covid-19 concerns. Irish banks had a negative return of 6.3 percent in 2020, compared to a European average return on equity of 2%. 2020 cost income ratios for Irish banks averaged at 68.7 percent, higher than the European banks average of 64 percent and the optimum cost income ratio, which should be less than 55 percent.   Noel Crowley, the Financial Services Director at BearingPoint, shares his response to the report here.   Annual Report on Public Debt in Ireland 2021   The Minister for Finance, Paschal Donohoe released the fifth annual report on public debt this week. The report found that public debt increased by €33 billion during the two years of the Covid-19 pandemic, now approaching a quarter of a trillion euros. This is an estimated 106 percent of national income or €47,250 for every person in the country. These figures stood at 95 percent and €41,450 in 2019.  Minister Donohoe highlighted the major fiscal challenges that lie ahead, including a likely fall in corporation tax receipts, an aging population and the large fiscal costs that will be required to finance the journey to “net neutral”. In a press release issued by the Department of Finance, Minister Donohoe concludes “This is why we need to rebuild our fiscal buffers, including by steering the public finances to a more balanced path. We can do this while continuing to make significant capital investment, as outlined in the National Development Plan. This will help to lay the foundations for future growth while protecting against the future fiscal challenges that lay ahead of us.”   Read the full report from the Department of Finance here.     Dubai’s Expo 2020  Minister for Agriculture, Food and Marine, Charlie McConalogue opened a Board Bia celebration of Irish food at the Irish pavilion at Dubai’s Expo 2020, with the current year theme “Island of Inspiration” highlighted when he remarked “that spirit of inspiration and creativity reflected in the Irish food producers, large and small, who are innovating and finding routes to premium markets in the Gulf region”.  Northern Ireland’s Economy Minister Gordon Lyons also attended the event during his two-day visit program to the UAE. Speaking from the UK Pavilion at the Expo, under the UK’s theme of “Innovating for a shared future”, Lyons said “Today, Northern Ireland is centre stage at the world’s largest live international event. We are here to bring a flavour of Northern Ireland to the world and showcase our innovations within business, tourism, food and education to a global audience."  Invest Northern Ireland independent review  Northern Ireland’s Economy Minister Gordon Lyons made a statement to the NI Assembly this week in relation to his decision to commission an independent review of Invest Northern Ireland (Invest NI). He pointed out the fantastic track record Invest NI has in making Northern Ireland the most attractive location in the UK, outside of London, in respect of foreign direct investment.   The statement from Lyons can be read here.   Dame Rotha Johnston DBE and Ms Maureen O’Reilly have been appointed as panel members to work with the panel chair, Sir Michael Lyons for this independent review. The report of their findings is expected in September 2022.   Invest NI’s offers of financial assistance to companies beyond March 2020 is currently on pause, as they await clarification on their potential 2022/2023 Budget sign allocation from its parent Department for the Economy 

Oireachtas Committee responds to the final report published by the Commission on Pensions In its response to the Report of the Commission on Pensions, the Oireachtas Joint Committee on Social Protection, Community and Rural Development and the Islands has recommended that Ireland’s State Pension age remain at 66 years. This rejects the proposal put forward by the Commission on Pensions last year that the qualifying age is increased from the current 66 years by three months every year from 2028, reaching 67 in 2031.  To fund this, the Committee recommends that the Commission on Welfare and Taxation examine potential changes to Employers’ PRSI contribution rates.  Among the 13 proposals put forward, the Committee also recommends banning the mandatory retirement age for both new and existing employment contracts. Chartered Accountants Ireland issued a statement following the response this week, welcoming the recommendation to leave the state pension age unchanged at 66 years, while recognising that the shortfall in funding the State Pension long-term needs to be addressed. The Institute said that asking employers to pay increased rates of PRSI cannot be a long-term solution and the fact that employers are already paying high salaries to compensate workers for high personal tax rates must be recognised. The Committee also recommended that funding auto-enrolment should not be prioritised over retaining the current State Pension age. Chartered Accountants Ireland however believes that reforms to enhance the sustainability of the State Pension cannot take place without parallel reforms to increase private pension coverage in Ireland to enable workers to avoid living their retirement in poverty.    Calls for coherent Government policy were also made to enable workers to adequately plan for their retirement. Bank of Ireland’s recent economic pulse survey indicates pay rises this year    According to the most recent Bank of Ireland economic pulse survey, 50 percent of firms are pricing in pay rises this year. 56 percent of people surveyed indicated that it is now easier to find or move jobs, with a third of firms reporting a struggle to fill open positions. 46 percent of those surveyed expect to see a 3 percent average increase in wages in the next year. According to Bank of Ireland’s chief economist Loretta O’Sullivan, “As businesses look to retain and attract staff, and workers find it easier to get or change jobs, upward pressure on pay is likely” with a shortage of workers helping to drive the pay increases. The survey also indicated that 77 percent expect houses prices to rise in the next 12 months, with 70 percent also expecting a rise in rent. 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. Tánaiste intends to strengthen remote working laws   We highlighted the draft Bill to give employees the right to request remote working published by Tánaiste Leo Varadkar. The proposed legislation will set out a legal framework to apply for remote working, the reasons the request could be refused and outlines the process for appeals. The Tánaiste discussed the draft Bill with the Select Committee on Enterprise, Trade and Employment this week, indicating his plans to strengthen the legislation and his intention that “employers cannot just tick a box to say no”. The Tánaiste also reiterated that the Bill is in draft form and that “there can’t be an absolute right to remote working”. Chartered Accountants Ireland has written a letter to the Tánaiste to request clear and comprehensive guidance, including practical examples, to assist our members to implement the legislation when it becomes law. Read the Draft Scheme of the Right to Request Remote Working Bill 2022. Enhanced Illness Benefit (EIB) extended The Minister for Social Protection, Heather Humphreys TD, has secured Government approval to extend the EIB payments until the end of June 2022. Almost €230 million has been paid in EIB to date, supporting over 374,000 people. The €350 weekly payment is available to people diagnosed with Covid-19 or told to self-isolate. This is available to employees or self-employed people. For more information, and to apply, go to MyWelfare.ie. Northern Ireland Business Demography Statistics 2020 released Northern Ireland Statistics and Research Agency (NISRA) recently released the latest business demography results for Northern Ireland which looks at births, deaths and survival rates of Northern Ireland businesses by Industry and District Council Area. 6,375 businesses were born in 2020, a decrease of 3.8 percent on the previous year. 4,900 businesses closed during the year, a decrease of 9 percent from 2019. The number of businesses births was greater than the number of business deaths for all district council areas across Northern Ireland.   Retail saw an introduction of 780 businesses in 2020, a 47 percent increase on 2019 and the highest number of births for the sector since the series by industry began in 2009. Importance of Traineeships as part of economic recovery in Northern Ireland This week, Northern Ireland’s Economy Minister Gordon Lyons highlighted the importance of traineeships to enable economic recovery in the region stating that “developing the local skills base is a key priority for me and a cornerstone of the recovery”. As part of the Department for the Economy’s 10X Economic Vision, the goal is “to equip people with the skills they need for the constantly evolving jobs market and build on Northern Ireland’s successes on the global stage”. The £180 million NI Traineeship program, launched in September 2021 as part of the economic recovery package, intends to fund 20,000 Traineeship places over the next seven years.

To look forward and create a better business environment to restore employment and the economies on the island of Ireland, Chartered Accountants Ireland have published a landmark position paper called “The Next Financial Year: Making Irish Business More Competitive”. It draws on problems encountered by members and member firms in handling the Covid-19 crisis to propose how this can be achieved. From members working at the coalface of both economies, we know that businesses, particularly SMEs, are fighting hard to survive.  For the next financial year, we propose how government can help by simplifying processes and removing red tape, and by going fully digital.  We also call for a range of targeted tax measures and supports for businesses in Ireland and Northern Ireland, as well as emphasising the importance of excellent corporate governance and professional ethics. “The Next Financial Year: Making Irish Business More Competitive”, a position paper with alternative approaches and proposals informed by extensive engagement with members, for a better business environment post-pandemic be read or downloaded from our website.

  On June 23 IFAC responded to the European Commission’s review of the Non-Financial Reporting Directive (NFRD). In this review IFAC urged the Commission to adopt a global mindset by engaging input from a broad range of international stakeholders in determining the best way forward.  Steps taken must “fit within” a global system and avoid regional regulatory fragmentation.  Non-financial reporting answers the call from investors and other providers of capital for better, broader information about company performance and prospects for value creation, while also helping identify opportunities to support sustainable—and less carbon-reliant—business models. In the post-COVID world, corporate reporting that reflects the needs of a broad range of stakeholders will be particularly important to communicate on an organization’s performance and priorities.     As a Network Partner of the B20, IFAC calls on global bodies—including the G20—to encourage policy-makers, standard-setters, and regulators to facilitate harmonization towards a globally-acceptable approach to reporting ESG metrics and disclosures.