In this week’s public policy bulletin, we examine the latest wage growth statistics from November together with the latest from Government on its revised enterprise policy and progress in relation to the National Digital Strategy. We also take a look at the launch of a review into late payments made to small businesses in the UK as well as a series of new proposals from the European Commission aimed at harmonising corporate insolvency rules across the EU. Slowdown in wage growth seen in November   According to a new report jointly developed by economists from the Central Bank and recruitment site Indeed.com, wage growth slowed across economies in Europe during November – with this slowdown being most acutely felt in Ireland, Italy and the Netherlands.  The Indeed Wage Tracker measures growth in wages and salaries advertised on Indeed job postings across eight advanced economies, made up of six euro-area countries, the UK and the US. While in 2022 growth in posted wages in job ads on Indeed accelerated sharply as labour markets continued their recoveries from the pandemic, November data suggests that this period of accelerated wage growth “could be coming to an end”. As set out in the report, wages rates across the six-euro area countries tracked fell from an annual rate of 5.2 percent in October to 5.1 percent in November, the first decline in 19 months. Enterprise policy direction to 2030 announced This week the Government approved a ‘White Paper on Enterprise’ effectively setting out the State’s policy direction on enterprise to the end of the decade. Framing it as “a plan of adaption rather than a major departure” from current Government policy in the area, the paper sets out a range of ambitious objectives as part of the strategy. Included amongst these objectives is a 20 percent increase in IDA client expenditure by 2024, a target of 2.5 percent average annual growth in Irish-owned enterprise productivity by 2024 as well as an overall spend of 2.5 percent of Gross National Income on research and development by the year 2030.   Progress report on National Digital Strategy This week the Government issued a progress report on its National Digital Strategy, ‘Harnessing Digital – The Digital Ireland Framework’. Launched in February of this year, the aim of the strategy is “to drive and enable the digital transition across the Irish economy and society” across four key dimensions – enterprise, infrastructure, skills and public services. Outlining the progress that has been made across each of these dimensions since the strategy’s launch, the report highlights how Ireland retained its strong position of 5th out of the EU27 in the EU’s 2022 Digital Economy and Society Index. Some of the milestones highlighted by the report include: the launch of an €85 million Digital Transition Fund to support companies at all stages of their digital journey; a new digital training scheme for SMEs, ‘You’re the Business’, in partnership with Google; and the publication of a revised Statement on the Role of Data Centres in Ireland’s Enterprise Strategy in July The report makes particular mention of the importance of accelerating Ireland’s digital development in view of the “economic headwinds” currently facing Irish businesses and households together with the recent job losses seen in the technology sector. UK Business Secretary launches review into tackling late payments to small businesses UK Business Secretary Grant Shapps this week announced an in-depth review into payment practices to small businesses aimed at reducing late payment of invoices by larger companies which has led to significant cash flow problems in the sector and an estimated £23.4 billion in current outstanding invoices owing to the UK’s 5.5 million small businesses.   The Payment and Cash Flow Review will consider the progress made in specific sectors of the economy in combatting late payment and will also include an in-depth examination of current payment reporting regulations and the Prompt Payment Code. Also within the scope of the review is the role of technology-enabled accountancy platforms in tackling late payments and promoting a better understanding of prompt payment measures within the small business community. EU Commission issues new proposals on corporate insolvency as part of Capital Markets Union initiative The European Commission this week put forward a series of proposals designed to further develop the EU’s Capital Markets Union initiative and break down barriers between the bloc’s financial markets. Amongst a suite of new proposals, the Commission is aiming to harmonise certain corporate insolvency rules across the EU with a view to making these more efficient and helping to promote cross-border investment. As part of the suggested changes, the Commission has proposed a simplified regime for microenterprises across the EU to lower the costs of winding them down and to enable the companies' owners to be discharged from debt, granting them a fresh start as entrepreneurs. Moreover, the Commission’s proposals also include measures to introduce ‘creditors' committees’ as part of the insolvency process to ensure a fair distribution of the recovered value amongst creditors as well as specific new rules designed to preserve the insolvency estate (i.e. avoiding actions by debtors that would reduce the value that creditors can get).

In this week’s public policy bulletin, we take a look at the latest economic update from the Parliamentary Budget Office as well as examining recent trends in the private rental sector as reported to the Joint Oireachtas Committee on Housing by the RTB this week. In addition, we review the Quarter 2 earnings and labour cost statistics from the CSO as well as assessing current levels of consumer confidence in Northern Ireland as set Danske Bank’s latest Consumer Confidence Index. Parliamentary Budget Office issued economic update post-Budget This week the Parliamentary Budget Office (PBO) issued its latest economic update providing an overview of recent economic trends seen in the Irish economy following the introduction of Budget 2023. Noting how inflation is currently at record levels with wages and retail sales falling in real terms (i.e. by adjusting for inflation), these factors “will act as a drag on the economy in 2023” despite the overall economic growth seen in 2022. Indeed, while noting that the economy is currently performing well, the PBO signalled that “clouds are on the horizon” as inflation, which was initially driven by high energy prices but now has spilled over to other items, continues to grow unabated. According to the report, 76 percent of the items in the CPI basket are now experiencing more than 2 percent inflation.  Joint Oireachtas Committee on Housing examines recent trends in the private rental sector with Residential Tenancies Board   On Tuesday members of the Joint Oireachtas Committee on Housing met with representatives from the Residential Tenancies Board (RTB) to discuss the findings of the RTB’s 2022 rental survey. While the results of the survey are yet to be published, RTB chairperson Tom Dunne nonetheless shared some interesting preliminary results arising from the survey. The 2022 results show that most small landlords (94 percent) are part time landlords that do not manage properties as their primary occupation with a quarter of small landlords surveyed stating that they are either likely or very likely to sell their rental properties in the next five years. In addition, the survey also found that many property owners, tenants, and agents alike found the regulatory framework and changing legislation around rental properties increasingly difficult to navigate and understand. Central Statistics Office issues Quarter 2 earnings and labour costs The Central Statistics Office (CSO) this week issued its Earnings and Labour Costs results in respect of quarters 2 and 3 2022. Preliminary estimates for Q3 2022 show average weekly earnings in the Republic were €864.32, an increase of 3.2 percent compared with €837.61 in Q3 2021. Meanwhile, average weekly earnings rose by 12.4 percent over three years from €769.14 in Q3 2019 (pre-COVID-19) to €864.32 in Q3 2022. Average hourly other labour costs increased by 60.7 percent across all economic sectors to €4.13 from €2.57 in Q3 2021. A significant factor in this increase was the ending of the Employment Wage Subsidy Scheme (EWSS) on 31 May 2022, explained Louise Egan, Statistician in the CSO’s Earnings Analysis Division.   According to the results, the sectors with the highest average hourly total labour costs were the Information & Communication sector (€49.51 per hour) followed by the Education sector (€43.24 per hour). Notably, the sectors with the highest job vacancy rate in Q3 2022 were Professional, Scientific & Technical Activities (3.8 percent), followed by the Financial, Insurance & Real Estate Activities (2.8 percent). Consumer confidence decreases in Northern Ireland According to a report issued this week by Danske Bank, consumer confidence in Northern Ireland decreased again in the third quarter of 2022 as higher prices continued to squeeze household finances. Over half of respondents (56 percent) believed their finances had deteriorated over the last year with 63 percent of respondents expecting their financial position to worsen over the next year reflecting a dampened optimism amongst consumers. In terms of the factors influencing these sentiments, 47 percent of those surveyed identified the overall impact of higher prices on their household incomes as being the most influential. By contrast, 13 percent of people pointed to global risks (such as the ongoing war in Ukraine) as impacting their sentiment while 11 percent of respondents highlighted concerns around post-Brexit trading arrangements as having the most bearing.

In this week’s Public Policy bulletin, we take a look at the latest economic assessments from both the Fiscal Advisory Council and Central Bank as well as the Government’s launch of the first ever National Hub Summit for remote working. In addition, we examine this week’s latest statistical releases from the Northern Ireland Statistics and Research Agency on 2021 business performance and levels of youth unemployment as well as a significant judgment from the Court of Justice of the EU on the validity of public beneficial ownership registers.  Fiscal Advisory Council publishes latest Fiscal Assessment Report  The Irish Fiscal Advisory Council (IFAC) this week published its latest Fiscal Assessment Report “A Budget in Time of Inflation” in which it assessed the Government’s Budget 2023 in terms of the broad fiscal stance, the economic and budgetary forecasts, and Ireland’s overall compliance with fiscal rules. Noting how Ireland’s economic growth had slowed considerably during 2022, the Council acknowledged that while Irish economic activity continues to expand in cash terms, inflation had weakened real incomes. With Budget 2023 now forecasting gross national income growth of just 0.4 percent in 2023, this marks a significant contraction from projected GNI growth of 5 percent this year, and actual growth 15 percent last year. Despite this however, IFAC’s report was broadly supportive of the Government’s budgetary strategy, observing how it struck the "appropriate balance between protecting vulnerable households and avoiding inflation". Central Bank increases capital buffer in response to global financial conditions In its second Financial Stability Review of 2022, the Central Bank this week announced an increase in the Countercyclical Capital Buffer (the level of reserves banks must keep) in response to the tightening of global financial conditions and what it sees as “increased downside risks given the size of the energy and inflation shock” in Ireland. Consistent with previous guidance, the Counter-Cyclical Capital Buffer rate will now increase to 1 percent marking a further step towards the gradual rebuilding of the buffer rate to 1.5 percent.   In addition, new rules for Irish property funds will also be introduced which will limit the amount of borrowed finance in these funds to 60 percent. Launch of National Hub Summit to promote and expand remote working in rural areas  Minister for Rural and Community Development, Heather Humphries TD, this week made a series of announcements in support of remote working as she launched the first ever National Hub Summit in Athlone.  The summit brought together businesses, hub managers, remote workers and and policy makers, less than 18 months after the launch of the Connected Hubs platform to further develop the Government’s expansion of its remote working initiative. The Connected Hubs online platform was originally launched by the Government in May 2021 to allow people to choose from a network of remote working hubs and hot desks around the country from which they could work. Speaking at the launch of the summit, Minister Humphries announced that a new pilot scheme that will match employers and employees to specific hubs will be launched in the New Year. The scheme will introduce the concept of ‘anchor tenants’ and the use of Connected Hubs as a ‘second workplace’ for staff. In addition, funding of up to €50,000 has been granted to all local authorities outside of Dublin so that they can market their towns and villages as destinations for people who want to move to rural Ireland. Moreover, the Minister signalled her intention to explore the idea of encouraging companies to provide a stipend to remote workers to cover the costs associated with using the Connected Hubs platform. More than 10,000 people will have registered with the Connected Hubs network by the end of the year. Northern Ireland Annual Business Inquiry Statistics 2021 released The Northern Ireland Statistics and Research Agency (NISRA) this week released headline results from its 2021 Northern Ireland Annual Business Inquiry survey. Outlining how the economy experienced “higher than usual growth” year on year between 2020 and 2021, the NISRA noted how the major economic impact of Covid-19 restrictions during 2020 should be borne in mind when assessing the 2021 figures. Some of the key findings reported include: Total aGVA was estimated to be worth £30.6 billion at basic prices in 2021 - representing a rise of 19.4 percent (£5.0 billion) compared to 2020. Turnover for NI businesses increased by 13.6 percent between 2020 and 2021 to £77.1 billion, while the cost of purchases of goods, services and energy increased by 10.5 percent to £48.7 billion over the same period. The key driver of aGVA growth was in the NI Non-Financial Services sector which increased by £1.8 billion (17.9 percent) between 2020 and 2021.  The majority of aGVA growth in this sector is attributable to the Transport and Storage section which increased by £581 million (39.4 percent). Retail and Wholesale trade within the Distribution sector recorded aGVA growth of £868 million (14.4 percent) over the period in question. aGVA in the Production sector increased by £1.1 billion (15.5 percent) from 2020 to 2021. The key driver in this was the Manufacturing section, which recorded aGVA growth of £891 million (18.2 percent). There was also an increase in aGVA in the Construction sector of £1.2 billion (47.5 percent) between 2020 and 2021. Northern Ireland Labour Force Survey – Young People Not in Education, Employment or Training (NEET) In its latest batch of statistics derived from its quarterly Labour Force Survey, the NISRA estimates that there were approximately 17,000 young people aged 16 to 24 years in Northern Ireland who were not in education, employment or training (NEET) in the period July to September 2022. This was equivalent of 8.8 percent of all those aged 16 to 24 years in NI. According to the survey, the NEET rate among males aged 16 to 24 was 8.3percent and among females was 9.2 percent in July to September 2022 while the number who were NEET increased from the previous quarter by 2,000 and decreased by 7,000 over the year. In July to September 2022 there were an estimated 11,000 young people aged 16 to 24 years who were not in education, employment or training and who were not looking for work and/or not available to start work (economically inactive). The remainder of those who were not in education, employment or training were looking for work in the previous four weeks and available to start within the next two weeks (unemployed).  Court of Justice of the EU rules public beneficial ownership registers ‘invalid’ In a significant judgment issued this week, the Court of Justice of the EU (CJEU) held that the provision of the anti-money-laundering directive whereby EU Member States must ensure that the information on the beneficial ownership of corporate and other legal entities incorporated within their territory is accessible in all cases to any member of the general public is invalid. According to the Court, the general public’s access to information on beneficial ownership constitutes a serious interference with the fundamental rights to respect for private life and to the protection of personal data as enshrined in Articles 7 and 8 of the EU Charter of Fundamental Rights. On foot of the judgment, both Luxembourg and the Netherlands on Wednesday closed their public beneficial ownership registers. The CJEU this week issued a press release on the content of its judgment. 

  In this week’s bulletin we bring you a final round-up from COP27, news of measures to address windfall gains in Ireland’s energy sector, a consultation on electricity storage, ISIF’s announcement of a €50m initiative to promote female-led investment firms and the fastest growing global ‘green jobs’. Also included is news from Northern Ireland’s Environmental Benchmark Survey, the UK Transition Plan Taskforce publication of its Disclosure Framework and Implementation guidance, and the usual articles, podcast and event recommendations. A round-up from COP27 - ‘A down-payment on climate justice’ The two-week long international climate summit concluded in Egypt on Sunday 20 November, with a final agreement, the ‘Sharm el-Sheikh Implementation Plan’ creating a loss and damage fund for countries vulnerable to the effects of climate change. Read a round-up of COP27 achievements here. Measures to address windfall gains in Ireland’s energy sector Measures are to be introduced to address windfall gains in the energy sector, it was announced this week. Through the implementation of Council Regulation (EU) 2022/1854, the Irish Government is to place a cap on all market revenues of non-gas electricity generators, with excess revenues collected and used to support electricity consumers. Proceeds from the cap on market revenues are expected to be collected in 2023, with proceeds from the temporary solidarity contribution to be collected in 2023 and 2024. Consultation on electricity storage policy for Ireland The Department of the Environment, Climate and Communications has opened a consultation to gather the views of interested parties to inform the development of an electricity storage policy for Ireland. The consultation is part of a suite of measures being undertaken by the Government to support the delivery of Ireland’s renewable energy targets and Ireland’s security of supply. Closing date for submissions is 5.30pm on Friday, 27 January 2023, and full details can be found here. ISIF announces €50m initiative to promote female-led investment firms The Ireland Strategic Investment Fund (ISIF), which is managed and controlled by the National Treasury Management Agency (NTMA), has announced its ambition to invest a minimum of €50 million over the next two years through private equity firms that are majority-owned by women. By establishing an ambition for investing in female-led investment opportunities, ISIF is seeking to demonstrate its commitment to addressing gender inequality and promoting greater diversity at senior levels – both within ISIF and in the companies and funds in which it invests. IFAC warns of need to properly cost climate change measures Ireland’s budgetary watchdog the Irish Fiscal Advisory Council (IFAC) has warned that the expected costs of climate change and other policy initiatives need to be properly costed and factored into long-term risks to public finance. The report, Fiscal Assessment Report, November 2022, which published this week, warns that reducing greenhouse gas emissions ­- urgently required to mitigate dangerous climate change - will potentially lead to sizeable costs which have not yet been determined. Irish Government’s funding programme for social inclusion, community energy, and social enterprise projects Minister for Community Development and Charities, Joe O’Brien, T.D., has announced over €44 million in 2013 for the Social Inclusion and Community Activity Programme (SICAP), which supports communities and individuals to engage with relevant stakeholders in identifying and addressing social exclusion and equality, developing the capacity of Local Community Groups and creating more sustainable communities.   Other funding announced included a new €10 million fund – the Community Support Fund – to support thousands of local community and voluntary groups with their energy bills, and up to €1.5 million in funding for 34 Social Enterprise projects nationwide under the Scaling Up Fund. Sustainability webinar from Chartered Accountants Ireland Ulster Society – 28 November   Chartered Accountants Ireland Ulster Society is holding a webinar on 28 November 12.30-2.00pm looking at 'The Sustainability Journey - Responsibilities, Strategy and Reporting'. The line-up of expert speakers include Keith Scott (NI Water), Derarca Dennis (EY), Shane O'Reilly (KPGM Sustainable Futures) and David Smith (Kilwaughter Minerals Ltd), who will address the issue of sustainability, how businesses are shaping a sustainability strategy, delivering operational change and meeting their reporting obligations. This webinar will provide a great overview of the challenge, and some first-hand case studies of businesses who are taking significant steps on the sustainability journey.    UK Transition Plan Taskforce publishes Disclosure Framework and Implementation guidance The UK’s Transition Plan Taskforce (TPT) has published its Disclosure Framework and accompanying Implementation Guidance, launching a ‘Sandbox’ for companies and financial institutions to test implementation. Launched by  HM Treasury in April 2022, the TPT has a two-year mandate to develop the gold standard for private sector climate transition plans in the UK. It will inform and build on international disclosure standards. The UK Government and the Financial Conduct Authority are actively involved and will draw on the TPT’s outputs to strengthen disclosure requirements across the UK economy. The Disclosure Framework and Implementation Guidance are open for public consultation until 28 February 2023. IPCC factsheets released Temperatures will rise in all European areas, alongside the frequency and intensity of hot extremes, including marine heatwaves, it was reported in factsheets produced by the Intergovernmental Panel on Climate Change (IPCC), the United Nations body for assessing the science related to climate change.  Other high-level key messages noted in the factsheet for Europe included sea-level rise in all European areas except the Baltic Sea, and an increase in the intensity and frequency of extreme sea-level events, leading to more coastal flooding. There are factsheets for regions and for specific sectors, from agriculture to water resources management.   Compliance manager fastest growing ‘green job’ LinkedIn Economic Graph has published a new report into the skills needed for the world’s economies to address the threat of climate change. The Global Green Skills Report 2022 provides new data on green skills and jobs from all across the world. Among the fastest growing green jobs identified between 2016 and 2021 is ‘Sustainability Manager’, which saw an annual growth of 30 percent, and ‘Compliance Manager’ which grew by 19 percent. From our colleagues in Professional Accounting EFRAG submitted first set of draft European Sustainability Reporting Standards (ESRS) to the European Commission. Accountancy Europe published some FAQs on key changes that Corporate Sustainability Reporting Directive (CSRD) will bring. The UK Financial Conduct Authority announced the formation of a group to develop a Code of Conduct for ESG data and ratings providers. The Association for Financial Markets in Europe (AFME) in collaboration with EY published ‘ESG and the Role of Compliance’ on how compliance functions can support firms managing regulatory ESG-related risks.  Resources Podcast: The Director General of the Environmental Protection Agency, Laura Burke, speaks to Daniel Murray (5 Degrees of Change) Tool: Climate TRACE Coalition is new independent inventory of greenhouse gas emissions. Launched at COP27, Trace combines satellite data and AI to show the facility-level carbon and methane emissions of over 70,000 sites around the world, including companies in China, the United States and India. Article: SustainabilityWorks – Scaling the Solution  Upcoming events Webinar - Chartered Accountants Ireland Ulster Society - The Sustainability Journey - Responsibilities, Strategy and Reporting' (28 November)   Biodiversity COP15 Part 2, 7-19 December You can find information, guidance and supports to understand sustainability and meet the challenges it presents in our online Sustainability Centre.  

Originally posted on Business Post 5 November 2022.  Conditions may be chaotic, but the outlook for the Irish exchequer is not necessarily bleak. We live in very strange times if a key determinant of economic success is whether or not the weather will be cold in Europe over the winter. Yet that is the unavoidable consequence of the illegal Russian invasion of Ukraine and the chaos it has created. Chaos is contagious, and dealing with it saps resources, but at least last week’s exchequer returns showed yet another bumper tax harvest in Ireland. It used to be the case that tax yields could be predicted fairly accurately by reference to GDP. If GDP increased, say by 5 per cent, then tax yields would also increase by about 5 per cent. This year at budget time, the GDP growth forecast was 10 per cent – but the tax yield growth forecast, at 19.2 per cent, is almost twice that. A few factors have put the sums askew in our favour. One is timing. A higher proportion of income tax and corporation tax gets collected in the last quarter of the year. Now that budget day routinely falls in October – and it was even earlier this year – predictions of the trend are more complicated. Another factor was the pandemic, which threw all forms of straightforward comparisons with previous years out the window. Thirdly, successive tax policies over the past ten years have narrowed the income tax base, meaning that fewer individuals pay the highest proportion of income tax. That makes calculating a reliable average tricky. As well as all this, we taxed our way out of the great recession mainly through higher Vat rates, but we have forgotten to reduce them. The standard Vat rate of 23 per cent in this country is among the highest in Europe, so a surge in price inflation also means a surge in Vat receipts. Corporation tax yields dominate the exchequer returns. Government never misses an opportunity to tell us how fragile that high yield might be, though there are good reasons for it. Many of the major companies established in Ireland are from the ICT or pharmaceutical sectors, which have shown extraordinary growth and profitability over the past several years. International corporate tax reforms since 2012 have restricted or eliminated opportunities for multinational corporates to locate profits in very low tax regimes, resulting in more tax being paid in this country. In some cases, capital allowances to encourage companies to establish here have expired, leaving more profits within the annual charge to corporation tax. So how might the current chaotic conditions really impact on government capacity to tax, and then spend? During the pandemic, those on higher wages were less likely to lose their jobs. However, this time there are clear signals that some jobs in the ICT sector are vulnerable. Twitter is letting staff go – as is Stripe, which has openly admitted it got it wrong on economic growth and cost management. There are also legitimate fears that some jobs in the lower-end services sectors and hospitality could go, as inflation, higher fuel bills and higher interest rates squeeze consumer spending. This month’s exchequer figures neither confirm nor challenge consumer spending trends, as Vat is paid every two months – and this wasn’t one of them. Despite this uncertainty, it does not automatically follow that the outlook for the Irish exchequer is bleak. International tax rules have not changed and are less likely to do so in an increasingly protectionist world. That is important for any small economy like Ireland’s that is dependent on foreign direct investment. Any disruption to our reliance for tax revenue on the corporate sector, high-income individuals or consumer spend will most likely be caused by poor domestic political decisions, rather than by outside influences. In a period of inflation, there tend to be greater opportunities for employment. It is counterintuitive, but there is an inverse relationship between inflation and the unemployment rate. Higher inflation leads to higher wages, leading to more attractive working conditions. This reality is borne out by a shortage of staff being felt across almost all sectors. It is not going to be easy to get through the current inflationary, fuel security and monetary crises, and it is right to highlight the risks that are not of our own making. But it is not right to identify these external risks without acknowledging that we would do most harm to ourselves with domestic policy mistakes. If we can improve our accommodation, health provision and migrant policy without recourse to increasing the national debt and without damaging confidence in the corporate and consumer sectors, we should be able to manage through the current chaos just fine. Dr Brian Keegan is Director of Public Policy at Chartered Accountants Ireland

  In this week’s Public Policy bulletin, read about the Irish Government’s introduction of the National Living Wage as well as the constitutional challenge upheld by the Supreme Court to the ratification of the EU-Canada Trade deal (CETA). We also take a look at the Fiscal Advisory Council’s assessment of the proposals of the Commission on Tax and Welfare as well as the latest Northern Ireland Labour Market Report and the European Commission’s Autumn 2022 Economic Forecast. Tánaiste announces introduction of National Living Wage Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar, this week announced the Government’s introduction of a national living wage for employees. The national living wage will be set at 60 percent of hourly median wages as recommended by the Low Pay Commission Report on the Living Wage.  Under the Government’s plans, the living wage will be introduced over a four-year period and will be in place by 2026, at which point it will replace the National Minimum Wage. The first step towards reaching a living wage will see the implementation of an 80c increase in the National Minimum Wage from 1 January 2023 to €11.30 per hour. This will be followed by gradual increases to the National Minimum Wage until it reaches 60 percent of hourly median earnings. By 2023, it is estimated that 60 percent of median earnings would equate to approximately €13.10 per hour. Supreme Court rules ratification of Comprehensive Economic Trade Agreement (CETA) between Ireland and Canada unconstitutional In a significant judgment, the Supreme Court last week ruled in favour of a constitutional challenge brought by Green Party TD Patrick Costello against the Government’s plans to ratify the EU–Canada Comprehensive Economic Trade Agreement (CETA). In a majority ruling of 4–3, the court held that the Constitution of Ireland precludes the government and the Dáil from ratifying CETA as Irish law now stands. Originally agreed between Canada and the EU in 2016, the CETA is primarily a trade treaty designed to significantly reduce tariffs and increase trade between the two parties. Having provisionally come into force in 2017, all EU national parliaments are required to ratify the deal before it can take full effect. In its current form, CETA tribunal awards are “in substance converted almost automatically into judgments enforceable in this State”, depriving the High Court of its capacity to supervise such awards and ensure they comply with the Constitution and EU law, Mr Justice Gerard Hogan said. However, as Justice Hogan went on to note ““this fundamental constitutional objection would accordingly be cured” if certain amendments to the Arbitration Act are effected by the Oireachtas. Following the judgment, the Government reaffirmed its commitment to ratify CETA in full after allowing a period of time to reflect on the implications of the court’s decision.    Read a copy of the Supreme Court’s judgment here. Fiscal Advisory Council estimates additional €15 billion in Exchequer Revenues could be generated if Commission on Taxation proposals implemented Following the issue of the Report of The Commission on Taxation and Welfare in September, the Irish Fiscal Advisory Council has this month advised that, if implemented, the proposals of the Commission would raise an additional €15 billion in Exchequer revenues. In an Analytical Note assessing the potential impact of the Commission’s proposals, the Council’s “broad brush estimates suggest an increase in total revenues of around 5.3% of Gross National Income”. However, while the report of the Council notes that the Commission’s net revenue-raising proposals “offer one potential strategy” to address the challenges the State currently faces, the Council expressly “does not take a view on whether or not this is the right approach”. The report of the Commission set out a strategy for raising Exchequer revenues and contained 116 recommendations to this effect which are currently under consideration by the Government. Latest Northern Ireland Labour Market Report published This week, the Northern Ireland Statistics and Research Agency (NISRA) published its most recent Labour Market Report. According to the report, the number of employees receiving pay through HMRC PAYE in NI in October 2022 was 781,300, a 0.2 percent increase over the month and a 2.5 percent increase over the year. Earnings from the HMRC PAYE indicated that NI employees had a median monthly pay of £1,967 in October 2022, an increase of £10 (0.5 percent) over the month and an increase of £117 (6.3 percent) over the year. In addition, the report noted that October 2022 saw the second consecutive monthly increase in the claimant count. The seasonally adjusted number of people on the claimant count was 36,100 (3.8 percent of the workforce) – marking an increase of 1.4 percent from the previous month’s revised figure and still higher than the pre-pandemic count in March 2020 (by 21.1 percent). As also set out in the report, the Department for the Economy recorded 60 redundancies in October – bringing the annual total number of redundancies to 940, the lowest twelve-month total in the time series (since 2000). European Commission’s Autumn 2022 Forecast Ireland's GDP is expected to grow by 7.9 percent in 2022, then to moderate to 3.2 percent in 2023 and 3.1 percent in 2024 on the back of lower purchasing power and uncertainty weighing on investment, according to the European Commission’s Autumn 2022 Economic Forecast. Net exports, particularly of multinational corporations, are however expected to remain resilient and be the main driver of growth. Inflation is expected to peak at 8.3 percent in 2022 and to remain high at 6.0 percent in 2023 before eventually moderating to 2.8 percent by 2024. While the Forecast projects that most Member States will enter into recession during the last quarter of the year (due to the ongoing uncertain economic environment) momentum accrued in 2021 together with strong growth in the first half of this year are set to lift real GDP growth in 2022 as a whole to 3.3 percent in the EU (3.2 percent in the euro area) - well above the 2.7 percent originally projected in the Commission’s Summer Interim Forecast. While the Commission predicts inflation will continue to contract economic activity into the first quarter of 2023, growth is expected to return to Europe in spring. Digital Services Act: EU’s landmark rules for online platforms enter into force This week saw the launch of the EU’s new set of rules for a safer and more accountable online environment as provided for in the Digital Services Act (DSA). The DSA applies to all digital services that connect consumers to goods, services, or content including online marketplaces. One of the key purposes of the DSA is to increase protections for consumers transacting online. Under the provisions of the Act, all online intermediaries will have to comply with wide-ranging new transparency obligations to increase accountability and oversight with a special regime applying to platforms with more than 45 million users. However, smaller platforms and start-ups across the EU will benefit from a reduced set of reporting obligations and special exemptions from certain rules. Following the entry into force of the DSA this week, online platforms will have until 17 February 2023 to report the number of active end users on their websites to the Commission. Read the Commission’s press release here.