In the media

In his regular column in Sunday’s Business Post, Dr Keegan discusses the merits of the COVID-19 wage subsidy scheme as a commercial recompense for businesses adversely impacted by the government-mandated commercial shutdown. In his column in the Irish Examiner, Dr Keegan talks about how in the wake of the pandemic, new ways to manage the economy will be needed.

Apr 06, 2020
Public Policy

In this week’s bulletin, the impact of COVID-19 crisis on public finances was highlighted for the first time by the 2020 Q1 Exchequer Returns, published last week by the Department of Finance. In addition to this, the Central Bank of Ireland published its second Quarterly Bulletin of 2020, which described the COVID-19 economic shock is fundamentally different in nature and scope from anything previously witnessed. The impact of COVID-19 crisis on public finances was highlighted for the first time by the 2020 Q1 Exchequer Returns, published on Thursday 2 April 2020. Speaking at a press conference yesterday, Minister Paschal Donohoe predicted that tax revenues will decline steeply over the coming months and expenditure will rise, with the Government putting in place significant resources to help fight the spread of COVID-19. The resulting large fiscal deficit is expected to be somewhat cushioned by the economy’s position of relative strength – a budget surplus, cash reserves and significant progress in lowering the national debt. The Government will also be making these income supports available to a larger number of people on the live register in receipt of payments. This was confirmed by the Central Statistics Office (CSO) on 2 April 2020 to be over 500,000. Minister Donohoe expects these income supports will ‘cushion the economic shock’. In his address, the Minister stressed that the steep fall in economic activity is not due to imbalances such as credit growth; but is a casualty of the COVID-19 outbreak. He also added that the Government is working to ensure that there will be minimum reduction to productive capacity, so that firms and workers can resume economic activity as soon as possible. Key points: An Exchequer deficit of €2,535 million was recorded to end-March 2020. This compares to a deficit of €966 million in Q1 2019. Reported tax income was under €13 billion in Quarter 1 2020. Spending was€1.1 billion ahead of predictions – related to health and social protection Exchequer deficit of €2.5 billion reported in 2020, compared to surplus of €1.6 billion in 2019       End-March 2020 Difference Primary reason Exchequer Deficit €2.5 billion €1.6 million year-on-year deterioration Increases in voted current and capital expenditure Tax Receipts €3.7 billion 22.5% or €1 billion below the monthly target Steep decline in VAT receipts Tax Income €13.9 billion year-on-year growth of 1.1%, or €318 million Strong performances in January and February compensated for the March shortfall Total net expenditure €13.6 billion Increase of 13.5% or €1.6 billion on 2019; €959 million, or 7.6% ahead of profile COVID-19 related spending.     For more updates on COVD-19 please visit our COVID-19 Hub for latest news.   Central Bank describes the economic shock created by Covid-19 as fundamentally different in from anything previously witnessed. The Central Bank of Ireland yesterday published its second Quarterly Bulletin of 2020, which focused entirely on the impact of the Covid-19 pandemic. It described  the pandemic’s impact on the economy as a “severe economic shock, fundamentally different in nature and scope from types of shocks previously witnessed” and one which has resulted in the widespread shutdown of businesses and a rise in the numbers on the live register, with further job losses possible. Given the uncertainty of the situation, the Central Bank stated that it is not possible to produce a conventional forecast but is using judgement and analytical tools to estimate of the potential impact of the crisis. Under certain assumptions it predicts that GDP could decline by 8.3 per cent in 2020, that unemployment could rise to approximately 25 per cent in the second quarter if  all those receiving Covid-19 related payments are counted as unemployed, and could remain in double figures by year end The following action has been taken action to contain the economic effects of the pandemic and to protect consumers, households and businesses: 7.3 per cent of euro area GDP has been provided in the new Pandemic Emergency Purchase Programme of €750 billion until the end of the year The Central Bank has released the Countercyclical Capital Buffer from 1% to 0% which will further support households and businesses. The Single Supervisory Mechanism - of which the Central Bank is part - has announced that banks can temporarily use some of the supervisory capital buffers that they have built up in recent years. The Central Bank has also been working with financial services providers to help provide ‘breathing space’ for customers who find themselves in financial difficulty, through no fault of their own. Mark Cassidy, Director of Economics and Statistics, said: “[T]he near-term outlook for the economy is very unfavourable and … [t]he starting point for the recovery will depend on the depth and duration of the downturn, which is, as yet, unknown …  the hope is that forceful containment measures can shorten the period during which economic activity has come to a stop. When it emerges, the pace of recovery is likely to depend on factors such as the extent to which households and firms have been scarred by the downturn, the degree to which precautionary behaviour unwinds, the recovery in employment and incomes and, possibly also, the degree of stimulus in place to provide some impetus to recovery.” You can read more on the Central Bank’s COVID-19 Hub.     Read all our updates on our Public Policy web centre.

Apr 06, 2020
Public Policy

  In his regular column in Sunday’s Business Post, Dr Keegan discusses how the new emergency wage supports for business being run by the Revenue cover a range of self-employed individuals and their circumstances, and was designed keeping business preservation in mind.

Apr 03, 2020
Public Policy

In this week’s bulletin, the impact of COVID-19 crisis on public finances was highlighted for the first time by the 2020 Q1 Exchequer Returns, published yesterday by the Department of Finance. In addition to this, the Central Bank of Ireland published its second Quarterly Bulletin of 2020, which described the COVID-19 economic shock is fundamentally different in nature and scope from anything previously witnessed. Also, read our update on COVID-19 related work and travel restrictions and the list of essential service providers under new public health guidelines.   The impact of COVID-19 crisis on public finances was highlighted for the first time by the 2020 Q1 Exchequer Returns, published on Thursday 2 April 2020. Speaking at a press conference yesterday, Minister Paschal Donohoe predicted that tax revenues will decline steeply over the coming months and expenditure will rise, with the Government putting in place significant resources to help fight the spread of COVID-19. The resulting large fiscal deficit is expected to be somewhat cushioned by the economy’s position of relative strength – a budget surplus, cash reserves and significant progress in lowering the national debt. The Government will also be making these income supports available to a larger number of people on the live register in receipt of payments. This was confirmed by the Central Statistics Office (CSO) on 2 April 2020 to be over 500,000. Minister Donohoe expects these income supports will ‘cushion the economic shock’. In his address, the Minister stressed that the steep fall in economic activity is not due to imbalances such as credit growth; but is a casualty of the COVID-19 outbreak. He also added that the Government is working to ensure that there will be minimum reduction to productive capacity, so that firms and workers can resume economic activity as soon as possible. Key points: An Exchequer deficit of €2,535 million was recorded to end-March 2020. This compares to a deficit of €966 million in Q1 2019. Reported tax income was under €13 billion in Quarter 1 2020. Spending was €1.1 billion ahead of predictions – related to health and social protection Exchequer deficit of €2.5 billion reported in 2020, compared to surplus of €1.6 billion in 2019       End-March 2020 Difference Primary reason Exchequer Deficit €2.5 billion €1.6 million year-on-year deterioration Increases in voted current and capital expenditure Tax Receipts €3.7 billion 22.5% or €1 billion below the monthly target Steep decline in VAT receipts Tax Income €13.9 billion year-on-year growth of 1.1%, or €318 million Strong performances in January and February compensated for the March shortfall Total net expenditure €13.6 billion Increase of 13.5% or €1.6 billion on 2019; €959 million, or 7.6% ahead of profile COVID-19 related spending.     For more updates on COVD-19 please visit our COVID-19 Hub for latest news.   "Economic shock created by COVID-19 is fundamentally different from anything previously witnessed", says Central Bank The Central Bank of Ireland yesterday published its second Quarterly Bulletin of 2020, which focused entirely on the impact of the COVID-19 pandemic. It described  the pandemic’s impact on the economy as a “severe economic shock, fundamentally different in nature and scope from types of shocks previously witnessed” and one which has resulted in the widespread shutdown of businesses and a rise in the numbers on the live register, with further job losses possible. Given the uncertainty of the situation, the Central Bank stated that it is not possible to produce a conventional forecast but is using judgement and analytical tools to estimate of the potential impact of the crisis. Under certain assumptions it predicts that GDP could decline by 8.3 per cent in 2020, that unemployment could rise to approximately 25 per cent in the second quarter if  all those receiving COVID-19 related payments are counted as unemployed, and could remain in double figures by year end The following action has been taken action to contain the economic effects of the pandemic and to protect consumers, households and businesses: 7.3 per cent of euro area GDP has been provided in the new Pandemic Emergency Purchase Programme of €750 billion until the end of the year The Central Bank has released the Countercyclical Capital Buffer from 1 per cent to 0 per cent which will further support households and businesses. The Single Supervisory Mechanism - of which the Central Bank is part - has announced that banks can temporarily use some of the supervisory capital buffers that they have built up in recent years. The Central Bank has also been working with financial services providers to help provide ‘breathing space’ for customers who find themselves in financial difficulty, through no fault of their own. Mark Cassidy, Director of Economics and Statistics, said: “[T]he near-term outlook for the economy is very unfavourable and … [t]he starting point for the recovery will depend on the depth and duration of the downturn, which is, as yet, unknown …  the hope is that forceful containment measures can shorten the period during which economic activity has come to a stop. When it emerges, the pace of recovery is likely to depend on factors such as the extent to which households and firms have been scarred by the downturn, the degree to which precautionary behaviour unwinds, the recovery in employment and incomes and, possibly also, the degree of stimulus in place to provide some impetus to recovery.” You can read more on the Central Bank’s COVID-19 Hub.   List of essential service providers under new public health guidelines: Update on work and travel restrictions The Government of Ireland has imposed far reaching restrictions on work and travel to as part or measures to restrict the spread of COVID-19. Members in the Republic of Ireland should read and familiarise themselves with government announcements regarding the measures. A list of essential services was published by the Department of the Taoiseach on 28 March, which includes references to accountancy, payroll and payment, and data processing services. Read more for our recommendations for members.   Accordingly, we are recommending to members where possible; In the first instance, members should note that that they, and where relevant their employees, must work from home if at all possible.   Members in an employer or practitioner capacity should consider whether some or all of their business or practice cannot be conducted from home and is considered essential under the guidelines below. In this case, then where possible, members should compartmentalise the operations of the business or practice between those parts which should be operated from home, those which should be discontinued, and those parts which should remain open because they are an essential service. We would appeal to all our members to respect the spirit of the measures which is to limit travel and work contacts to the absolute minimum.   The guidelines include a grace period until 6pm on 30 March 2020 for the necessary arrangements to be made. Therefore, members in an employer capacity should ensure that they communicate promptly with all employees regarding their decision and policies regarding opening of the business and remote working. Administrative requirements such as the provision of letters to employees should be attended to by the end of the grace period, and guidance is given in the attached link.   This is a rapidly evolving situation and further guidance may be issued by the Government over the coming days. Important links: New Public Health Measures effective now to prevent further spread of COVID-19 (28 March 2020) https://www.gov.ie/en/publication/cf9b0d-new-public-health-measures-effective-now-to-prevent-further-spread-o/ List of essential service providers under new public health guidelines (28 March 2020), which includes references to accountancy, payroll and payment and data processing services https://www.gov.ie/en/publication/dfeb8f-list-of-essential-service-providers-under-new-public-health-guidelin/

Apr 03, 2020
Public Policy

In this week’s Public Policy Bulletin, read our update on work and travel restrictions and the list of essential service providers under new public health guidelines. You can also read the ESRI’s commentary on a possible recession in the Irish economy due to COVID-19.   List of essential service providers under new public health guidelines: Update on work and travel restrictions   The Government of Ireland has imposed far reaching restrictions on work and travel to as part or measures to restrict the spread of COVID-19. Members in the Republic of Ireland should read and familiarise themselves with government announcements regarding the measures. A list of essential services was published by the Department of the Taoiseach on 28 March, which includes references to accountancy, payroll and payment, and data processing services. Read more for our recommendations for members.   Accordingly, we are recommending to members where possible;   In the first instance, members should note that that they, and where relevant their employees, must work from home if at all possible.   Members in an employer or practitioner capacity should consider whether some or all of their business or practice cannot be conducted from home and is considered essential under the guidelines below. In this case, then where possible, members should compartmentalise the operations of the business or practice between those parts which should be operated from home, those which should be discontinued, and those parts which should remain open because they are an essential service. We would appeal to all our members to respect the spirit of the measures which is to limit travel and work contacts to the absolute minimum.   The guidelines include a grace period until 6pm on 30 March 2020 for the necessary arrangements to be made. Therefore, members in an employer capacity should ensure that they communicate promptly with all employees regarding their decision and policies regarding opening of the business and remote working. Administrative requirements such as the provision of letters to employees should be attended to by the end of the grace period, and guidance is given in the attached link.   This is a rapidly evolving situation and further guidance may be issued by the Government over the coming days. Important links: New Public Health Measures effective now to prevent further spread of COVID-19 (28 March 2020) https://www.gov.ie/en/publication/cf9b0d-new-public-health-measures-effective-now-to-prevent-further-spread-o/     List of essential service providers under new public health guidelines (28 March 2020), which includes references to accountancy, payroll and payment and data processing services https://www.gov.ie/en/publication/dfeb8f-list-of-essential-service-providers-under-new-public-health-guidelin/       Irish economy to contract by 7.1 per cent, warns ESRI In their Quarterly Economic Commentary, the independent research think-tank, Economic and Social Research Institute (ESRI) have said that the Irish economy would potentially register a recession this year with output contracting by over 7 per cent. This prediction assumes that the current restrictions on economic life will remain in place over a period of 12 weeks. Under such a scenario, this constitutes a significant reversal of the pre COVID-19 related economic trends. The scenario analysis outlines a significant increase in Ireland’s unemployment rate from 4.8 per cent in February to 18 per cent in Q2 2020 before falling back to just under 11 per cent by the end of the year. The combination of the extra expenditure on health and social welfare allied to the sharp decline in certain taxation revenues means a deficit of nearly 4.5 per cent is now likely to occur in 2020 and could be higher. The commentary also analyses the impact on household demand, the trade sector, investment, the labour market and public finances. It is predicted that consumption, investment and net trade would all fall sharply as households cut spending, firms cancel or postpone investment and external demand for Irish goods and services fall. However, their key working assumption is that the majority of the economic impacts of COVID-19 occur in Quarter 2 of the present year. By Quarter 3 and into Quarter 4, economic activity both domestically and internationally is assumed to return to normal If this does not occur then the results will be even more adverse for the domestic economy, according to the ERSI.     Read all our updates on our Public Policy web centre.    

Mar 27, 2020
Public Policy

Updated on 31 March 2020 The COVID-19 crisis is presenting immediate and severe financial challenges for businesses. Here are some practical steps, supports and guidance made available by the Department of Business, Enterprise and Innovation: Talk to your bank on provision of additional supports such as payment holidays or emergency working capital facilities, and take immediate steps to manage your cashflows  Use available government supports for working capital The SME Credit Guarantee Scheme supports loans up to €1 million for periods of up to 7 years. Applications can be made to AIB, Bank of Ireland and Ulster Bank. Microenterprises can access COVID-19 loans of up to €50,000 from MicroFinance Ireland. The terms include a six months interest free and repayment free moratorium, with the loan to then be repaid over the remaining 30 months of the 36-month loan period. Loans are available at an interest rate of between 6.8% and 7.8%. Businesses can apply through their Local Enterprise Office or directly at microfinanceireland.ie. The €200m SBCI COVID-19 Working Capital Scheme for eligible businesses supports loans from €25,000 up to €1.5 million (first €500,000 unsecured) with a maximum interest rate of 4%. Applications can be made through the SBCI website at sbci.gov.ie. A €200m Package for Enterprise Supports including a Rescue and Restructuring Scheme is available through Enterprise Ireland for vulnerable but viable firms that need to restructure or transform their business. A new Business Continuity Voucher, available through Local Enterprise Offices, designed for businesses across every sector that employ up to 50 people. The voucher is worth up to €2,500 in third party consultancy costs and can be used by companies and sole traders to develop short-term and long-term strategies to respond to the COVID-19 pandemic. Apply here    Check your insurance cover Check if your insurance policy covers you for an interruption in your business, or a temporary business closure, caused by COVID-19.  Business Continuity Planning: COVID-19 Checklist Take a look at the Department’s Business Continuity Planning Checklist in response to COVID-19.  Essential Retail Outlets A list of essential retail outlets has been published by the National Public Health Emergency Team (NPHET).  Posters and signs for your premises The Department of Health has developed public health information posters and social distancing graphics to display on your premises. Public health advice posters Physical distancing graphics HSE posters and resources  You can also use the Department’s established Business Support Call Centre for information on the government supports available to businesses and enterprises affected by COVID-19. Tel: +353 1 631 2002 Email: infobusinesssupport@dbei.gov.ie  

Mar 26, 2020
Public Policy

  In this week’s Public Policy bulletin, read about how CCAB-I is the fifth most active group lobbying on behalf of its members’ interest in Ireland. Also, read about the EU’s new country-by-country reports.   CCAB-I identified as fifth most active lobbying group in Ireland The Second Statutory Review of the Regulation of Lobbying Act 2015 published on 25 February. The review of the Act, described as providing transparency on ‘who is lobbying whom about what’, was seen as an opportunity to take stock of its impact, to see how it is working in practice and to see what issues and challenges it presents. According to the Register of Lobbying, the Consultative Committee of Accounting Bodies Ireland (CCAB-I) was in the top five organisations in Ireland with the greatest amount of lobbying activity. This was from a total of more than 40,000 returns which had been submitted to as at 21 January 2020 from over 1,900 persons and organisations registered on the Register. The top ten policy areas cited in returns include economic development and industry, coming second after health, and taxation and EU Affairs coming ninth and tenth place respectively.   Employment skills key to Ireland’s sustainable and inclusive growth The EU Commission has published its country reports focussing on Member States’ environmental sustainability, productivity gains, fairness and macroeconomic stability. For the first time, the reports assess Member States’ progress towards the United Nations Sustainable Development Goals (SDGs). Ireland’s country report identifies, among other things, closing employment related skill gaps and encouraging key social, environmental and productive investment to provide the foundations for sustainable and inclusive growth.

Feb 28, 2020
Public Policy

The 33rd Dáil convened for the first-time last week, as 48 new TDs and 112 returning TDs took their seats. Other news in this Public Policy Bulletin includes the new UK points-based immigration system and what it will mean for workers in the future.   33rd Dáil convenes as parties put in nominations for next Taoiseach The 33rd Dáil, comprising 160 elected TDs, convened for the first time on 20 February 2020, since the General Election 2020 wrapped up. The day saw 48 TDs taking their seat for the first time and the rest returning to fulfil their duties as Deputies. With Seán Ó Fearghaíl re-elected as the Ceann Comhairle (chairperson) of Dáil Éireann, parties also put in their individual nominations for the next Taoiseach. The sitting was followed by Leo Varadkar’s visit to the Arás to tender his resignation as Taoiseach, but he has announced that he will continue in a caretaker role until the next government is formed. The Dáil is now adjourned for two weeks until 5 March 2020. New UK points-based immigration system announced The UK Government has released a new points-based immigration system which will regulate the flow of workers into the UK and replace existing rules from 1 January 2021, when the country will no longer be subject to European Union regulations.   The new points-based immigration system will award points for specific skills, professions, salaries or qualifications/attributes, and visas will be awarded to those who gain sufficient points. The UK Government has also said that the new system will not include a visa option for low-skilled migrant workers, but that it will make it easier for higher-skilled workers to get UK visas. Their released Policy Statement says that “employers will need to adjust” to this change, and the overall aim is to end free movement within the EU and introduce an Immigration Bill to implement the points-based system. The Policy Statement also outlines the salary threshold for skilled migrants, which will be lowered from £30,000 to £25,600 for those coming to the UK with a job offer. The announcement of the system was accompanied by warnings from various advisory groups on the adverse effects it was likely to have on the economy, particularly on sectors such as care, construction and hospitality. UK Prime Minister Boris Johnson has also said the Common Travel Area between the UK and Ireland will not be affected post-Brexit. Marathon EU Budget negotiations end in stand-still EU leaders reconvened last week to continue negotiations on setting their seven-year budget from 2021-2027, however the two-day marathon negotiations ended in a standstill. Following the UK’s departure from the EU as a Member State, the EU-27 were faced with the challenge to plug a €75bn hole in the forthcoming seven-year budget. With Ireland’s priorities lying in maintaining farm spending at current levels, the current proposals under the Common Agricultural Policy to make cuts of up to €53bn are a concern. You can find more information on how the EU budget works on the European Commission’s dedicated website.   You can also view all updates on our Public Policy web centre.  

Feb 21, 2020
Public Policy

After two days of jampacked vote counting and three-and-a-half weeks of busy campaigning, the 160 seats in the 33rd Dáil are finally filled. A three-way majority deadlock has emerged between Fianna Fáil (38 seats), Sinn Féin (37 seats) and Fine Gael (35 seats), there is no clear winner in terms of the majority in the Dáil. With talks of a potential coalition on the horizon, read our election update for a quick look at the results and what’s next.     The demographics With over 3.4 million citizens eligible to vote in the General Election 2020, the election saw a voter turnout of 62.9 per cent to vote for 515 candidates running in 39 constituencies. As each constituency has a specific number of seats that need to be filled, those seats will make up the 33rd Dáil. Ultimately, a party needs to win 80 seats to achieve the majority. The number of Dáil members is not fixed, but the Constitution provides that there must be at least one TD for every 20,000 to 30,000 people in Ireland. There were 158 TDs in the 32nd Dáil, and there will be 160 TDs in the 33rd Dáil.   The result   After two days of jampacked vote counting and three-and-a-half weeks of busy campaigning, the 160 seats in the 33rd Dáil are finally full, and the General Election 2020 has concluded (for now). With a three-way deadlock emerging between the biggest contenders, Fianna Fáil (38 seats), Sinn Féin (37 seats) and Fine Gael (35 seats), there is no clear winner in terms of the majority in the Dáil. However, a historic election in many ways, the change in peoples’ opinions has been highlighted by their voting pattern. The smaller parties have also seen a remarkable resurgence in terms of support, with the Green Party coming out with 12 seats and Social Democrats winning 6 seats. With all 160/160 seats filled, we’ve provided readers with a summary of the current seat allocation, and the change in first preference votes since the last General Election held in 2016.    Political Party No. of seats in GE 2020 % of 1st Preference Vote (39/39 1st counts)in GE 2020 % Share - Change since GE 2016 Fine Gael 35 20.9 -4.7 FiannaFáil 38 22.2 -2.2 SinnFéin 37 24.5 +10.7 Labour 6 4.4 -2.2 Green Party 12 7.1 +4.4 Social Democrats 6 2.9 -0.1 Independent 19 12.2 -3.5 Table 1: Figures taken from RTÉ    What issues influenced the voters?  According to an exit poll conducted by Ipsos/MRBI, party policies and opinions on issues of Health (32 per cent) and Housing/Homelessness (26 per cent) were the top deciding factors for the many people voting. Following shortly behind were Pension Age (8 per cent), Climate Change and Jobs (6 per cent each), and Taxation (4 per cent). With the poll result based on the responses of more than 5,000 people at 250 polling stations across the country immediately after they voted, the exit poll suggests that only one per cent of respondents were concerned about the issue of Brexit.       What’s next?   With all parties nowhere near the coveted 80 seats needed to secure a Dáil majority, we may see the larger parties considering potential coalition options with their smaller counterparts. With talks currently underway between party leaders, the process to get a Government in place is ongoing.     Where can I see updates?    You can view live updates on developments in the elections in real time on the RTE Election 2020 page. You can also read all our updates on our Public Policy web centre.    

Feb 14, 2020