News Archives - Page 3 of 356 - Pat Carroll PCCO - Chartered Accountants & Tax Advisors

Household energy bills are rising – get ready to switch

This time last year, energy prices were just starting to recover from the record lows reached in the weeks before.

Worldwide lockdowns at the onset of the pandemic saw international trade practically grinding to a halt.

Economists and analysts were predicting the most severe downturn since the Great Depression in the 1930s.

Oil prices in the US actually went negative for a time.

As a result, energy prices fell precipitously, but what a difference a year can make.

Oil prices are now back at their pre-pandemic levels – helped along by a few intermittent crises such as the Suez Canal blockage and a cyber-attack that saw a key oil pipeline in the US shutting down for over a week.

Coal and gas prices have also been rising.

In tandem with those moves, home energy providers have been hiking their prices with some moving more than once in recent months.

And with the introduction of smart metering and more people getting their properties insulated (and thus reducing the cost of running their homes), energy companies will be keen to capitalise where they can.

Shopping around is more important than ever.

What makes up the cost of an energy bill?

Almost half of the bill is made up of the fuel generation cost – in other words, the source of the energy.

Despite making great strides towards reducing our reliance on fossil fuels in recent years, around half of our electricity output is still generated from burning gas and up to 15% from burning other fuels like coal and oil.

So, the pricing structure is highly dependent on movements on the commodity markets, which, as already outlined, are all heading in one direction – upwards.

Daragh Cassidy, Head of Communications with the price comparison site, said consumers had been hit with a ‘triple whammy’ of events on this front.

“The lack of wind energy output over the past few months, the shutdown of some back-up power plants for maintenance, and the rise in the price of coal and gas on international markets are just some of the reasons for the increases,” he said.

On top of that, there are the costs associated with building and maintaining the networks to get the energy to our homes.

All the suppliers pay a tariff to the network operators which typically amounts to around a third of the household bill.

For electricity suppliers, there’s the PSO (public service obligation) levy, which is set every year by the Commission for Regulation of Utilities (CRU).

The levy for last year increased to €88.80 (including VAT) from €38.68 the previous year.

The money collected from the PSO levy is now used solely to support the renewable energy sector here.

For gas suppliers, there’s the carbon tax, which was hiked by €7.50 at the start of May to €33.50 per tonne of carbon dioxide.

The remainder of the bills are made up of taxes and the supplier’s overhead costs, as well as a margin for profit.

“Customers are getting a battering from increases in unit prices, increases in the PSO levy (or carbon taxes for gas) and increases in the standing charges,” according to Brendan Halpin, founder of WeSwitchU, a price comparison and switching service for energy customers.

To what extent are prices rising?

In the electricity market, most providers have announced, or already implemented, price hikes of between 4% and 18%.

Electric Ireland, the biggest supplier of electricity, has said it doesn’t intend to increase prices for the time being. However, it did increase its electricity prices by over 3% last October when many suppliers froze theirs.

In the gas market, only Bord Gáis Energy has held prices steady in the latest round with the remaining providers announcing increases of between 4.5% and almost 10%.

“Some of these increases are fairly hefty and will hit households hard,” Daragh Cassidy pointed out.

“Energy prices are notoriously volatile so there’s no guarantee households won’t be hit with further increases later in the year unfortunately.”

And indeed some have already moved again.

Both Panda Power and Flogas announced a second round of hikes effective from later this month.

In a statement, Flogas said the price rises were as a result of the significant and continuing increases in wholesale energy costs.

“April 2021 saw the highest wholesale electricity prices since the new Single Electricity Market commenced in October 2018,” the company said in a statement, adding that ‘higher than usual prices are likely to continue for some time’.

It’s worth noting that we already have the fourth highest electricity prices and the seventh highest gas prices in Europe.

So, where are the savings to be made?

Like other utility providers, energy companies rely on a degree of inertia from their customers – or, to put it another way, some misplaced loyalty.

Electricity and gas suppliers tend to offer attractive introductory rates to get customers onto their books, but they generally hike the costs significantly after those periods conclude so it pays for consumers to be nimble and act every 12 months to avoid paying costly bills.

“It’s what I call the tease and squeeze model,” Brendan Halpin said.

“The supplier will tease you with the discount which you lose after 12 months. The only way to save money is to switch every year and that’s where a lot of people fall into the trap. They switch on year one and then forget about it and then they’re back onto the standard rate.”

It’s estimated that about six in ten householders have remained with their suppliers over the past five years.

That’s about a million households that are paying standard, or elevated, unit rates for their gas and electricity.

According to the energy regulator, the average consumer who switches utility providers every year and pays discounted rates could see their annual energy bills falling by €400.

Depending on the size of the house and its BER (Building Energy Rating), the potential savings could be even greater.

If the savings are so significant, why don’t more people switch?

It is surprising that more people don’t switch, but perhaps the recent hikes will give householders pause for thought and focus minds on making savings.

Moving energy providers is probably the most straightforward of all the utilities and there’s plenty of choice with 13 different suppliers in the market.

“You get exactly the same product when using and paying for your energy, although the customer service will differ,” Eoin Clarke, Managing Director of price comparison site said.

“By paying more you are simply giving away more of your hard-earned cash than you need to.”

Brendan Halpin said a large proportion of consumers who do make the switch simply forget to do so again a year later.

“They don’t really see it because the bill comes every two months. There are often estimated readings, which was really a problem during the pandemic, but it’s something customers simply have to keep an eye on.”

WeSwitchU offers a service whereby they make the switch on behalf of consumers who have registered with them.

They find the most suitable plan for the consumer upon joining, they monitor the household energy usage over the 12-month period and then recommend the best plans to move to at the end of the year.

Needless to say, it is not a hugely popular service among the energy providers as the consumers are constantly moving, but for consumers the savings can be significant.

WeSwitchU operates by charging a percentage of the savings that consumers make.

Shouldn’t householders be trying to reduce energy consumption?

This is the ultimate aim.

By switching to renewable sources of energy and making homes more energy efficient, we’re helping to reduce the amount of carbon dioxide that’s being released into the atmosphere through energy generation.

And with the introduction of smart metering, householders are being rewarded for making more energy efficient choices.

Which means that providers will make up the difference by effectively penalising those householders who don’t.

Although there are very attractive grants and supports available to make homes more energy efficient, not everyone is in the position to make such an investment.

However, there are simple changes that people can make to reduce their energy consumption, such as blocking drafts through doors and letterboxes, turning off appliances at the plug, and bleeding the radiators.

“If you’re working from home, check if your employer will contribute towards your bills. If not, you may be eligible for tax relief,” Eoin Clarke suggests.

Should renewable sources not make energy cheaper?

This is what baffles a lot of people.

At a time when more wind and solar power plants are appearing on the landscape, why are energy prices not falling?

Wind and sun, after all, come free of charge.

The government intends to have 70% of Ireland’s electricity generated by renewable means by 2030, the bulk of it coming from wind and solar.

But that requires a significant investment in the infrastructure, the cost of which is estimated at between €500 million and €2 billion.

That will be funded through higher tariffs on providers, which will ultimately be recouped from the consumer though higher prices.

And then there’s the requirement for an alternative supply if nature doesn’t cooperate.

“The problem with renewables is that it’s intermittent. You always have to have a backup,” Brendan Halpin explains.

“If the wind doesn’t blow, you’ve to use a conventional power station. They’re mainly driven by gas. If the price of gas goes up, generating that electricity is going to cost more.”

In short, it doesn’t look as if energy prices are going to fall any time soon. In fact, they are likely to keep on rising.

The solution – aside from making some changes to reduce consumption – is to monitor the market and keep on switching.

Article Source – Household energy bills are rising – get ready to switch – RTE – Brian Finn

Copyright and Related Rights Act, 2000

G7 to discuss Covid economic challenges and climate

The first in-person meeting of the G7 countries since the start of the pandemic takes place in London today.

Minister for Finance Paschal Donohoe will attend the two-day meeting in his capacity as President of the Eurogroup – the collective term for informal meetings of the finance ministers of the eurozone.

He said ministers are set to “consider coordinated approaches to the key economic challenges facing economies emerging from the Covid crisis”, as well as “key global challenges, including climate and nature; health finance; and support for lower income countries”.

Speaking before the meeting, Mr Donohoe said: “There is now clear light at the end of the tunnel with the accelerating vaccination roll-out, falling infections and pressure on intensive care services gradually coming down.

“This year the euro area economy will rebound strongly. Our economic policies have been instrumental in facilitating this recovery and in shielding our citizens over the past year, maintaining jobs and putting our economies in a position to recover strongly.”

UK Chancellor of the Exchequer Rishi Sunak said he is aiming to secure a “fair deal” on digital taxation as he welcomed overseas ministers to London.

Ministers from the US, Japan, France, Canada, Germany and Italy will attend the two-day meeting at Lancaster House in London, ahead of the leaders’ summit in Cornwall next weekend.

They will discuss measures to tackle climate change as well as efforts to secure an international agreement on how digital companies are taxed.

Speaking ahead of the meeting, Mr Sunak said: “The G7 is a hugely important grouping and it’s an honour to be welcoming my counterparts to London with a renewed spirit of multilateral cooperation.

“Even before holding the G7 Presidency we’ve been clear on our priorities – protecting jobs, ensuring a green and global recovery and supporting the world’s most vulnerable countries.

“Securing a global agreement on digital taxation has also been a key priority this year – we want companies to pay the right amount of tax in the right place, and I hope we can reach a fair deal with our partners.

“I’m determined we work together and unite to tackle the world’s most pressing economic challenges – and I’m hugely optimistic that we will deliver some concrete outcomes this weekend.

“Together we can make a real change and help steer the international community through the next stage of our recovery.”

Article Source – G7 to discuss Covid economic challenges and climate – RTE

Copyright and Related Rights Act, 2000

Confidence among small business owners improving – SFA

Confidence among small business owners has notably improved, according to a new report from the Small Firms Association (SFA).

The latest Small Business Sentiment survey shows that over half of SFA members feel that the business environment is improving, compared with just 35% last summer.

“Despite the challenges faced by our small business community in early 2021, business owners and entrepreneurs are confident for summer 2021 and the second half of the year,” said Sven Spollen-Behrens, Director of SFA.

He said domestic economic growth continues to be identified as the primary driver of business opportunities this year.

“70% of respondents plan to invest in their business this year with business growth, IT and brand development identified as areas of priority,” he said.

Covid-19 restrictions in the first half of the year led to decreased working hours, the pausing or cancelling of planned recruitment and a temporary reduction in staff numbers.

However, despite these challenges, survey respondents said they expect wage rates to increase over the coming months.

“As we restart our economy and move towards recovery it is vital that we bring down unemployment and restore working hours,” Mr Spollen-Behrens said.

The survey shows that business owners are also looking for a delay in the introduction of a Statutory Sick Pay scheme.

With the vaccination roll out picking up pace, Mr Spollen-Behrens said he believes a return to normal trading in the second half of 2021 is now within grasp.

“The SFA will remain focused on working and supporting members, as they begin to welcome back customers and return to the office,” he said.

Article Source – Confidence among small business owners improving – SFA – RTE – Gill Stedman

Copyright and Related Rights Act, 2000

Euro zone business growth soared in May as restrictions eased – PMI

Euro zone business activity surged in May as the easing of some coronavirus related restrictions injected life into the bloc’s dominant services industry, a survey showed, echoing data today which showed factories had their best month on record.

An acceleration of vaccine programmes across the region and a fall in reported daily cases has allowed governments to remove some measures imposed to try and stop the spread of the virus.

That meant IHS Markit’s final composite Purchasing Managers’ Index (PMI), seen as a good gauge of economic health, jumped to 57.1 last month from April’s 53.8, its highest level since February 2018.

May’s final reading was ahead of a preliminary 56.9 indication and comfortably above the 50 mark separating growth from contraction.

An index covering the service industry soared to a near three-year high of 55.2 from 50.5, just beating the 55.1 flash estimate.

“The euro zone’s vast service sector sprang back into life in May, commencing a solid recovery that looks likely to be sustained throughout the summer,” said Chris Williamson, chief business economist at IHS Markit.

“Businesses reported the strongest surge in demand since the start of 2018 as COVID restrictions were eased and vaccine progress boosted confidence,” he added.

While the services new business index was the highest since early 2018 the overall composite new orders reading bounced to a near record 58.4 from 53.4 – its highest since June 2006 – as pent-up demand was released.

Manufacturing activity expanded at a record pace in May, a survey showed this week which suggested growth would have been even faster without supply bottlenecks that have led to an unprecedented rise in input costs.

The euro area was expected to emerge from a double-dip recession this quarter and expand 1.5%, a Reuters poll found earlier today.

Following a slow start, vaccination drives across the region have picked up pace and with restrictions being eased optimism about the year ahead increased. The services business expectations index rose to 71.2 from 68.4, its highest since January 2004.

“After Covid-19 fighting measures were tightened to the harshest for a year in April, restrictions eased considerably in May on average. These measures are on course to moderate further at least until the autumn, assuming further significant Covid waves are avoided,” Williamson said.

“This should facilitate the further return to more normal business conditions as the summer proceeds,” he added.

Article Source – Euro zone business growth soared in May as restrictions eased – PMI – RTE

Copyright and Related Rights Act, 2000

ESRI urges extra borrowing and a doubling of investment in housing

Ireland should borrow more to invest in housing and could borrow an additional €4bn to €7bn a year, according to a new analysis by the Economic and Social Research Institute.

It comes as the Covid-19 pandemic has forced the suspension of Europe’s fiscal rules on government borrowing and sparked a debate over how much countries can and should borrow.

In this context, the ESRI argued that Ireland’s projected growth rates and the borrowing costs it faces in the markets means the country could take on an additional €4bn-€7bn in debt a year.

It said the Government should consider doubling its current investment in housing, from €2bn to €4bn, which could deliver 18,000 units a year.

It said housing is one of the main reasons the cost of living is higher in Ireland than other countries and warned the country faces “another decade of inadequate housing supply” with upward pressure on prices and rents.

The ESRI cited recent research that the demand for housing here is approximately 35,000 units a year, based on population growth, and could be as high as 45,000 units a year.

It said Covid-19 delivered a further blow to supply, which was already behind demand before the pandemic.

Last year, 20,676 units were completed, according to the Central Statistics Office. Estimates vary for this year from between 15,000 to 21,000 units.

The ESRI warned the lack of housing supply here is “one of the biggest challenges to our competitiveness” and is the main reason the cost of living here is higher than in other countries.

It acknowledged that more activity in the housing sector could lead to “inflationary pressures more generally” and “capacity constraints in the domestic labour market” would have to be carefully considered.

It also said more housing would reduce the €1.4bn a year the State pays in rent through the Housing Assistance Payment (HAP) scheme.

It acknowledged there are other demands for expenditure on health and green technologies but warned that without significant investment in housing, the country faces another decade of inadequate housing supply with upward pressure on residential prices and rents.

Dr Kieran McQuinn, Research Professor at the ESRI, said it is clear that unless something “fairly significant happens” as far as the supply of housing is concerned, further high costs of housing are likely in the short to medium term.

Dr McQuinn said there is potential for “crowding in”, whereby increased Government investment in the economy could stimulate private sector investment.

Speaking on RTÉ’s Morning Ireland, he said that 35,000 housing units a year are needed to meet demand, but only around 15,000 to 20,000 units a year are currently being provided.

Any substantial increase must include a sizable proportion of social and affordable housing, he said.

Dr McQuinn warned that if the current imbalance continues, it will only result in greater inflationary pressures in house and rent prices.

Article Source – ESRI urges extra borrowing and a doubling of investment in housing – RTE – Robert Shortt

Copyright and Related Rights Act, 2000

ECB to keep policy loose this year despite high inflation risks

The European Central Bank will not change the total size of its asset purchase programme at its June 10 meeting but will start tapering its pandemic purchases later this year, according to a Reuters poll which also showed inflation risks to the upside.

With an economic recovery underway and price pressures rising, calls for winding down the emergency purchases have increased in recent weeks.

But several ECB members have said a decision to reduce purchases at the June 10 policy meeting was unlikely.

Nearly 90% of economists, or 34 of 39, in response to an additional question in the May 28-June 2 Reuters poll said the ECB would leave the €1.85 trillion worth of asset buys under its Pandemic Emergency Purchase Programme (PEPP) unchanged at its June meeting.

“As the recovery starts to gather speed, the ECB continues to walk a fine line between preserving favourable financial conditions and starting to unwind some of the emergency support measures unveiled during the pandemic,” said Angel Talavera, head of Europe economics at Oxford Economics.

“Given the still-fragile state of the economy, we think the ECB will maintain the level of asset purchases at its upcoming June policy meeting”.

Asked when the ECB would start tapering its asset purchases programme, a slim majority of economists, or 20 of 35, said sometime later this year, including 13 who expected a start as early as next quarter.

That was despite many ECB policymakers highlighting the risks of premature tightening.

Asked if the ECB would change the current end date of March 2022 for its PEPP, 28 of 39 economists said it would not.

And in response to another question, 31 of 36 said the risks to their inflation outlook over the next year were more to the upside than the downside.

Several ECB policymakers have said the central bank would look through higher inflation expectations for a while before they acted, viewing them as transitory.

The poll showed headline inflation would pick up sharply to average 1.8% this year.

Consumer prices rose 2% in May compared to a year earlier, according to a flash estimate, edging above the ECB’s target of just under 2% for the first time since 2018.

On a quarterly basis, inflation was expected to rise and averag 1.8%, 2.1% and 2.4% in Q2, Q3 and Q4 2021, respectively.

If the fourth quarter forecast is realised, it would be the highest average for any quarter since 2012.

But that rise was likely to be transitory, as inflation was then forecast to ease sharply to average around 1.4% in each quarter next year.

“The jump in euro zone inflation in May will not be the end of the upward trend,” said Andrew Kenningham, chief Europe economist at Capital Economics.

“However, most of the rise is due to temporary factors, including higher energy inflation, and we expect the headline rate to drop back to well below the ECB target next year,” he added.

The euro zone growth outlook was upgraded slightly, with the consensus pointing to 4.2% average growth this year and next, up from 4.1% for both the years predicted last month.

“With the increasing easing of coronavirus restrictions, economic and social life will resume in the coming weeks. We expect the economy to recover strongly once the lockdown ends, similar to the summer of 2020,” said Christoph Weil, senior economist at Commerzbank.

Article Source – ECB to keep policy loose this year despite high inflation risks – RTE

Copyright and Related Rights Act, 2000

Growth in services accelerates as restrictions are eased

Activity in the services sector expanded at the fastest pace in over five years in May, according to AIB.

Its latest Purchasing Managers’ Index, a month-on-month check-up on conditions in the sector, pointed to a marked pick up in growth as pent-up demand was released with the loosening of pandemic restrictions.

The services sector accounts for around three quarters of all jobs in the economy and covers areas as diverse as technology companies, airlines, banking and business services.

Employment growth strengthened in May and the 12-month outlook among survey participants was at its most optimistic in almost four years.

Employment rose sharply in the Technology, Media & Telecoms and Business Services subsectors.

Transport, Tourism & Leisure registered only a marginal increase in staffing while job levels were largely unchanged in Financial Services, the report noted.

However, the survey also picked up on the strongest cost pressures for nearly 13 years, driven by range of sources including labour, fuel, insurance, Brexit, energy and freight charges.

“Prices charged to customers increased at a more moderate pace, pointing to a continuing margin squeeze in the sector,” Oliver Mangan, chief economist with AIB said.

“Firms in all four sub-sectors, though, are very optimistic on the 12-month outlook, with the Future Activity index hitting its highest level since September 2017,” he added.

Composite PMI registers fastest growth on record

The surge in manufacturing and services activity in May saw the combined output of the sectors rising at the fastest rate since since the data series was first compiled in 2000.

Goods production increased at a record pace, while services activity expanded the most since March 2016, the report noted.

Input price inflation accelerated for the fifth successive month in May, reaching the highest since July 2008.

Manufacturers continued to see much steeper increases in input prices than service providers, the report stated, although the differential narrowed in the latest period.

Article Source – Growth in services accelerates as restrictions are eased – RTE – Brian Finn

Copyright and Related Rights Act, 2000

Hopes for tourism boost as hospitality sector reopens

Hotels, B&Bs, self-catering accommodation and hostels can reopen from today, as the gradual lifting of Covid-19 restrictions on the tourism and hospitality sector begins.

However, services including leisure facilities, as well as indoor restaurants and bars, are restricted to residents only.

Around 65,000 people were employed by hotels pre-pandemic, with 270,000 employed in the wider tourism industry.

Fáilte Ireland has estimated that the reopening of tourism and hospitality over the coming weeks will help inject an estimated €1bn extra into the economy over the next few months.

“There is now cause for cautious optimism as the roll-out of the vaccination programme gathers pace,” said Minister for Tourism Catherine Martin.

“The reopening of the tourism and hospitality sector represents a further important step in the Covid-19 Resilience and Recovery Plan.

“Accommodation and restaurants along with pubs and bars will be able to reopen their doors after this difficult period of enforced closure,” she said.

The minister added that she is acutely aware of the importance of international visitors.

The country will not begin reopening to non-essential visitors from overseas until 19 July.

Fáilte Ireland CEO Paul Kelly said: “The continued safe reopening of the tourism and hospitality sector in Ireland this week will provide a much needed boost to our national recovery.

“Our economic analysis states that domestic tourism experienced significant growth in 2020 when restrictions were lifted.”

Hoteliers say they face significant costs of approximately €964 per bedroom or €72,000 for an average 75-bedroom hotel to get reopened.

“This is a huge cashflow challenge for most hotels and guesthouses who have already experienced nothing short of a catastrophic financial shock from this pandemic with months of prolonged closure and partial reopening,” said Irish Hotels Federation (IHF) President Elaina Fitzgerald Kane.

“It is essential that reopening grants are put in place that reflect the true scale of the reopening costs whilst laying the building blocks for recovery and the restoration of employment.”

The IHF has also claimed that continued employment supports will be vital in helping hotels keep their teams together after the summer peak season is over.

Although hotels are allowed to provide indoor food and beverage services to residents from today, outdoor dining services for restaurants, cafes and pubs will only resume from Monday, with indoor dining in such venues not resuming until 5 July.

The Restaurants Association of Ireland has said that no scientific evidence has been provided by the Government explaining why hotels are being treated differently to restaurants, pubs and hotels and has threatened to take legal action over the issue.

Summer is ‘looking good’

Adrian Elliot of Glasson Glamping in Co Westmeath, said the summer is looking good and he has a significant amount of bookings.

Speaking on RTÉ’s Morning Ireland, Mr Elliot said the site caters for families and couples and that families in particular have been keen to book a holiday.

He said the pandemic has brought significant changes, but feels better prepared for this reopening compared to last year, and said individual cooking and toilet facilities were put in for guest accommodation, which helped a lot.

Mr Elliot said the business did not really benefit from Government grants or aid because it was only established in 2019 and had very little trading history, so has only received €2,000 in government supports so far.

Speaking on the same programme, Dick Ridge of Pod Umna Village B&B said staff are really excited to reopen.

He said they have used the time that the sector was closed to delve into what guests want and have increased the outdoor seating areas under canopy, so they can be comfortable whatever the weather.

Mr Ridge said there has been a steady flow of bookings since the site reopened for booking in April.

Article Source – Hopes for tourism boost as hospitality sector reopens – RTE – Will Goodbody

Copyright and Related Rights Act, 2000

Local Property Tax to apply to homes built since 2013

The Cabinet has agreed that owners of new homes built since 2013 will now have to pay Local Property Tax.

It follows a decision taken at a meeting to finalise the new €3.5 billion Economic Recovery Plan.

Taoiseach Micheál Martin, alongside Tánaiste Leo Varadkar and Green Party leader Eamon Ryan announced the Government’s plan, which lays out a road map for the economy as it emerges from the impact of Covid-19.

Another change to have been agreed by the Government will see about 33% of people who already pay property tax having their tax bill increased by around €100 every year.

It is estimated that around 3% of home owners will see a bigger increase.

Around 60% of property owners will see no increase.

Mr Martin said the majority of people will not be paying more property tax.

Speaking on RTÉ’s Six One, he said the objective of the plan, to be announced by Minister for Finance Paschal Donohoe tomorrow, will be fair and affordable.

He said that to continue putting off any recalibration of the tax would be more difficult when inflationary pressures were considered.

Tánaiste Leo Varadkar said Local Property Tax is used to fund local services such as social housing and estate maintenance.

“We’re going to do exactly what we said we would do in the Programme for Government. The 100,000 or so people who have been paying nothing because they bought a new house after 2013 will now have to pay something. I think that’s only fair, I think most people would agree with that,” he said.

“For people who’ve been paying up until now, we’re going to increase the bands and lower the rate and what that means is 60% of people will pay the same or less, 40% will pay more but in most cases that’s about €90 extra per year.”

He told RTÉ’s Prime Time that 100% of that money will stay in that community and that county.

Mr Varadkar said there would still be an equalisation fund for less well of counties but that would come from exchequer funding.

He said there are deferral options if people are unable to pay due to certain circumstances but “this is a tax on property” and a “tax on assets”.

“We have to be honest about this, we have borrowed 36 thousand million euro since the pandemic began. I stand over this, it was the right thing to do, we had to do it. It can’t go on forever,” he added.

Responding to a question on Sinn Féin’s opposition to the property tax, he said parties promising more spending and abolishing taxes at the same time were “charlatans”.

Sinn Féin’s housing spokesperson Eoin Ó Broin said the property tax should be abolished, rather than expanded to include new homes built since 2013.

He said the property tax was not progressive and there was a more equitable way to approach things.

Mr Ó Broin also called for a radical rethink by the Government on its housing strategy, saying the recent homelessness figures suggest that the lifting of the ban on rent increases is already indicating a negative impact.

Speaking on RTÉ’s News at One, Minister Donohoe said all homes will be reevaluated in November this year as part of changes to local property tax.

He said: “We are in a situation where the local property tax base has been broadly unchanged since 2013 and homes that were built since that point have not been paying local property tax.

“What we will do is we will have a new revaluation point in November of this year, so all homes will be valued at the same point in time.”

Mr Donohoe said the revaluation will be calculated “in such a way that recognises the affordability challenges that many families face at the moment”.

He said that local property tax changes will raise approximately €560 million compared to the current €480-490 million being raised.

“Most of that additional yield will be generated by new homes paying local property tax,” he added.

In other measures, the Pandemic Unemployment Payment (PUP) will continue at its current level until September, when gradual reductions will begin.

Mr Donohoe said that the PUP was brought in at the height of the public health emergency and is being extended to February, albeit at a lower rate, and by the time it is phased out, it will have been in effect for nearly two years.

He said “as things begin to change, we have to look at how we can begin to get our country back to work and how very carefully and gradually we can phase out and change programmes like this”.

The 9% VAT rate for the tourism sector will also remain until September 2022 as part of the plan.

The Government has said it will extend the main financial supports for firms hit hard by the pandemic, including wage subsidies, grants, tax debt warehousing and a commercial rates waiver.

The wage subsidy scheme, which is supporting some 300,000 jobs, will be extended until the end of the year and be available to any business whose turnover is down 30% or more compared with 2019.

Mr Donohoe added that the wage subsidy scheme’s extension would allow employers to hire people which will, in turn, lessen the numbers who are reliant on the PUP.

He said with the Employment Wage Subsidy Scheme, the extension of which he said is worth around €2.4 billion, they will be looking at some measures to allow employers to make a bigger contribution to that scheme in the final quarter of 2021.

New grants will also be available to firms whose turnover is still down by 75% on 2019 levels from September, it added.

A new additional business support scheme – the Business Resumption Support Scheme (BRSS) – will also be introduced for businesses with reduced turnover as a result of public health restrictions to be implemented in September 2021.

The Government also detailed today how it will spend its €915m portion of the EU’s €750 billion fund to help member states recover from the pandemic.

The money will be focused on the country’s green transition, including a low-cost loan scheme to retrofit homes and in retraining 100,000 people by 2025.

The Central Bank has estimated this many people could lose their jobs permanently due to the pandemic.

Article Source – Local Property Tax to apply to homes built since 2013 – RTE – Mícheál Lehane

Copyright and Related Rights Act, 2000

Govt to layout roadmap to economic recovery with plan announcement

The Government will unveil its Economic Recovery Plan later today, which is expected to lay out a roadmap for the economy as it emerges from the impact of Covid-19.

There will be many different aspects to today’s Recovery Plan.

Much attention will be focused on the detail of the planned withdrawal of the Pandemic Unemployment Payment (PUP) and wage subsidy schemes.

The PUP is expected to close to new entrants from next month and to reduce in instalments of €50 from September.

The wage subsidy scheme and commercial rates waiver are both expected to continue until at least September.

It is understood the cost of extending these schemes will be around €2bn.

Supports for small and medium sized companies get into the export market will be announced as well as 50,000 training places for digital and green jobs.

Details will also be given on projects to be funded through the EU’s Recovery and Resilience Fund, one of which will be a low cost loan scheme for retrofitting homes.

Yesterday, Minister for Rural and Community Development Heather Humphreys said the number of people claiming the Pandemic Unemployment Payment for the coming week has dropped to 309,000.

Ms Humphreys said the figure is now down approximately 100,000 since the economy began to partially reopen, and said it reflected the number of people who have gone back to work.

The minister said there would be more clarity on the phasing out of PUP payments when the Cabinet meets today.

She said it is not sustainable to keep payments up in the long-term, but stressed that there will be no “cliff edge” announcement.

Minister for Public Expenditure and Reform Michael McGrath has said that in announcing an overall economic plan today there is much to be confident about in Ireland’s post-pandemic recovery.

Speaking on RTÉ’s Morning Ireland, he said businesses are open and consumers are spending and the OECD is forecasting growth of over 4 per cent in the economy this year.

He said that the government intends to draw down €950m in EU grants for spending projects and reform initiatives between now and the end of 2022.

Minister McGrath said the Government has spent over €28bn across 2020 and 2021 in additional expenditure and this “was and remains appropriate”.

He said that €7.5bn has been spent on PUP supports and 6 billion euro on the wage subsidy scheme.

Mr McGrath said the Government will announce details today about the extension of supports to protect employment and help people to get back to work “so we can make choices to re-build the economy”.

He said the Government will announce an extension of the PUP beyond June, but a tapering off of the payments, which he said will move “in a careful and gradual way” to a more regular social welfare system.

He said that pandemic-related payments were introduced for a specific reason and the Government is cognisant of its the importance.

However, he said the payments are a significant cost to the State and that in relation to the many thousands of people who are on social welfare rates that are much lower than the PUP he said ‘we have to be fair to everyone’.

The minister said that it is necessary to strike “a fair and proportionate balance”.

He said the PUP has been, and continues to be, the right thing to do but that the Government wants to help people to return to work.

He said the number of people on the PUP is expected to fall significantly in the coming weeks as businesses reopen, with 25,000 to 30,000 people signing off from the payment each week.

He said the emphasis in today’s announcement is on a ‘Pathways to Work’ plan that focuses on upskilling, re-training and helping people to get back to work.

Sinn Féin spokesperson on Finance Pearse Doherty strongly criticised the plans and said there is “a moral obligation” to support those who are restricted from going back to work because of public health guidance.

Mr Doherty told Morning Ireland that the supports will be phased out naturally as people start to go back to work, and over 125,000 have gone back to work since reopenings began this year.

He said that by September not everyone can go back to work due to restrictions.

He said that workers in aviation, event management, hospitality and other sectors will still be restricted from going back to work and Government is saying “we are cutting your supports and forget about ‘we’re all in it together’.”

He said the Government has “pulled the rug from under these people” by reducing supports and has strayed from the principle of supporting those as long as there were barriers on a return to work due to public health guidelines.

Article Source – Govt to layout roadmap to economic recovery with plan announcement – RTE – Robert Shortt

Copyright and Related Rights Act, 2000