News Archives - Page 7 of 300 - Pat Carroll PCCO - Chartered Accountants & Tax Advisors

Residential property sales at lowest level since 2017

The residential property market is now at its lowest level for a first quarter since 2017, while sales in six counties in Leinster down by at least 6% compared with the same time last year, a new study shows. 

The study, based on an analysis of residential property sales recorded in the Property Price Register, was carried out by property website MyHome.ie.

It shows that the number of sales nationwide was down by 4.6% to 11,161 in the first quarter of 2020 compared to 11,702 sales the same quarter the year before. 

MyHome.is said these figures are the lowest since the first quarter of 2017, when 11,053 units were sold.

The analysis also shows mixed results in urban centres. It noted a fall in activity in Dublin, with the number of sales in the capital dipping by 7.2% to 3,482 sales compared to 3,751 sales last year.

Sales were also much lower in Wexford (down 17.8%), Louth (down 12.3%), Kilkenny (down 15.2%) and Kildare (down 16%). 

But Limerick sales rose by 7.2% to 434 sales in the first quater of 2020 compared to 405 sales in the same time last year, while Monaghan sales jumped 28.6% and Westmeath sales were up 13.4%

13 counties reported a fall in sales figures, eight counties experienced rises and five counties (Galway, Kerry, Mayo, Offaly and Waterford) were flat.

Dublin, which makes up almost a third of sales in the property market here, recorded 3,482 sales in the first three months of 2020. 

It was followed by Cork with 1,267 sales, and Kildare with 567. The counties with the lowest number of sales were Leitrim with 89 sales, Monaghan on 90, and Longford on 91.

Angela Keegan, Managing Director of MyHome.ie, said that Covid-19 had negated any potential bounce-back in activity following the Brexit uncertainty of last year.

But Ms Keegan welcomed the fact that construction work would be resuming soon. 

“Brexit uncertainty had a significant effect on sales activity in late 2019, something which was apparent into the new year. This was compounded by Covid-19 at the start of March, just when we thought we would see an increase in sales,” she said. 

The Government’s roadmap for the easing of Covid-19 restrictions states that construction workers can resume work from May 18. 

“This clarity is welcome as the longer we wait for construction to resume, the greater the fall-off in new homes will be which is something the market can ill-afford at present,” Ms Keegan said.

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More than 427,000 workers now on wage subsidy scheme

More than 427,000 workers are now having their wages subsidised by the Government under the Temporary Wage Subsidy Scheme, according to the latest figures published by the Revenue Commissioners. 

More than 50,900 employers have registered for the TWSS with the Revenue Commissioners, who administer the scheme. Of those, 43,000 have already received subsidy payments. 

In total, the Government has paid out €712m under the scheme, including €61m in income tax refunds due during the same period.

Today alone, the Revenue Commissioners have generated payments worth over €60m.

The TWSS was commenced on 26 March and is scheduled to continue for 12 weeks to support firms during the Covid-19 emergency.

Its aim is to maintain the link between employers and employees, which it is hoped will make it easier and quicker to reboot firms when the emergency ends.

The wholesale and retail trade sector topped the TWSS subsidy claims league, accounting for 20.1% of employers, and 24.6% of eligible employees.

Construction businesses represented 16% of claimants, and 10.6% of subsidised workers. 

Accommodation and food services employers comprised 7.6% of TWSS applicants, accounting for 10.3% of the eligible employees. 

Dublin city and county between them account for over 32% of employers registering for the scheme, and for 43% of subsidised employees.

It said 59% of subsidised workers are male, while 41% are female.

Almost half of companies availing of the TWSS are claiming for fewer than five employees, with 25.1% receiving it in respect of three to five employees, and 24.4% claiming for one or two employees.

The figures show 16.5% of employers are claiming for six to nine employees, while a further 15.7% of employers are claiming for ten to 19 workers. 

However, firms with more than 100 employees eligible for the scheme account for over 28% of subsidised workers.

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Manufacturing collapses in April due to Covid-19 – PMI

Manufacturing in Ireland is going through record falls in output and employment, according to a new survey. 

The AIB Manufacturing Purchasing Managers Index shows that in April output, new orders, exports and purchasing all fell at the fastest rates ever recorded. 

The survey also found that it is taking longer for suppliers to deliver raw materials and parts, due to delays and disruption caused by the lockdown. 

According to AIB’s chief economist Oliver Mangan, almost 70% of firms reported a decline in production.

Almost two thirds of companies reported a decline in new orders, with a ‘particularly sharp decline’ in export orders. 40% of firms cut staff numbers. 

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Carbon tax increase kicks in today

Households face increases in their energy bills from today as the hike in the carbon tax kicks in.

The tax was raised by €6 to €26 per tonne of carbon dioxide in last year’s budget. 

However, the increase was postponed until today on home heating fuels such as coal, peat, natural gas and home heating oil.

The comparison website, bonkers.ie, calculates that the increase will add around €60 to the average household’s natural gas bill.

It will add €2.73 to a 40kg bag of coal, 59 cent to a bale of briquettes and €65 to every fill of a 900-litre home heating oil tank.

“With all that’s going on right now due to Covid-19 and with hundreds of thousands of people having been laid off, this government tax increase couldn’t have come at a worse time,” Daragh Cassidy, Head of Communications at bonkers.ie said.

“And although energy suppliers have announced reductions in the price of gas recently on the back of falling wholesale prices, this increase in the carbon tax will reverse some of those savings.”

The tax added around 6.5 cent to every litre of petrol and diesel from the time of its introduction in the budget last October.

The carbon tax does not apply to electricity, where a public service obligation (PSO) levy is applied instead.

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EU sets out ‘quick fixes’ to boost bank lending during pandemic

Banks should rein in bonuses to boost their capacity to help businesses and households hit by the coronavirus crisis, the European Union’s executive said today. 

The European Commission set out a fresh package of temporary “quick fixes” offering capital relief that would support extra lending potentially worth up to €450 billion to companies struggling as a deep recession looms. 

“During the last crisis we had to prop up banks, this time we are helping banks to prop up households and companies,” the EU’s financial services chief Valdis Dombrovskis said

The easing of capital and accounting rules will be temporary, and the package needs to be approved by EU states and the European Parliament by June at the latest to have the full effect, he said. 

The EU executive backed statements from regulators that banks should refrain from paying dividends or making share buybacks at a time they are getting capital relief. 

“For the banks, moderating the amount of bonuses paid out to senior management and high earners in these challenging times is also a way to express solidarity with those affected by the outbreak of Covid-19,” the Commission said. 

Banks like UniCredit and Deutsche Bank have begun reporting rising provisions for bad loans as a deep recession beckons after national lockdowns to fight the pandemic. 

Today’s package offers flexibility in how provisions are calculated and to delay their eventual hit to a bank’s capital buffer to avoid lending turning into a trickle in the face of mounting bad loans caused by the pandemic. 

Delays to repayments should not automatically lead to a harsher accounting treatment of the respective loans, the Commission said. 

An EU official estimated that euro zone banks could face an extra 100 billion euros in provisioning for loans in 2020, but the capital relief set out today means they will still be able to support extra lending worth up to €450 billion.

The European Commission also proposed giving banks more leeway in how they calculate a capital measure known as the leverage ratio, brought forward easier capital treatment of lending to small companies, and accelerated a rule that allows banks not to deduct the value of software from capital.

“These adjustments to the prudential framework would facilitate collective efforts aimed at mitigating the impact of the pandemic and thus moving towards a fast recovery,” the Commission said. 

In previous measures, EU regulators said banks could draw on some of their capital buffers to keep credit flowing to the economy, though some of the initiatives announced today fall short of similar proposals made by US regulators.

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S&P revises outlook for Irish banks downwards

Ratings agency S&P Global Ratings has revised down its outlook for three of the main Irish banks from stable to negative, saying that downside risks for the banks’ financial profiles remain substantial.

However, the agency has affirmed the current ratings of AIB, Bank of Ireland, Permanent TSB and KBC Bank Ireland.

It has also not changed the outlook for KBC because it thinks its parent group will be willing and able to provide both ongoing and extraordinary support over the next 18-24 months.

The agency said European economies, including ours, face an unprecedented economic challenge due to the global slowdown in activity and trade, despite efforts by governments to contain the coronavirus pandemic.

“We continue to expect Ireland’s wide-ranging fiscal and related monetary measures to substantially mitigate this extraordinarily sharp, cyclical shock to the economy, and so also support the banking system in its key role as a conduit of fiscal and monetary support,” the S&P said.

But it added that even under its base case of an economic recovery starting in the third-quarter of this year, its expectation is that the banks’ earnings, asset quality, and in some cases, capitalisation will weaken meaningfully during the remainder of this year and into next.

“We could take further negative rating actions if we expect the cyclical economic recovery to be substantially weaker or delayed, as this would imply a far more negative effect on banks’ credit strengths,” it said in a statement this evening.

“Actions could also follow idiosyncratic negative developments at individual banks.”

The actions following a review by S&P of banking systems in Western Europe following the start of the coronavirus crisis.

“The Irish economy is small and open, making it vulnerable to economic cycles and external shocks, like the ones caused by the COVID-19 pandemic,” it said.

“We expect the Irish economy to contract in 2020 and recover only gradually starting from 2021. However, despite the anticipated recovery, we believe that there will be significant pressure on Irish banks’ operating environment and earnings prospects over the next two-to-three years.”

It says profitability is under increasing pressure at Irish banks because of their ongoing high cost base, compressed interest margins and their investments in transforming their business and becoming more digitally capable.

S&P sees growth opportunities as modest and says competition is stiff.

“The rating actions we have taken reflect that we now see Irish banks’ profitability remaining structurally low for at least the next two years with return on equity in the low single digits,” it says.

It says that even under its economic assumption, the policy responses taken in Ireland may not be completely successful in avoiding permanent economic damage later.

Earlier this month, ratings agency Fitch downgraded its outlook on AIB and Bank of Ireland to negative from stable as a result of the challenges posed by the Covid-19 pandemic.

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Calls for law change to allow virtual AGMs

It is the time of the year when many companies are due to hold their Annual General Meetings, however, because of the Covid-19 crisis, and social distancing requirements, many AGMs have been rescheduled or postponed.

Companies have found their firms in a Catch 22 situation – A company must have a physical AGM in order to change its constitution to allow virtual AGMs.

The Institute of Directors in Ireland says the vast majority of business leaders say Company Law should be amended temporarily to allow virtual AGMs.

Holding an AGM is essential for many companies in terms of meeting their governance responsibilities as well as complying with the regulations under Company Law. Holding an AGM provides accountability to shareholders and allows for the approval of the annual accounts in addition to meeting other requirements. 

Maura Quinn is Chief Executive of the Institute of Directors in Ireland.

“Directors are clearly faced with a dilemma as we enter what is widely regarded as AGM ‘season’ for many organisations, and they would like a resolution,” she said. “With many companies required to hold an AGM, IoD’s latest research shows that over one in five of businesses are postponing or rescheduling their AGMs in the hope that they can have a physical AGM within the 15-month timeline provided for under the Companies Act 2014.”

She said given that the survey has found that 29% of business leaders say their company’s Constitution does not allow/provide for them holding a virtual AGM, this means a lot of organisations are going to run out of road if physical distancing measures continue.

“In a sense it’s a chicken and egg situation, because companies themselves cannot amend their Constitution to allow for virtual AGMs, without having an AGM or EGM.”

Ms Quinn said a key finding of the snap poll is that an overwhelming majority of business leaders say Company Law should be amended temporarily to allow virtual AGMs to be held without the need for a company to amend its Constitution. “For this reason, we have raised this crucial issue in letters to the Department for Business, Enterprise, and Innovation, and the Office of the Director of Corporate Enforcement.”

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Oil prices fall on oversupply and storage capacity fears

Oil prices fell today on concerns about scarce storage capacity and global economic doldrums from the coronavirus pandemic. 

US oil futures led losses, falling by more than $2 a barrel on fears that storage at Cushing, Oklahoma, could reach full capacity soon. 

US West Texas Intermediate June futures fell $2.86, or 16.88%, to $14.08 a barrel just before lunchtime. 

Brent crude was down 83 cents, or 3.9%, at $20.61 a barrel. The June Brent contract expires on Thursday. 

Oil futures marked their third week of losses in a row last week – and have fallen for eight of the past nine – with Brent ending down 24% and WTI off around 7%. 

The June WTI contract’s price fall may have been partly triggered by investors moving to later months after the May contract lapsed into negative territory for the first time ever before expiring last week. 

The front-month contract was trading at lower-than-usual volumes. 

“The market is very concerned of a repeat of negative pricing as the Cushing storage and delivery hub saturates,” Harry Tchilinguirian, global oil strategist at BNP Paribas in London, told the Reuters Global Oil Forum. 

“The shift of open interest away from June will have negative consequences for the liquidity of the contract, potentially leading to greater volatility in its price,” he added. 

US crude inventories rose to 518.6 million barrels in the week to April 17, near an all-time record of 535 million barrels set in 2017. 

Cushing, the delivery point for WTI, was 70% full as of mid-April, although traders said all available space was already leased.  

Global economic output is expected to contract by 2% this year, worse than the financial crisis, while demand has collapsed 30% due to the pandemic. 

In the US, a record 26.5 million Americans have filed for unemployment benefits since the middle of March, and the Congressional Budget Office predicted that the economy would contract by nearly 40% annually in the second quarter.

“The current oil balance is simply awful, and no improvement is anticipated until after June due to massive fall in global oil demand,” said oil broker PVM’s Tamas Varga. 

The Organization of the Petroleum Exporting Countries and its allies including Russia, a group known as OPEC+, pledged this month to cut output by an unprecedented 9.7 million barrels per day in May and June. 

Kuwait and Azerbaijan are coordinating oil output cuts, while Russia is set to reduce its western seaborne exports by half in May. 

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Minister says scale of challenge on national economy and households ‘now very clear’

591,000 people are now receiving the Covid-19 Pandemic Unemployment Payment, with around 21,000 receiving it for the first time this week. 

That is on top of around 212,000 eligible for standard “non-Covid” Jobseekers benefit of €203 per week, and 337,400 receiving income support through the Temporary Wage Subsidy Scheme. 

The Minister for Employment Affairs and Social Protection, Regina Doherty, said the priority now was support all those needing assistance, and to help employers and workers to adjust to the emerging reality that Covid-19 may be with us for a long time to come. 

This week’s 7,000 increase in the number receiving the Covid Pandemic Payment is smaller than in previous weeks.

However, it yet again represents record-breaking levels of unemployment and social welfare dependency. 

While 591,000 are now receiving the €350 Covid payment, that is on top of around 212,000 receiving standard Jobseekers Benefit – though the Jobseekers figure tends to fluctuate, as it includes part-time and other atypical workers.

In addition, more than 49,000 employers have now registered for the Temporary Wage Subsidy Scheme administered by the Revenue Commissioners – with 337,400 employees receiving income support under the scheme. 

In total, 1,140,400 people are now fully or partially dependent on the State for income support. That is just under half the total workforce of 2.3 million. 

While a total of 691,000 applications have been processed for either the Covid Pandemic Payment or Jobseekers Benefit, 64,000 applications were closed – presumably because the employer in question took the employees back to avail of the Temporary Wage Subsidy Scheme.

Meanwhile 36,100 workers have been medically certified to receive the €350 per week Covid-19 Enhanced Illness Benefit, on the basis that they have either contracted the virus, or been ordered to self-isolate on a precautionary basis.  

Minister Doherty said the smaller increase in numbers on the Covid Pandemic Payment this week would suggest the country had come through the worst of temporary job layoffs. 

“That said, with over a million people in the country now dependent on some level of state provided income support, the scale of the challenge that this health emergency has posed for our national economy and to so many households is now very clear,” the Minister said.  

She said the priority now was to continue to support all those needing assistance and to help all employers and workers to adjust to the emerging reality that Covid-19 may be with us for a long time to come. 

“By anticipating which sectors will be most challenged, by identifying what future skills will be in greater demand and by providing the most effective job activation and employment supports, we will help as many people as possible back to work as quickly as possible,” she said. 

She noted that she had convened the first meeting of a new Labour Market Advisory Council last Friday to advise on public policy responses to support labour market recovery to support labour market recovery.

The Department of Employment Affairs and Social Protection also stressed that it carries out checks with the Revenue Commissioners to confirm eligibility for payments.

Two weeks ago, the Department confirmed to RTÉ News that applicants for the new Pandemic Unemployment Payment are not required to provide proof that they have been made redundant or laid off to qualify for the Pandemic Unemployment Payment, though such proof is required to apply for Jobseekers Benefit. 

Today’s statement says: “Integrity checks are made against records already held by the Department including Public Service Information data dn cross checks with payments on other schemes.”

Budget Office concerned over ‘lack of clarity’

Meanwhile, the Parliamentary Budget Office has said the ‘lack of clarity and detail’ provided to the Dáil about the cost of the Pandemic Unemployment Payment and Temporary Work Subsidy Scheme is a concern. 

In a publication issued today, the PBO estimates the combined schemes could cost between €3.87 and €3.93 billion over a 12-week period. 

It contrasts the €3.7bn estimate given by the Government in late March and the €4 to €4.5bn estimate outlined in last week’s Stability Programme update from the Department of Finance. 

It also highlights that a vote in the Dáil will be needed by May or June to approve the revised spending to cover the pandemic payments. This is because by that stage it is estimated that 80% of the previous year’s net allocation will have been reached and that is the limit set by the rules. 

It says the impact of Covid-19 on the economy is likely to be prolonged, even if businesses are able to reopen in June. Tourism, it notes, may be particularly badly affected. 

The PBO also notes that workers under the TWSS have little incentive to apply for the Covid Illness Benefit. This, it believes, may mean that the prevalence of the virus in the workforce is underestimated. 

In a further breakdown of recipients of the Pandemic Unemployment Payment, the Department confirmed that 337,000 are male, while 254,000 are female. 

The sectors with the highest number of PUP recipients are accommodation and food service activities (127,000), followed by wholesale and retail trade (89,300) and construction (78,500).
 
The counties with the highest numbers of applications were Dublin (171,700), Cork (61,200) and Galway (32,000) – while Leitrim had the fewest at 4,100. 

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Housing alliance seeks permission to restart building works

A housing alliance which is building affordable homes is getting a site ready to reopen next week, despite not having permission to re-start work from the State Housing Agency.

The Ó Cualann Cohousing Alliance has said they want to re-open their construction site in Ballymun in Dublin, but the development is not on the list of 35 housing developments which have been given permission to restart work.

The developer behind the project is Hugh Brennan. He told RTÉ’s News at One no work would recommence unless approval is received.

He said his company wrote to the State Housing Agency for permission to re-start work, and awaits its response before work recommences.

There are seven families, he said, which are in “dire need” of homes and are at risk of a lapse in mortgage approval if they don’t move in.

Mr Brennan said these homes are “will take three to four weeks to complete.”

He said the site is being prepared with the appropriate social distancing markers, and that the company can demonstrate that no one will be infected with Covid-19 as a result of attending work at the site.

“I have three family members who are vulnerable and could be compromises. If we pose any danger to anybody we don’t open up.  We have to ensure that we can maintain physical distancing. 

“We will operate a buddy system so that you will only work together with one person, and these people will travel together as well.”

“If we can’t start, we can’t start.  We won’t start unless we get the approval. We wouldn’t be able to start because we would be in breach of health and safety regulations. 

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