Ministers Donohoe & Humphreys welcome CSO figures showing 1,200 jobs created each week in 2018

 

  • Employment increased by 63,400 in 2018 (+2.9 per cent)
  • Employment in the fourth quarter of 2018 increased by 50,500 (2.3 per cent) relative to the same quarter in 2017
  • Full-time employment up 48,200 (+2.7 per cent) year-on-year in the fourth quarter
  • The level of employment (2,281,300) in the fourth quarter of 2018 is an all-time high.

 

Labour Force Survey (LFS) data published today (Tuesday) by the CSO show continued momentum in the labour market, with 63,400 net new jobs created in 2018, an average of 1,200 jobs per week.  There were 2,281,300 people employed in Ireland in the fourth quarter of last year, a new record.

Welcoming the figures, the Minister for Finance and Public Expenditure and Reform, Paschal Donohoe T.D., said: “I am pleased to see further positive developments in Ireland’s labour market.  The number of people at work continues to increase, with 63,400 additional jobs created over the course of last year, a 2.9 per cent increase on 2017.  The number of people at work has also reached a new all-time high, with 2,281,300 people now in employment in Ireland.  I am particularly encouraged that nearly all of the jobs gains in the final quarter of the year were full-time jobs.

“We have now seen 26 consecutive quarters of employment growth and, crucially, that growth remains broad-based, with annual gains recorded in most sectors and regions.  In parallel, unemployment continues to fall, with the unemployment rate reaching 5.7 per cent in January, the lowest rate since the beginning of 2008.  Despite the challenges ahead, this is further evidence that the economy continues to perform well, that Government policy is working, and that growth remains jobs-rich.

“We are moving into the next phase of Ireland’s economic development and the Government is well aware that there is no room for complacency.  Our labour market policies will increasingly focus on raising the participation rate, boosting productivity and safeguarding the competitiveness gains we have made in recent years.  Increasingly our focus should not only be on job creation but also on the sustainability, quality and productivity of jobs in the future. The Government’s forthcoming Future Jobs Ireland 2019 strategy will establish specific actions and targets for sustainable economic growth and job creation, to ensure that Ireland’s labour market, and indeed the wider economy, are fully equipped to deal with emerging challenges.”

Minister for Business Enterprise and Innovation, Heather Humphreys T.D, said: “I warmly welcome the latest Labour Force Survey release from the Central Statistics Office. With 200,500 new jobs created since the start of 2016, we have not only met but exceeded our target of 200,000 new jobs by 2020.

“We are also well on track to meeting the Government’s regional goal for 2020, with nearly 133,000 of a targeted 135,000 jobs created outside Dublin as of Q4 2018. This consistent improvement is reflective of the success of our annual Action Plans for Jobs, and this strong momentum will be carried on through the new Future Jobs Ireland initiative, which I will publish with the Taoiseach and Ministerial colleagues next week.

“I am also in the process of publishing 9 new Regional Enterprise Plans for the country, which have been developed by regional stakeholders from the ground up with the support of my Department. I am confident that these new plans will help to embed the successes of recent years while also addressing any vulnerabilities within individual regions.”


Ends

 

Note to Editors:

  • On a seasonally adjusted basis, employment increased by 0.4 per cent (+8,300) between the third and fourth quarters last year.
  • There were annual increases in employment in 6 of 8 regions and 10 of 14 sectors measured by the CSO.
  • The largest sectoral employment increases in the fourth quarter (in annual terms) were in Administration and Support Service Activities (+12.6 per cent or 11,900) and Construction (+7.9 per cent or 10,600).
  • The seasonally adjusted unemployment rate in January 2019 was 5.7 per cent.
  • Long-term unemployment (defined as those unemployed for a duration of one year or more) fell from 2.5 per cent to 2.1 per cent (-9,900) over the year to the fourth quarter of 2018.
  • The participation rate is defined as the number of persons in the labour force expressed as a percentage of the total population aged 15 or over. In the fourth quarter of 2018, the participation rate stood at 62.2 per cent, below the pre-crisis peak figure of 66.6 per cent (annual average in 2007).

 

Michael D’Arcy TD, Minister of State for Financial Services and Insurance at the Department of Finance today launches the ‘IFS2020’ Action Plan for 2019.

First launched in 2015, ‘IFS2020’ is a five-year Strategy for the development of Ireland’s international financial services (IFS) sector.

The Strategy’s vision is for Ireland to be the recognised global location of choice for specialist international financial services. The Strategy’s job creation target is 10,000 net jobs across the combined International Financial Services (IFS) portfolios of IDA Ireland and Enterprise Ireland between 2015 and 2019.  The employment target in the Strategy is on track to be achieved withalmost 9,000 net new jobs created across the combined IFS portfolios of IDA Ireland and Enterprise Ireland since 2015.

 

Commenting on the 2019 Action Plan, Minister Michael D’Arcy stated:

“2019 is the last year of asuccessful strategy that has increased the size and depth of the international financial services sector in Ireland. We have started work on formulating a successor strategy for the IFS sector.  This successor strategy will focus on helping the IFS sector to adapt and build on what has worked well in the past while addressing emerging challenges and capitalising on new opportunities.”   

Minister D’Arcy officially launches ‘IFS2020’ Action Plan 2019 at a reception in Iveagh House on Tuesday evening 12 February 2019. This is one of a number of engagements taking place in conjunction with Wednesday’s fourth annual European Financial Forum in Dublin Castle.

IFS2020 Action Plan 2019

ENDS
12 February, 2019

Note to Editors

Action Plan 2019

The IFS2020 Strategy is updated each year by means of annual action plans. The 2019 Action Plan has been prepared in close consultation with key public sector and industry stakeholders. 

The Action Plan’s priority action areas are:

  • Brexit (contingency planning);
  • Investment limited partnership legislation; and
  • Green and sustainable finance.

On Brexit, the Government will continue to prepare for the UK’s exit from the European Union. This is reflected in measure 1 (continue to prepare for all outcomes) and measure 18 (IFS legal Brexit summit).

The legislation on investment limited partnerships will continue to be a priority as part of the continued commitment to grow the funds sector. Progression of this legislation is contained in measure 13 (private equity finance).

The Action Plan contains a number of measures for further development of the green and sustainable finance sector in Ireland: developing a roadmap to support growth of sustainable finance (measure 24); education measures in sustainable finance (measure 25); a study on the development of a sustainable finance innovation programme (measure 28); assisting with the co-hosting of the European Climate Summit (measure 31) and supporting international collaboration on sustainability (measure 32).

The IFS strategy is also aligned with the goals of the future jobs Ireland initiative, which will ensure that Ireland is well positioned to adapt to the technological and other transformational changes the economy will face in the years ahead.

The 2019 Action Plan also contains a suite of 33 measures to be actioned in 2019 with lead agencies and organisations assigned to each measure.  

All measures fall under one of IFS2020’s strategic priorities which are as follows:

  1. Promote Ireland as a Location for International Financial Services & world class innovative products & services;
  2. Drive continuous improvement in the operating environment & competitiveness of Ireland’s IFS sector;
  3. Drive research, innovation & entrepreneurship in the IFS sector, with a particular focus on financial technology & governance, risk & compliance;
  4. Develop job-creation opportunities from emerging IFS sub-sectors & new markets;
  5. Implementation framework.

Successor to IFS2020 Strategy

It is intended that the new strategy will be launched once agreed by Government.

European Financial Forum

The hosting of a European Financial Forum each year is a key IFS2020 deliverable. The 2018 Forum was attended by nearly 600 delegates from over 350 organisations. Forty per cent of the attendees at EFF 2018 were international delegates from 24 countries. A similar attendance is expected for the 2019 Forum on Wednesday, 13th February 2019 in Dublin Castle. 

The event brings together both public and private sector leaders from around the world to lead debate and discussion around the challenges and issues facing the global economy. 

The European Financial Forum showcases Ireland’s international financial services (IFS) environment to an international audience, and highlights the Irish Government’s commitment to the development of IFS.

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, today (Tuesday) welcomed the formal adoption of a recommendation by ECOFIN to appoint Professor Philip Lane, Governor of the Central Bank of Ireland for a position on the Executive Board of the European Central Bank. The matter was discussed by Ministers at Eurogroup yesterday (Monday) and ECOFIN agreed their recommendation to the European Council earlier today.

Minister Donohoe stated: “I am very pleased that my colleagues at Eurogroup and ECOFIN were able to support Governor Lane for the position on the Executive Board of the ECB.

This is an important next step in the process, and I am looking forward to the European Parliament and the European Central Bank delivering their opinions on Professor Lane’s candidacy, in advance of the European Council next month.

Philip is a remarkably well qualified candidate and I am confident he would step up to the challenging post if appointed”. 

 

ENDS

 

Notes for Editors

The term of the incumbent, Peter Praet, ends on the 31st of May 2019. ECOFIN adopted a formal recommendation to the European Council regarding the appointment of his successor on the 12th of February. The European Parliament and European Central Bank will now deliver opinions on the recommendation with the final consideration of the appointment scheduled for the European Council on the 21st of March.

The new Executive Board member will take up their post on the 1st of June 2019.

 

Biography of Philip Lane

Philip R. Lane is Whately Professor of Political Economy (on leave) at Trinity College Dublin. He is Governor of the Central Bank of Ireland and sits on the ECB Governing Council. He is an ex-officio member of the General Board, Chair of the Advisory Technical Committee and Steering Committee of the ESRB.  He received his PhD in Economics from Harvard in 1995 and was Assistant Professor of Economics and International Affairs at Columbia University during 1995-1997 before returning to Dublin.

His research interests include financial globalisation, macroeconomics of exchange rates and capital flows, macroeconomic policy design and European monetary integration.  His work has been published in the American Economic Review, Review of Economics and Statistics, Journal of Economic Perspectives, Journal of International Economics, NBER Macroeconomics Annual and many other journals.

In 2001, he was the inaugural recipient of the German Bernacer Award in Monetary Economics for outstanding contributions to European monetary economics; in 2010, he was co-recipient of the Bhagwati Prize from the Journal of International Economics. He is a research fellow of the Centre for Economic Policy Research (CEPR); he was previously the Director of its International Macroeconomics and Finance Programme.

He has also acted as an academic consultant for the European Central Bank, European Commission, International Monetary Fund, World Bank, OECD, Asian Development Bank and a number of national central banks. He is also a member of the Royal Irish Academy.

The  Minister for Finance and Public Expenditure & Reform, Paschal Donohoe TD, together with the Minister of State for Financial Services and Insurance, Michael D’Arcy TD, today announced the final agenda and line-up of speakers for the European Financial Forum, which will take place in Dublin Castle on Wednesday 13 February.

This will be the fourth year of the Forum, which has established itself as a key engagement event for the financial industry not just for Europe but on a global scale as it connects industry leaders from the main financial centres around the world. The theme of this years forum is ‘Policies and business models for a changing financial landscape’.

The Forum is a one-day event organised in partnership with the IDA and the Financial Times.  Speakers at EFF2019 will include the Taoiseach, Leo Varadkar TD; Ministers Donohoe and D’Arcy, as well as a diverse range of speakers from the public, private and regulatory fields:

– Central Bank Governor, Philip Lane;

– Martin Shanahan, CEO, IDA Ireland

– Head of EMEA and CEO of Morgan Stanley & Co. International, Clare Woodman;

– President of the Atlanta Federal Reserve, Raphael Bostic;

– Vice Chair of Bank of America Merrill Lynch, Anne Finucane;

– CEO and President of State Street, Ronald O’Hanley.

– CEO of Citigroup, Mike Corbat.

Minister Donohoe stated that “the Forum is an opportunity to bring together both public and private sector leaders from around the world to lead debate and discussion around the challenges and issues facing the financial services industry and the wider global economy.”. The Minister added that: “EFF 2019 will focus on the changes that have taken place in the global financial system over the last decade, as well as the future direction of the industry, by examining key trends, opportunities and threats that demand attention from financial services leaders in 2019 and beyond”.

Minister D’Arcy stated that: “as a Government-sponsored event the EFF demonstrates Government’s commitment to the international financial services sector”. He added that: “the EFF is a stand-out event which provides a platform for top decision-makers and influencers, in the public, private and regulatory fields of financial services, to engage on the key issues affecting the industry”.

Both Ministers recognised that the EFF allows Ireland’s IFS sector to showcase its capability in providing specialist financial services, with senior executives explaining the importance of their Irish operations as part of their Global and regional corporate strategies.

 

ENDS

 

 

Notes to Editors

The EFF is organised under the auspices of IFS2020, the  Government Strategy for Ireland’s International Financial Services (IFS) sector. The Financial Times, in partnership with IDA Ireland, will host and manage the Forum.

The European Financial Forum is an event designed to meet the needs of senior decision-makers and professionals working in the following areas:

  • Banking
  • Insurance
  • Institutional Investment
  • Asset Management
  • Financial Regulation
  • Economic Research or Policy
  • FinTech

The Forum will take on Wednesday 13th February at the Printworks Conference Centre at Dublin Castle.

For the full programme of events and further information on the Forum visit the dedicated website: https://live.ft.com/Events/European-Financial-Forum2

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, today (Wednesday) hosted a credit union event in the Department of Finance. The purpose of the event was to bring together different credit union stakeholders to discuss recent and upcoming developments in the sector, as well as future opportunities and challenges facing the movement.

 

The event was attended by the members of the Credit Union Advisory Committee (CUAC), the Credit Union Representative Bodies, the Registrar and Deputy Registrar of Credit Unions, some local Credit Unions as well as other credit union stakeholders.

 

The event, which was opened by Minister Donohoe, included a presentation from the Chair of the CUAC on their work plan for the coming year, as well as a presentation from the Department of Finance’s Head of Credit Union Policy, Brian Corr, as chair of the CUAC Report Implementation Group.

 

The Event was closed by Mark Quigley, Senior Manager, Financial Services in Accenture where he presented on the Future of Finance and the evolving retail financial services landscape.

 

Opening the Event, Minister Donohoe reiterated the Government’s support for the credit union movement, and recognised the important role it plays in society. The Minister spoke of the inspiring origins of the movement, the significant change undergone by the sector in the last 10 years, the importance of collaboration and the challenges and opportunities now facing credit unions. He also noted that credit unions could and should do more in terms of community lending and Personal Micro Credit.

 

Concluding the Minister said: ‘The challenges facing the credit union sector are very real, but so too are the strengths of the movement.  Credit unions have the capacity to help communities all over the country. The Government supports the valuable role of credit unions in Ireland, and believes the sector can play an even greater role in our communities. With such strong foundations, coupled with the enterprise and ethos characteristic of the early pioneers of the movement, I believe credit unions have a bright future and will continue the successes of the last 60 years’.

 

 

Background information

Credit Union Advisory Committee

The Credit Union Advisory Committee is a statutory Committee whose function is to advise the Minister for Finance regarding:

  • The improvement of the management of credit unions;
  • The protection of the interests of members and creditors of credit unions; and
  • Other matters relating to credit unions upon which the Minister, the Central Bank or such other persons as may be specified by the Minister may from time to time seek the advice of the Committee.

 

The CUAC meets on a monthly basis in the Department, with the Department providing secretariat. It regularly invites credit union stakeholders to meetings to share their views on various topics.

The CUAC published its work plan on the 6th February 2019.

 

CUAC Report Implementation Group

The CUAC Report Implementation Group was established on foot of the CUAC Review of the Recommendations in the Commission on Credit Unions Report in order to oversee and implement the CUAC’s recommendations. The Implementation Group was chaired by the Department and consisted of one member from each of the credit union representative bodies – the Irish League of Credit Unions, the Credit Union Development Association, the Credit Union Managers’ Association, and the National Supervisors Forum – along with one member from the CUAC and a member from the Central Bank. The Implementation Group published its Final Report on the 7th January 2019.

 

The Credit Union Advisory Committee (CUAC) has welcomed the publication of the Final Report of the CUAC Report Implementation Group. The Implementation Group was set up to oversee and implement recommendations from a 2016 Review undertaken by the CUAC. The Final Report summarises the work of the Implementation Group and the progress that has been made on the CUAC recommendations.

Commenting on the report the chair of the CUAC, Lorraine Corcoran, said:
“We would like to thank the Implementation Group for their work and for the Final Report which is a very useful contribution to current policy discussions regarding the Credit Union sector. We are happy to see that many of the recommendations have been progressed satisfactorily and recognise the role of the Implementation Group’s work in this regard. We do note however that some recommendations have not progressed in the manner envisaged by CUAC, the most notable of which relates to Consultation and Engagement. It is now for the CUAC to consider further these recommendations, reflecting the current environment and whether there is an alternative manner in which they may be progressed. Regarding the Implementation Group’s conclusion on Tiered Regulation, the CUAC agrees that given developments in the sector Tiering within Regulations may be more appropriate at this time, and that Tiered Regulation could be revisited again in future if necessary.”

Work plan

The CUAC also announced today its work plan for 2019 and beyond.

Given four new members, including a new chair, were appointed to the Committee in September 2018, the Minister for Finance Paschal Donohoe provided ministerial guidance to the CUAC for its work over the next number of years.

In addition to a focus on business model development as the biggest issue facing the sector the Minister requested the CUAC to specifically look at (1) barriers to and supports for collaborative efforts (2) SME lending, linking with the outcomes of the Local Public Banking report. The Minister also asked the CUAC to look at “people” aspects of the sector including the varied issues impacting directors, managers, staff and volunteers, an area which wasn’t focussed on in the last CUAC report as the new governance regime had not yet bedded down.

Having given the directions due consideration, the CUAC has decided to prioritise during 2019:

  • Undertaking research with Directors of credit unions. As a key strategic player within the credit union sector, the role of Directors of credit unions has changed fundamentally in recent years. The purpose of the research is to understand the issues and challenges facing Directors and to explore their role in the context of the current governance structure, operating framework – including business model development – and broader environment that credit unions conduct business in.
    This research will involve first conducting a series of focus groups with a diverse range of directors before conducting a wider survey of Directors of the Credit Union sector as whole. This work will take place over H1 2019 and the results of the focus groups and the survey will be published along with an analysis by the CUAC. It is expected that the exploration of these issues and the subsequent findings may help inform the work of the Committee over the next three years.

 

  • A policy paper on Barriers and Supports to Collaboration. The CUAC notes that while there are many new collaborative initiatives in the sector, cooperation and collaboration among Irish credit unions has historically not materialised to the same degree as International credit union movements. The CUAC believes that in the modern financial services landscape, collaboration and the scale it provides will be imperative for future of the Credit Union movement and therefore intends to undertake a piece of work to see what barriers are present in the Credit Union landscape in Ireland and if there are any supports that are necessary.

The Committee will also:
• Keep a watching brief on developments with the Local Public Banking report and will assess later in 2019 what further analysis would be most useful for the Minister and the sector;

• Review all outstanding issues from the CUAC report and, if appropriate, consider further work in these areas, in particular on Consultation and Engagement;

• Track emerging issues in the sector as they arise;

• Undertake Statutory Consultations as they arise.

In addition, the CUAC would welcome feedback from any stakeholders on the workplan, specific work identified or other matters that stakeholders believe the CUAC should consider. Feedback can be provided to the Committee to creditunions@finance.gov.ie marked for the attention of CUAC.

Any policy papers completed by the CUAC in relation to the areas identified will where possible be published to ensure transparency to the sector.

Explaining the CUAC’s prioritisation and work plan for the year, the Chair said:
“There is strong anecdotal evidence which suggests that Credit Union Directors feel that the impact of regulatory changes to their role is not fully understood. Given the depth and breadth of how their role has changed over the last six years and their central governance function we felt there would be valuable insights to be gained from this important group. On Barriers and Supports to Collaborative efforts, we believe that collaboration among Credit Unions is key in terms of Business Model Development and the future of the sector and therefore we have decided to prioritise analysing how more collaboration could be fostered in the Credit Union Sector.”

 

ENDS

Fiscal_Monitor_2019_January

  • Ireland now ranks tenth out of 27 EU Member States for the combined use of card payments, credit transfers and direct debits
  • The volume of cheques has halved in less than six years
  • there has been a notable reduction in the amount of cash withdrawn from ATMs over this time

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe T.D., has today, (Monday), published a report prepared by Indecon International Economic Consultants benchmarking Ireland’s payments industry. The report was published today at an event launched by the Minister. Other speakers included Éric Ducoulombier, Head of Retail Financial Services at the European Commission; Anne Boden, CEO of Starling Bank and Alan Gray, Managing-Partner at Indecon.

The report shows that Ireland has made very significant progress in recent years in moving from a cash-intensive economy with a rapid increase in the take-up of electronic payments.

Ireland now ranks tenth out of 27 EU Member States for the combined use of card payments, credit transfers and direct debits.  On average, consumers make 237 electronic payments a year and write only 8 cheques. The volume of cheques has halved in less than six years and, while cash remains an important form of payment, there has been a notable reduction in the amount of cash withdrawn from ATMs over this time.

The report shows that payment cards play an important role in how we pay, and that Irish people have really taken to debit cards and contactless payments. Debit cards account for 74 per cent of the nearly 6 million cards in issuance. Notwithstanding the €30 transaction limit, the value of contactless card payments exceeded €1 billion in the second quarter of last year.

Indecon notes a risk that some segments of Ireland’s society could be excluded by an accelerated move to electronic payments, though it also finds that access to a bank account has increased dramatically over the last decade.

Speaking at the launch of the report, the Minister said: ‘I welcome today’s publication of this report benchmarking Ireland’s payments industry. I note the efficiency and cost savings associated with the move to electronic payments and I am pleased to see the significant progress Ireland has made in the take-up of electronic payments’.

“Irish enterprise generally compares well to other European countries in terms of offering and using electronic payments, and a particularly notable feature of the Irish payment industry is the regional location of many firms”.

 

ENDS

  • Survey shows Irish SME environment remains favourable
  • Of those SMEs that did not access credit, 89% cited lack of credit requirements
  • 7th year in a row that there has been an increase in reported number of companies making a profit
  • 51% of SMEs report that women either own or are part owners of the company

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, has today (Sunday) welcomed the Department of Finance’s publication of  the latest in its series on SME Credit Demand Surveys, which covers the six month period April – September 2018.

 

This survey series is currently conducted by Fitzpatrick Associates in conjunction with Behaviour and Attitudes, on behalf of the Department of Finance.  It is the most comprehensive survey of SME Credit Demand in Ireland, covering over 1,500 respondents through in-depth discussions.

 

The Department has conducted the SME Credit Demand Survey biannually since 2011 in order to have an independent and statistically significant report into the Irish SME landscape and the availability of, and demand for, credit that exists for SMEs.

 

Some of the Survey’s key findings include:

 

  • While demand for credit has decreased to 20% in this survey, of those SMEs that did not access credit 89% cited lack of credit requirements as their reasoning;
  • For the 7th year in a row, we have seen an increase in the reported number of companies making a profit; 72% of all SMEs reported a profit in the period;
  • The survey registers little change in expected future demand for credit, with 19% of SMEs expecting to apply for finance in the next six months, compared to 20% during the corresponding period in 2017;
  • The average cost of credit reported on outstanding loans has continued to decline, at 4.4%, down from 5.1% in September 2017;
  • 76% of all SME credit applications were fully or partially approved at the time of surveying;
  • Drawdowns continue to increase with 73% of respondents reporting that they have availed of their full credit facility, a significant increase compared to 60% in September 2017;
  • 51% of SMEs report that women either own or are included as owners of the company. When asked if the Senior Manager or CEO of the firm was female, the response indicated that just under one in three of all SMEs are managed by a female. This rose to 33% for micro companies, but dips to 22% of all medium companies.

 

 

On the publication of the SME Credit Demand Survey Minister Donohoe said:  ‘I welcome the results of the latest SME Credit Demand Survey, which shows that though credit demand is low, the number of SMEs reporting a profit has again increased, for the seventh year in a row. It is also more than timely that levels of female participation were captured.  The survey has shown that while 51% of SME owners/part owners in Ireland are female, this decreases to 29% for female management of SMEs.

I would like to take this opportunity to sincerely thank all those businesses that took part in this survey.  The SME Credit Demand Survey series is a valuable resource that allows us deepen our understanding of how to support our indigenous businesses, which are the backbone of our economy.”

 

ENDS

 

Note for Editors:

 

Background of Report

The SME Credit Demand Survey has been conducted biannually since 2011 to monitor trends in access to credit by SMEs.  Please note while the survey is conducted on a 6 monthly basis, for presentation purposes, the report uses year-on-year comparisons.

 

The Department has conducted the SME Credit Demand Survey in order to have an independent and statistically significant report into the Irish SME landscape and the availability of, and demand for, credit that exists for SMEs.   The survey was conducted through a telephone survey covering over 1,500 businesses.  It drew a carefully constructed sample from a large database of SMEs, made repeated calls to ensure a full response and asked factual questions. The full questionnaire is included in the report. The report and previous reports are available on the Department of Finance website at www.finance.gov.ie.

 

The report published today presents the results from the SME Credit Demand Survey April – September 2018.  Conducted by Fitzpatrick Associates in conjunction with Behaviour and Attitudes, all interviews took place between October 26th and 6th December 2018.

 

Trading Performance

86% of all businesses surveyed report increased or stable turnover in the past six months.

For the seventh year in a row, we have seen an increase in the reported number of companies making a profit.

 

The hotel and restaurant sector, along with the construction, business services and manufacturing sectors, have experienced the most pronounced improvements in turnover. Growth has however moderated amongst exporting businesses, where 53% report increased turnover in the six months to September 2018, down from 58% in 2017.

 

Demand for Bank Finance

The proportion of companies that applied for finance with one of the pillar banks has increased – from 76% of all those requesting bank finance in September 2017 up to 79% in September 2018.

 

5% of SMEs report having missed repayments of their loans in the past six months while 3% have adjusted their bank debt in the past six months. The main types of adjustments being made are repayment scheduling, rate reduction and term extension.

 

20% of SMEs requested bank finance in the past six months, down from 26% in March 18 and 23% in Sept 17.

 

79% of SMEs who applied for finance did so with one of the pillar banks, up from 76% in Sept 2017.

 

The proportion of credit applications that were declined stands at 13% in this survey, down marginally from 14% in September 2017.

Credit Support Awareness

 

Excluding ‘don’t knows’, the proportion of companies that were refused credit from the main banks, and said that they were informed of their right to a decision review by the Credit Review Office, stands at 69%.

 

A majority of SMEs are aware of Enterprise Ireland (86%), and Local Enterprise Offices (77%) support initiatives. 41% of SMEs are aware of the Credit Guarantee Scheme. 85% of those surveyed indicated that internal funds/retained earnings represent the primary source of working capital finance (an increase of four percentage points since 2017).

 

 

Non-Bank Finance

7% of those surveyed reported that they made enquires into non-bank finance, this percentage has been falling since September 2014.

 

62% of these requests for non-bank finance were either fully or partially successful, down from 66% in September 2017.

 

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, today (Wednesday) acknowledged the closing of nominations for a position on the Executive Board of the European Central Bank. As the nominating period closed Professor Philip Lane, Governor of the Central Bank of Ireland, remained the sole candidate.

 

The next Eurogroup meeting is expected to discuss Professor Lane’s candidacy on 11 February and ECOFIN will adopt a formal recommendation to the European Council on the 12th of February.

 

Professor Lane’s outstanding economic, financial and policy making record ideally position him to take a seat at the Executive Board of the European Central Bank. 

 

His current position as Chair of the Advisory Technical Committee of the European Systemic Risk Board (ESRB) and his previous appointments as Chair of the High-Level Task Force on Safe Assets and Chair of the Advisory Scientific Committee, demonstrate the standing he is held in at European level. 

 

Minister Donohoe stated: ‘I am delighted to hear that Governor Lane is standing unopposed for the position on the Executive Board of the ECB. Philip is an exceptionally well qualified candidate and I have every confidence would do an exemplary job if appointed to the role’. 

  

ENDS

 

Notes for Editors

At the Eurogroup meeting of Eurozone Finance Ministers today (21st of January 2019), the Eurogroup President initiated the procedure for the appointment of a member of the Executive Board of the European Central Bank with a call for candidacies. The term of the incumbent, Peter Praet, ends on the 31st of May 2019. The Eurogroup will agree on a candidate on the 11th of February and ECOFIN will adopt a formal recommendation to the European Council on the 12th of February. The European Parliament and European Central Bank will then deliver opinions on the recommendation with the appointment scheduled to be agreed at the European Council on the 21st of March. The new Executive Board member will take up their post on the 1st of June 2019.

 

Biography of Philip Lane

Philip R. Lane is Whately Professor of Political Economy (on leave) at Trinity College Dublin. He is Governor of the Central Bank of Ireland and sits on the ECB Governing Council. He is an ex-officio member of the General Board, Chair of the Advisory Technical Committee and Steering Committee of the ESRB.  He received his PhD in Economics from Harvard in 1995 and was Assistant Professor of Economics and International Affairs at Columbia University during 1995-1997 before returning to Dublin.

His research interests include financial globalisation, macroeconomics of exchange rates and capital flows, macroeconomic policy design and European monetary integration.  His work has been published in the American Economic Review, Review of Economics and Statistics, Journal of Economic Perspectives, Journal of International Economics, NBER Macroeconomics Annual and many other journals.

In 2001, he was the inaugural recipient of the German Bernacer Award in Monetary Economics for outstanding contributions to European monetary economics; in 2010, he was co-recipient of the Bhagwati Prize from the Journal of International Economics. He is a research fellow of the Centre for Economic Policy Research (CEPR); he was previously the Director of its International Macroeconomics and Finance Programme.

He previously held the positions of Chair of the ESRB Advisory Scientific Committee and Chair of the High-Level Task Force on Safe Assets of the European Systemic Risk Board.

He has also acted as an academic consultant for the European Central Bank, European Commission, International Monetary Fund, World Bank, OECD, Asian Development Bank and a number of national central banks. He is also a member of the Royal Irish Academy.

Ireland deposits Instrument of Ratification & final Multilateral Instrument with the OECD to give effect to BEPS recommendations

Wednesday, 30th January 2019

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, today (Wednesday) welcomed the deposit with the OECD of Ireland’s Instrument of Ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to prevent BEPS (Multilateral Instrument).

The OECD developed the Multilateral Instrument to apply many of the BEPS Recommendations to the approximately 3,000 bilateral tax treaties in place worldwide and prevent the need to renegotiate each one individually.

Commenting on the deposit of the Multilateral Instrument, Minister Donohoe said: ‘This is another example of the action Ireland is taking to tackle aggressive tax planning.  Ireland has always believed that aggressive tax planning is best addressed through co-operative multilateral agreements and I am delighted that we are depositing our Instrument of Ratification with the OECD today.  Once the Instrument is in force, it will significantly reduce opportunities for tax treaty abuse including bringing about the end of the so called “Single Malt” structure.  This completes the delivery of another important commitment set out in Ireland’s Corporation Tax Roadmap.’

The most important changes to Ireland’s treaties under the Multilateral Instrument will be the introduction of strong anti-avoidance rules that should prevent treaty benefits being claimed inappropriately.

The Multilateral Instrument also puts in place the final element necessary to end the so called “Single Malt” structure following the signature of a Competent Authority Agreement by the Maltese and Irish authorities last November.

Ireland remains committed to international tax reform and to continuing the implementation of new robust global standards that will ensure our corporation tax code is sustainable in the long run.

ENDS

Notes for Editors

The OECD BEPS Multilateral instrument provides a mechanism to allow countries implement key BEPS Recommendations by modifying the application of their existing bilateral tax treaties.

Together with the Instrument of Ratification, Ireland deposited its Final Position on the Multilateral Instrument which was agreed by Dáil Éireann in Finance Act 2018. The Instrument will now come into effect in respect of Ireland’s bilateral tax treaties in line with the timelines set out in the Instrument.

  • Under a disorderly exit of the UK from the EU, the Irish economy could be 4¼ per cent smaller than the current projections over the medium-term;
  • Employment would increase more slowly and the unemployment rate could rise by 2 percentage points;
  • The public finances would deteriorate – the modest surplus projected for 2020 would turn to deficit;
  • Updated multi-annual forecasts will be published in the Stability Programme in April.

The Minister for Finance and Public Expenditure & Reform, Paschal Donohoe TD today (Tuesday) discussed the economic and fiscal impacts of a disorderly exit of the UK from the European Union with Government.  While the central scenario remains an orderly exit – involving the UK leaving with a transition arrangement in place until the end of next year, and some form of trade agreement thereafter – the risk of a disorderly exit has increased in recent weeks.

All forms of UK exit will have a detrimental impact on the Irish economy, with the most adverse impacts likely to be felt in agri-food and indigenous manufacturing sectors, as previous Department of Finance research has shown.  The more disorderly the exit, the larger the macroeconomic impact.

As part of the Government’s ongoing contingency planning for a no deal Brexit, this preliminary assessment prepared by the Department of Finance suggests that a disorderly exit will reduce the level of GDP (the size of the economy) by around 4¼ percentage points (relative to the Budget 2019 central scenario forecast) over the medium term (to 2023) and by around 6 percentage points relative to a hypothetical ‘no Brexit’ scenario. Weaker exports due to trade disruption – tariff and non-tariff barriers – and sterling depreciation, and more modest domestic demand due to higher consumer prices, precautionary saving and uncertainty are the main channels through which economic activity would be affected.

Commenting on the assessment, Minister Donohoe said: There remains considerable uncertainty surrounding the format the UK’s exit from the EU will take.  The assessment by my Department shows that a disorderly exit would be particularly severe.  The level of economic activity will be around 4¼ percentage points lower than our existing trajectory over the medium-term.  This aggregate figure hides an even larger hit to economic activity in labour-intensive sectors such as agri-food and indigenous small and medium-sized enterprises’.

“Further, given Ireland’s unique macroeconomic and sectoral exposures to the UK these impacts would be disproportionate relative to the rest of the EU. It is important to recognise that such estimates may not capture the full impact, and the figures may be conservative.  Nevertheless, quantifying the impact is important to help Government understand the possible macroeconomic implications and to design the appropriate policy response.”

While in aggregate terms the economy is likely to continue expanding, the pace of growth would be lower than is currently expected, with negative spill-overs to the labour market and to the public finances.  In terms of the former, the unemployment rate would increase by an estimated 2 percentage points (relative to Budget 2019 projections).  In relation to the latter, the headline deficit could deteriorate by nearly a percentage point of GDP in the short-term.

Minister Donohoe said: “In the short-term, the appropriate fiscal strategy would be to allow the public finances absorb the shock – the in-built automatic stabilisers will provide the first line of defence for our economy (allowing a deficit to occur).  More information will be available at the time of Budget 2020, which will be introduced in October of this year, and this will enable Government to design the appropriate budgetary policy response.”

The future path of the economy and the public finances remains highly uncertain.  For instance:

  • The timing and nature of the UK’s exit remains unclear;
  • Calibrating a model to simulate the impact of an unprecedented shock is challenging;
  • The phasing-in of the economic impact is uncertain.

As more information becomes available, the Department will update and publish its assessment in the Stability Programme, which will be submitted to the European Commission in April.

 

Ends

Notes to editors:

The Department of Finance (jointly with the ESRI) previously estimated the impact of a hard exit, which was outlined in Budget 2019).  This was based on an assessment of the impact on the UK economy by NIESR (a broadly similar body to the ESRI in the UK) in 2016.  In November, this latter assessment was updated showing that the impact in the UK was larger than previously assumed.  On foot of this, the Department / ESRI are updating their original work and the results will be published shortly (and used to inform the projections that will underpin the Stability Programme).

Budget 2019 is based on the “central scenario” that the UK will make an orderly agreed exit from the EU.

  • The results of this initial assessment show that by 2023 the economy would be of the order of 4¼ per cent smaller than the Budget 2019 forecasts, and of the order of 6 per cent lower than a no Brexit baseline;
  • It shows that a ‘no-deal’ Brexit would result in a substantial slowdown in GDP growth to 2.7 per cent in 2019 (from an estimated 4.2 per cent in Budget 2019) and under 1 per cent in 2020 (from 3.6 per cent) – reductions of 1½ per cent and 2¾ per cent respectively.
  • The phasing-in of the impact requires judgement.
  • The impact would be significant with employment growth slowing sharply and unemployment rising.  Tax revenue would be lower, and expenditure would rise.
  • By 2023, total employment would increase by around 178,000, but this would be some 55,000 below the Budget 2019 forecast.  Employment in 2020 would still be higher than this year – but by a smaller amount.
  • The general government balance would worsen from broad balance to a deficit of 0.2 per cent in 2019 and from a surplus of 0.3 per cent of GDP to a deficit of 0.5 per cent in 2020, with further worsening out to 2023.

While ratification of the Withdrawal Agreement is still the Government’s preferred outcome, this update is the next step in a series of measures that the Government is taking, both nationally and in conjunction with the EU, in preparation for the possibility that the UK fails to agree a deal for their departure from the European Union on 29 March. As part of its No Deal Brexit Contingency Action Plan, the Government received its latest update on no deal planning arrangements covering finance measures, agrifood and transport.  Regarding the other two areas;

The Government was also updated by the Minster for Transport, Tourism and Sport on cross-border rail arrangements including operation and regulation, as part the no-deal Brexit omnibus Bill.

The Government also discussed the implications for the Irish agri-food sector of a no-deal Brexit and ongoing contingency and planning work in the Department of Agriculture, Food and the Marine. Government was also updated on recent bilateral discussions between Minister Creed with Commissioner Hogan to discuss the potential impact of a disorderly Brexit on the Irish agri-food and fisheries sectors. The discussion also covered the need to deploy market response measures, including exceptional aid, under the CAP to provide necessary supports to Ireland’s agri-food sectors, given our specific exposure to the UK market. Minister Creed and Commissioner Hogan agreed to remain in close contact as the situation develops and we have more clarity about the nature of the UK’s departure.

Link to General Scheme of no-deal omnibus Bill

https://www.dfa.ie/media/dfa/eu/brexit/brexitnegotations/General-Scheme-of-Miscellaneous-Provisions.pdf

Government Contingency Action Plan:

https://merrionstreet.ie/MerrionStreet/en/News-Room/Releases/No_Deal_Brexit_Contingency_Plan.pdf

 

Annex 1

Previous Department of Finance research on economic implications of Brexit:

1 Link: Brexit: Analysis of Import Exposures in an EU Context – March 2018

  • The paper examines the sectoral import exposures of the Irish economy and other EU Member States to the UK, building on a September 2017 Department of Finance research paper analysing export exposures. Together with previous studies, this report is a further contribution that will inform the whole of Government work on contingency planning. Link to press release here.
  1. Link: UK EU Exit: Trade Exposures of Sectors of the Irish Economy in a European Context – September 2017
  • This paper examines how exposed traded sectors of the Irish economy and other European Union (EU) member states are to the United Kingdom in light of Brexit. The paper also compares Ireland’s revealed comparative advantage at the sectoral level, to show the most specialised sectors in Ireland relative to the rest of the world, and how Brexit may affect these.
  1. Link: UK EU EXIT – An Exposure Analysis of Sectors of the Irish Economy – March 2017
  • This paper examines the trade exposures of sectors of the Irish economy to the UK in light of the United Kingdom’s decision to exit the European Union. The research in this paper is motivated by a desire to better understand which sectors of Ireland’s economy are most exposed to the UK’s departure from the EU. Note: This paper is an update of a previous version of the paper that was published with Budget 2017 on 11 October 2016. Following publication of the October 2016 version, the CSO released updated data which is now included in the revised paper.
  1. Link: Modelling the Medium to Long Term Potential Macroeconomic Impact of Brexit on Ireland – November 2016
  • This research was conducted under the joint Department of Finance and ESRI Research Programme on The Macroeconomy and Taxation, and examines the potential medium to long term implications of Brexit under a range of scenarios. Looking at the effect ten years after a UK exit, a WTO scenario results in the level of GDP being 3.8 per cent below what it otherwise would have been in a no-Brexit scenario; the bulk of the impact occurs in the first five years. As a result, the level of employment is 2 per cent below what it would otherwise have been, with the unemployment rate nearly 2 percentage points higher. The most severe scenario indicates that the Irish economy will be more severely impacted than the UK economy.

 

Contact
Deborah Sweeney, Press Adviser to Minister Donohoe – 086 858 6878
Aidan Murphy, Press Officer, Department of Finance – 085 886 6667

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, today (Monday) announced his decision to nominate Professor Philip Lane, Governor of the Central Bank of Ireland, to the Executive Board of the European Central Bank. The Eurogroup will agree on a candidate on the 11th of February and ECOFIN will adopt a formal recommendation to the European Council on the 12th of February.

Professor Lane’s outstanding economic, financial and policy making record ideally position him to take a seat at the Executive Board of the European Central Bank. 

His current position as Chair of the Advisory Technical Committee of the European Systemic Risk Board (ESRB) and his previous appointments as Chair of the High-Level Task Force on Safe Assets and Chair of the Advisory Scientific Committee, demonstrate the standing he is held in at European level. 

Minister Donohoe stated:

“I am delighted to nominate Governor Lane to the Executive Board of the ECB. Philip is well recognised as a person of calibre and is held in high esteem across Europe. “ 

ENDS

Monday, 21st January 2019 

 

Notes for Editors

At the Eurogroup meeting of Eurozone Finance Ministers today (21st of January 2019), the Eurogroup President initiated the procedure for the appointment of a member of the Executive Board of the European Central Bank with a call for candidacies. The term of the incumbent, Peter Praet, ends on the 31st of May 2019. The Eurogroup will agree on a candidate on the 11th of February and ECOFIN will adopt a formal recommendation to the European Council on the 12th of February. The European Parliament and European Central Bank will then deliver opinions on the recommendation with the appointment scheduled to be agreed at the European Council on the 21st of March. The new Executive Board member will take up their post on the 1st of June 2019.

 

Biography of Philip Lane

Philip R. Lane is Whately Professor of Political Economy (on leave) at Trinity College Dublin. He is Governor of the Central Bank of Ireland and sits on the ECB Governing Council. He is an ex-officio member of the General Board, Chair of the Advisory Technical Committee and Steering Committee of the ESRB.  He received his PhD in Economics from Harvard in 1995 and was Assistant Professor of Economics and International Affairs at Columbia University during 1995-1997 before returning to Dublin.

His research interests include financial globalisation, macroeconomics of exchange rates and capital flows, macroeconomic policy design and European monetary integration.  His work has been published in the American Economic Review, Review of Economics and Statistics, Journal of Economic Perspectives, Journal of International Economics, NBER Macroeconomics Annual and many other journals.

In 2001, he was the inaugural recipient of the German Bernacer Award in Monetary Economics for outstanding contributions to European monetary economics; in 2010, he was co-recipient of the Bhagwati Prize from the Journal of International Economics. He is a research fellow of the Centre for Economic Policy Research (CEPR); he was previously the Director of its International Macroeconomics and Finance Programme.

He previously held the positions of Chair of the ESRB Advisory Scientific Committee and Chair of the High-Level Task Force on Safe Assets of the European Systemic Risk Board.

He has also acted as an academic consultant for the European Central Bank, European Commission, International Monetary Fund, World Bank, OECD, Asian Development Bank and a number of national central banks. He is also a member of the Royal Irish Academy.

Monday, 14th January 2019 

Minister D’Arcy undertakes official visit to Beijing, Hong Kong & Macau


The Minister of State with responsibility for Financial Services and Insurance, Michael D’Arcy TD, will speak at the Asian Financial Forum in Hong Kong today (Monday) as part of an official visit to Beijing, Hong Kong & Macau.


In Macau, Minister D’Arcy will attend a working Lunch with senior business figures and the Irish & EU Macau Chambers of Commerce. In Hong Kong, Minister D’Arcy will speak at the Asian Financial Forum on the topic “Creating a Sustainable and Inclusive Future: Opportunities and Challenges” and will meet with Financial Secretary, Paul Chan; and Secretary for Financial Services and the Treasury, James Lau. He will also undertake media engagements and meet Enterprise Ireland and IDA clients.

While in Beijing, the Minister will attend a business breakfast, meet with Danny Alexander, Vice President of the Asian Infrastructure Investment Bank and meet with Liu Wei, Vice-Minister at the Ministry of Finance.

Speaking in advance of his visit, the Minister said: ‘The main objective of this visit to participate in the Asian Financial Forum, promote Ireland as a Financial Services investment destination and support Irish companies active in the market. The visit also allows for ensuring high level participation at the European Financial Forum in Dublin Castle on 13th February”.

 

 

ENDS

Monday, 7th January 2019 

Minister Donohoe undertakes official visit to San Francisco and Silicon Valley

The Minister for Finance and Public Expenditure & Reform, Paschal Donohoe TD, will travel today (Monday) on an official visit to San Francisco, California. The purpose of the visit is to highlight the importance of the two-way trade and investment relationship between Ireland and the United States, and to meet with a number of companies in Silicon Valley that have a long-standing and significant presence in Ireland.

 

The Minister will meet with key IDA client companies across the technology and internet sectors and will participate in an Enterprise Ireland event targeting companies in the financial services and fintech sectors. Minister Donohoe is also looking forward to engaging with the Irish business community in the Bay Area, and to meeting members of the Irish community at the Consulate General in San Francisco during the course of his visit.

 

Speaking in advance of his visit, the Minister said: ‘Ireland has been a bridge to Europe for US companies for over 70 years, with over 1,400 international companies having chosen Ireland as their strategic base in Europe. Many of these companies have their headquarters in California and employ significant numbers of people in Ireland. There are now more people employed by International companies in Ireland than ever before, with IDA clients accounting for over 10% of the workforce.’

 

“This is a two-way trade and investment relationship, with a growing number of Irish companies investing and creating jobs across the United States, including in California. I look forward to meeting with Irish businesses during my visit, and to discussing how the Government can continue to support Irish business and strengthen this important relationship.’

 

ENDS

Outline of itinerary in San Francisco:

  • Meetings with IDA client companies;
  • Meetings hosted by the Irish Consulate General with Irish and Irish American business and community leaders in the Bay Area;
  • Enterprise Ireland business breakfast to discuss financial services & fintech.

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe T.D., has today, (Monday) published the Final Report of the Credit Union Advisory Committee (CUAC) Report Implementation Group.

  • Following the CUAC Review of Implementation of the Recommendations in the Commission on Credit Unions in June 2016, an Implementation Group was established in order to oversee the implementation of the recommendations put forward in the CUAC report.
  • The Implementation Group met 18 times between February 2017 and December 2018 and worked through each of the CUAC recommendations, prioritising work on Recommendation 2 (Lending) and Recommendation 3(a) (Consultation and Engagement) during 2017.
  • On completing its term in December 2018, the Implementation Group produced a Final Report, which is being published today. The Final Report summarises the work of the Implementation Group, and highlights developments taking place in the Sector.

Commenting on the Final Report, Minister Paschal Donohoe T.D. remarked: ‘I welcome the Final Report of the Implementation Group and wish to thank them for their work in progressing the CUAC recommendations. I note the many changes that have taken place since the CUAC report and welcome the variety of shared services initiatives emerging from the sector. I believe it is key for Credit Unions to collaborate effectively though such shared service structures to ensure they can provide more services to their members in a timely and cost effective manner’.

“I note that the Final Report contains a number of recommended actions which are the responsibility of my Department. While I will consider the majority of these recommendations in due course, I have asked my officials to begin preparations to make the legislative amendments required to raise the Credit Union interest rate cap from 1% per month to 2% per month, as recommended in the report and previously recommended by CUAC. This proposal will then be brought to Cabinet as part of the legislative process’.

“Of the recommended actions which are the responsibility of the Central Bank, I note that work is progressing on the Review of the Lending Framework for Credit Unions, which is currently under consultation. Review of the Lending Regulations is an important matter and one for which I have previously outlined my support.”

The Minister concluded by saying: ‘2019 should be a successful year for Credit Unions and I welcome the many developments taking place and which are outlined in the Final Report. Should these projects be realised, the sector will materially expand the services being provided to Credit Union members. The Government recognises the important role played by Credit Unions as co-operative, not-for-profit financial services providers and as such I am strongly supportive of a strengthened and growing Credit Union movement. I would encourage Credit Unions to continue to develop their business models, while looking to further provide for both their members and their common bonds, and further fulfil their important role in society.”

 

ENDS

 

Notes for Editors

 

Members of the CUAC Report Implementation Group

The Implementation Group was chaired by the Department and consisted of one member from each of the Credit Union representative bodies – the Irish League of Credit Unions, the Credit Union Development Association, the Credit Union Managers’ Association, and the National Supervisors Forum – along with one member from the CUAC and a member from the Central Bank.

 

Purpose of CUAC Report Implementation Group

The Implementation Group was established on foot of the CUAC Review of the Recommendations in the Commission on Credit Unions Report in order to:

  1. Implement each recommendation within CUAC’s Report in a cohesive manner;
  2. Monitor progress of implementation of those recommendations; and
  • Provide regular updates to the Minister for Finance.

In carrying out these tasks, the Implementation Group will have regard to the impact of the recommendations on Credit Unions.

The Implementation Group was not tasked with addressing legislative or regulatory issues facing the sector other than those recommended in CUAC’s Report, namely:

  1. Tiered Regulation
  2. Lending
  3. Consultation and Engagement
  4. Governance
  5. Restructuring
  6. Business Model Development
  7. CUAC Reports on Interest Rate Ceiling, AGM Voting and Common Bond.

 

Outline of the Final Report

The Final Report summarises the work and views of the Implementation Group regarding the CUAC’s recommendations. It also provides some contextual analysis of recent developments since the CUAC report as well as forward looking views on forthcoming progress in the sector and emerging issues and challenges.

The section on developments since the CUAC report outlines the many changes in the interim between the two reports, with developments in the Regulatory and Supervisory space as well as many positive shared services initiates emerging from the sector. This section also outlines the financial situation facing the sector and the challenges this poses.

The Final Report also sets out the many positive developments in train with a ‘2019 Roadmap’, which points to the material regulatory changes that are either bedding in or due to come into effect over the short term and the imminent expansion of services and products for a large cohort of Credit Unions. As this section points out, 2019 could be an important year for the Credit Union movement.

Notwithstanding this, there are emerging issues and challenges facing the sector which are summarised in the penultimate section of the Final Report.

 

What was the Commission on Credit Unions, and what was the CUAC Report?

The Government established the Commission on Credit Unions on 31 May 2011 to review the future of the Credit Union movement and to make recommendations as to the most effective regulatory structure for Credit Unions, taking into account their not-for-profit mandate, their volunteer ethos and community focus, while paying due regard to the need to fully protect members’ savings and financial stability. The Final Report of the Commission on Credit Unions was presented to the then Minister for Finance on 31 March 2012.

The CUAC Report fulfilled a Programme for Partnership Government commitment to conduct a review, and report by the end of June 2016, on the implementation of the recommendations outlined in the Report of the Commission on Credit Unions.  The CUAC Report identified recommendations made by the Commission on Credit Unions and examined their implementation, having regard to their impact on Credit Unions, and environmental changes that have occurred following publication of the Commission on Credit Unions Report. The report also took account of the spirit/intention of the Commission, the not-for-profit mandate of Credit Unions and their volunteer ethos and community focus, while giving due regard to the need to fully protect members’ savings and financial stability. The need for Credit Unions to develop their business models and grow income in a prudent manner was also considered.

 

Relevant Documents

Report of the Commission on Credit Unions

Review of the Recommendations in the Commission on Credit Unions Report

Credit Union Advisory Committee Policy Paper Publications

 

Contact:

Press Office pressoffice@finance.gov.ie – 01 676 0336

Friday, 4th January 2019

 

Ireland Strategic Investment Fund’s sale of interests in global fossil fuel companies leads the way in green thinking – Donohoe & D’Arcy

Ireland among first in the world to divest from global fossil fuel companies

  •          Completes divestment worth €68m from 38 companies involved in oil, gas and other fossil fuels
  •          Divestment follows the signing into law of the Fossil Fuel Divestment Act 2018
  •          Fund develops list of 148 fossil fuel companies in which it will not invest

Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, and Minister of State at the Department of Finance, Michael D’Arcy TD, have today (Friday) welcomed the Ireland Strategic Investment Fund (ISIF) announcement of its divestment from 38 global fossil fuel companies. The total value of the divestment is €68m.

The divestment follows the enactment of the Fossil Fuel Divestment Act 2018 which was signed into law by the President of Ireland just last month.  

The passage of the Fossil Fuel Divestment Act through the Oireachtas (Irish parliament) was actively supported by both Ministers Donohoe and D’Arcy.

The Act provides for the divestment of ISIF from fossil fuel undertakings (effectively, companies that derive more than 20pc of their revenues from the exploration, extraction and/or refinement of fossil fuels) within a “practicable’’ timeframe. 

Today’s announcement means that ISIF has completely divested from all fossil fuel investments within the meaning of the Act.

Speaking following the announcement, Minister Donohoe said: ‘The passing of this legislation marks Ireland out as one of the first countries in the world to withdraw public money from investment in fossil fuels. It positions the ISIF as one of a handful of sovereign wealth funds globally to implement a fossil fuel divestment strategy’.

Minister D’Arcy said: ‘This is an important step on Ireland’s journey to making a successful transition to a low-carbon economy and signals the importance we attach to taking action on climate change. I commend all involved in bringing this initiative to fruition and for showing leadership on such an important issue.”

Eugene O’Callaghan, ISIF Director, said: ‘Exiting our fossil fuel investments builds on ISIF’s existing investment exclusionary strategy in respect of coal production and processing, tobacco manufacturing, and cluster munitions and anti-personnel mines’. 

“We were pleased to play a constructive role in assisting the Oireachtas during the legislative process and we have moved quickly to divest from fossil fuels following the enactment of the legislation.

“ISIF is a strong supporter of investments that will help Ireland’s transition to a low-carbon economy and we will continue to support renewable energy investments and low-carbon initiatives that are consistent with our mandate.” 

In anticipation of the Fossil Fuel Divestment Act and in line with ISIF’s existing Sustainability and Responsible Investment Strategy, ISIF has developed an initial list of 148 fossil fuel companies in which ISIF will not invest, which has today been published on ISIF’s website. This list will be actively monitored and reviewed. ISIF’s current portfolio included investments in 38 companies on this list and these have now been divested.

ISIF has also begun the process of measuring the carbon footprint of its investment portfolio as part of a wider approach to identify, manage and mitigate climate risk across its portfolio. ISIF’s global equity and corporate bond portfolio outperform the global benchmarks for CO2 emissions, and the carbon emissions associated with the ISIF’s investment portfolio are expected to decline substantially further following today’s announcement. 

As part of his recent strategy review, Minister Donohoe has asked ISIF to focus its investments in Ireland on priority themes, one of which is investments or projects to address climate change.

Separately, as part of its transition from a largely global portfolio into an Irish portfolio, ISIF is investing in Ireland to support the achievement of Ireland’s national carbon transition objectives and the implementation of the State’s climate change obligations. ISIF’s current Irish investments include a range of windfarms, solar power and other renewable energy projects.

ENDS

Thursday, 3rd January 2019

End of Q4 2018 shows strong tax performance & spending being managed within expectations 

  • The Exchequer recorded a small surplus of €0.1 billion last year, the first underlying surplus since 2006. This compares to a headline surplus of €1.9 billion in 2017, which included the impact of the proceeds of the AIB share disposal of €3.4bn. Adjusted for this, the underlying Exchequer balance improvement in 2018 is €1.6 billion.
  • Today’s Exchequer Returns show that tax receipts in 2018 are up almost €4.3 billion (8.3 per cent) year-on-year underpinned by a strong economy;
  • Gross voted expenditure is being managed within expectations, and is up 7.7 per cent in the year, reflecting the Government’s continued commitment to investing in our public services and infrastructure to meet our people’s needs

Speaking about the Exchequer figures today (Thursday) Minister for Finance and Public Expenditure & Reform, Paschal Donohoe T.D., stated: ‘All major tax heads, except excise duties, are up year-on-year, reflecting the growing strength of the economy, while expenditure remains close to Budget day expectations. This means that we are on track to exceed our fiscal targets for 2018, with today’s figures recording a small surplus.’

The main budgetary metric for international purposes is the ‘general government balance’ and this will be reported by the CSO at end-March.  However, based upon the Exchequer figures, a small general government surplus is now possible. A modest deficit of 0.1% was projected in the recent Budget. We are now aiming to deliver a surplus of 0.1%.

Minister Donohoe stated: ‘This strong performance will provide a stable platform for the external challenges that lie ahead in 2019.’ In relation to the significant increase in corporation tax receipts, the Minister remarked: ‘I have requested the Department of Finance to look at potential policy options to mitigate against this well-flagged risk to ensure the sustainability of the public finances. A report on the outcome of this work will issue in the coming period’.

Finally the Minister remarked: ‘Any gains in 2018 against profile represent a positive development in terms of our potential to reduce our overall debt burden. We must continue to prioritise the reduction of debt, which in the event of a shock to our tax base, would assist our fiscal capacity to deal with such an occurrence, putting us in a stronger position to weather potential storms and ensure our economy remains resilient.’

Note to editors:

Powerpoint presentation by DoF officials

Fiscal Monitor December 2018

 

ENDS

Findings reveal degree of spare capacity in the economy today with possible overheating pressures in the years ahead

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, has today (Sunday) welcomed the publication by his Department of two technical research papers on measuring the productive potential of the Irish economy.
Understanding how close the economy is to its potential output level, which is also referred to as the output gap, is an important input into the fiscal policymaking process and management of the economy. It enables the Department to better evaluate the appropriate fiscal stance and the sustainability of public finances over the medium term.

To date, the Department has used a harmonised approach (i.e. common to all EU Member States), which has at times resulted in counterintuitive estimates (for example previous estimates have suggested the presence of capacity constraints in the economy during periods of high unemployment).
The new methodologies, the results of which were published in Budget 2019, provide a much more plausible estimate of the economy’s position in the economic cycle.

The key insights from the Department’s new approach are:

  • The economy would appear to be operating marginally below its potential level in 2018; in other words there is a degree of additional capacity in the economy. This is consistent with limited inflationary pressures in the economy, modest credit growth and a labour market not yet at full employment.
  • It is likely that the economy will reach and exceed its sustainable level of production in the coming years. This is consistent with the Department’s view that the economy will soon reach full employment.

Speaking following the publication of the reports, Minister Donohoe said: ‘I welcome the publication of these research papers today and commend my Department officials for their excellent work carried out in respect of this important issue’.

“Potential output and the output gap are important inputs to fiscal policy making. They enable the Department to better evaluate the appropriate fiscal stance and the sustainability of public finances over the medium term. They are also relevant for assessment of compliance with the fiscal rules under the preventive arm of the Stability and Growth Pact. In this respect, it is important to note that compliance with the SGP will still be based on the EU harmonised approach.”

“I note that the analysis indicates that the output gap is expected to be marginally negative in 2018, which is consistent with limited inflationary pressures in the economy and remaining slack in the labour market at this time. The estimated output gap is forecast to turn slightly positive in 2019 and increases thereafter, pointing to signs of overheating over the medium term, which is something the Government is acutely aware of and remains cognisant of at all times.

“This is why we must focus on maintaining competitiveness-oriented policies, whilst avoiding pro-cyclical policy measures. To this end, the Government is actively building capacity within the economy through increased public capital investment. This targeted investment is designed to address the bottlenecks to growth which emerged during the economic recovery, such as the need for residential development and public infrastructure investment.”

The Government will also continue to implement budgetary policies designed to ensure economic stability and fiscal sustainability. The Government is eliminating the deficit this year – earlier than expected – and are currently establishing the Rainy Day fund. This prudent approach to our public finances will help to mitigate against any future downturn in economy activity.

“We have made exceptional progress in recent years in stabilising our economy, getting people back to work and keeping the train on the tracks. These statistical estimates represent an important additional input to the Department’s overall approach to assessing the economy’s stance and again I thank my officials for their efforts which continue to inform decision making that is in the best interest of the Irish people.”

ENDS

Note to editors
Potential output is often defined as the level of output that an economy can sustainably produce without causing inflation to increase or decrease.

The output gap is the difference between actual output (i.e. GDP) and its potential level.

When the economy produces above its potential level of output, the output gap is positive suggesting that the economy is producing above its sustainable level. When the economy produces below its potential level of output the output gap is negative suggesting that the economy’s resources are being underutilised. Potential output and the output gap cannot be measured directly and must be estimated.

Detailed summary
The Department’s New Publications
The first paper, Measuring an Economy’s Cyclical Position, examines the broad range of methodologies for estimating potential output, and evaluates their respective strengths and weaknesses in order to determine the preferred methodological approach in the development of the Department’s new models.
The paper also contains a review of the main approaches applied by Irish and international institutions in recent years. It finds that there is a diversity of modelling approaches used across institutions with each tending to use more than one approach. Institutional preferences, legal requirements and model complexity appear to be important factors affecting model selection.

The second paper, Estimating Ireland’s Output Gap, describes the methodology the Department uses to produce alternative estimates of the output gap. Consideration is also given to the selection of economic output measures that accurately reflect economic activity in Ireland.

Friday 21st December 2018

 

Minister Donohoe announces commencement of VAT Compensation Scheme for Charities

 

€5m available in 2019 to finance payments under the scheme

 

Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, has today (Friday) announced the making of the Value-Added Tax (Refund of Tax) (Charities Compensation Scheme) Order 2018, which was signed into law on 18 December 2018. 

 

This Order gives effect to the Budget 2018 announcement of a VAT Compensation Scheme for Charities, which will allow charities to reclaim a proportion of their VAT costs based on the level of non-public funding they receive.

 

A capped fund of €5 million will be available in 2019, to finance payments under the scheme in respect of claims of VAT paid in 2018.

 

The terms of the VAT Compensation Scheme as outlined in last year’s Budget are contained in the VAT Refund Order.  These include:

  • Charities must be registered with the Charities Regulator, have tax clearance, and be in possession of up to date audited accounts;
  • A claim must be based on the level of privately-sourced income raised by a charity, so that where a charity’s gross income for 2018 involves 30% funding from State/EU/international organisations and 70% from privately sourced income, they can claim 70% of the VAT they paid during the year;
  • Where the total amount of claims in a year exceeds the capped amount, charities will be paid on a pro rata basis, i.e. where the total value of claims is double the capped pool amount, each charity will receive 50% of their claim.

 

Minister Donohoe said: ‘The VAT Refund Order is the product of significant engagement between officials of my Department and the Revenue Commissioners and the charities sector and I want to thank the sector for its positive contribution to this process’.

 

The facility to make claims under the scheme will be available on Revenue’s Online Service from January 2019. Guidance on the scheme for charities is available on the Revenue Commissioner’s website at www.revenue.ie.

 

Ends

 


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