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Irish Independent
a day ago
- Business
- Irish Independent
Cut the Vat rate on new apartments to 5pc, Ibec proposes
In a pre-budget submission, Ibec says there is a clear social need to improve the viability of apartment building in Ireland, as completions fell by 25pc last year and the construction pipeline has slowed to a crawl. 'Direct costs imposed by the State, such as Vat and development levies, are the most direct mechanism to reduce costs of delivery in the very short term,' the submission said. Sales of new apartments by developers currently qualify for a reduced Vat rate of 13.5pc. Development levies are paid to councils, and are intended to fund infrastructure such as water and roads. Each council sets its own rate. The levies were suspended for a time last year, leading to a temporary spike in the number of housing commencements. Gerard Brady, the chief economist at Ibec, said its proposal would cut the cost of building an apartment by €50,000 to €60,000, and would cost the Exchequer about €86m overall. 'It's hard to know how many apartments will be built this year at all, because of viability,' he said. 'The regulatory changes on redesigning will lead to more apartments in the long run, but developers might need to go back to planning, so the number might slow in the short term.' On the general economic position, Ibec said the budget-day package should be a maximum of €3bn net this year, with about €232m of new measures paid for out of the National Training Fund surplus and €1.3bn in new infrastructure spending. 'The current environment at a global level is one of slower growth and an increased risk of instability in global debt markets,' the submission said. 'Ireland is in a good position in terms of our headline debt and deficits. However, much of this position has been funded by a single source – corporate tax.' Ibec pointed out that the Irish government has collected €113bn in corporate tax revenues since 2019. While some countries that are investment hubs – such as Switzerland and the Netherlands – have also seen significant rises in corporate tax, Ireland is an outlier. The amount of corporate tax per worker here has risen from $3,080 in 2014, which was broadly in line with similar countries, to $9,743 in 2023. If Ireland had stayed in line with the likes of Switzerland and the Netherlands, it would have collected €45bn less in tax over that decade. 'If Ireland only collected a similar amount of corporate tax per worker as comparable economies, then every worker in the country would need to pay €4,000 per year more in income or other taxes,' it said. 'In Ibec's view, a sensible economic policy would aim to return to a balance of income over expenditure, were our corporate tax receipts to be realigned with other mid-sized globalised economies. In 2025, that gap is around €5bn.' Ibec is proposing an improvement to the R&D tax credit as a way of attracting and embedding high-value activity in Ireland.
RTÉ News
a day ago
- Business
- RTÉ News
Budget 2026 must be 'sensible and prudent'
Business group Ibec has said Budget 2026 must be "sensible and prudent" given the fragile global environment. Launching its pre-budget submission, it urged the Government to take a "measured and strategic approach". The group has also called for targeted investment in areas that enhance productivity and competitiveness. It said sound economic policy must focus on restoring a balance between income and expenditure over the coming years and reduce the over-reliance on volatile tax receipts, such as corporation tax. Ibec also warned that "persistent or emerging tariffs pose a serious threat to Irish business" and it said the economic model Ireland has relied on for the past 50 years is under serious strain. It said while the broader economy may remain resilient, "some sectors will suffer significant and lasting damage to competitiveness". As part of its submission, Ibec said such impacted businesses and their employees must receive targeted support, such as measures on PRSI and trade supports. Ireland needs to 'make right choices' Ibec's Chief Economist and Head of National Policy Gerard Brady said the budget must be framed in the context of ongoing trade tensions and recent US tax reforms Mr Brady said Ireland needs to "make the right choices to safeguard our competitiveness and ability to attract and retain business". "That means investing in productivity focused areas like infrastructure and committing to continue that investment regardless of the economic climate," he added. Ibec also said the high cost of doing business here needs to be addressed and it said more needs to be done on skills and innovation. Mr Brady urged the Government to use funding from the National Training Fund "to make sure that we're investing in skills, particularly at a time where there's significant change in the labuor force due to AI and other new technologies." Mr Brady said: "Ireland still falls short of where it needs to be as an innovation leader and R&D performer." In order to assist in attracting investment, he called on the Government to enhance and widen the scope of the R&D tax credit, which he believes would make Ireland "more attractive investment, both for Irish companies and for multinationals". "Other measures take time to see the benefits for business on things like infrastructure and skills. R&D tax credit would work 1 January," he added. He said the scheme should be expanded to include process innovation, AI, and green technologies. "Allow application to offshore related-party research (with safeguards), provided IP and value remain in Ireland." €3bn budget package proposed Among the other measures in its submission, Ibec has proposed a budget package of €3bn, including €1.3bn in additional infrastructure spending under the National Development Plan. And the business group has called on the Government to "maintain a strong, predictable capital investment pipeline". It said public investment should be "prioritised above all other fiscal commitments." In relation to tariffs, Ibec's Executive Director of Lobbying and Influence Fergal O'Brien said the group is hoping for a framework agreement. Mr O'Brien said Budget 2026 is going to be "predominantly about the stress and pressure in our traded economy, and the uncertainty that the potential global trade war continues to have on the economy". He said the 10% rate, which is currently in effect, is "materially hurting" low margin businesses particularly in the food and drink sectors. "That 10% hurts, especially when you layer it on top of the dollar weakness of pretty much the same scale that we've seen since the start of the year." Mr O'Brien said if the threatened 30% tariff did become a reality, "it will be extremely damaging". He said Ibec members also have "a lot of concerns" about what countermeasures will be introduced by the EU.
Irish Examiner
a day ago
- Business
- Irish Examiner
Ibec said Government should aim for balanced budget without additional corporation tax receipts
Business group Ibec has called for the Government to produce a balanced budget later this year, which does not rely on excess corporation tax receipts and makes investment in infrastructure its number one fiscal priority. In its pre-budget submission, Ibec has recommended a budget day package of €3bn, with an additional €1.3bn in infrastructure spending under the National Development Plan. Within this infrastructure spending, it is calling for an additional €250m to fund water and wastewater infrastructure. To incentivise the building of apartments — of which there has been a significant falloff in recent years — Ibec is seeking a reduction on Vat on new-build apartments to 5%, as well as discontinuing levies on new-build apartments. This will cost €86m, according to the business group. It is also calls for the Government to resource a single-entity to take on 'the statutory powers of oversight, co-ordination and prioritisation of large infrastructure projects through the planning and consenting systems'. On the tax side, it is seeking to index the top tax band to wage growth by increasing by €2,000, as well as adjustment to tax credits It is also calling for the introduction of a National Training Fund voucher scheme to engage more employers in workforce development. Ibec chief economist Gerard Brady said if Irish corporation tax receipts per worker were on par with tax receipts in other globalised countries such as Switzerland and the Netherlands, then the Government would be running an underlying budget deficit of €5bn a year. He said it was 'really important' in this budget, and other forthcoming budgets, that 'we set out a really strong framework for multi-annual funding of infrastructure'. 'That we make it very clear that above any other fiscal priority, that infrastructure takes the number one in that list, and that it is protected.. We need to be very clear on that to be able to get the capacity into the economy to deliver on major infrastructure projects,' he said. Mr Brady said the budget must be framed in the context of the ongoing trade tensions and tax reforms in the US. We need to make the right choices to safeguard our competitiveness and ability to attract and retain business." The group's pre-budget submission comes after US president Donald Trump announced he would implement a 30% tariff on EU goods entering the US from August 1, which could have a significant impact on the country's exports. Fergal O'Brien, executive director of lobbying and influence at Ibec, said this was a budget that was going to be 'predominantly about the stress and pressure in our traded economy and the uncertainty that the potential global trade war continues to have on the economy'. Mr O'Brien said the upcoming budget needed to be 'sensible' and 'prudent', that moves the country back towards an 'underlying balance' when excess corporation tax receipts are not accounted for. On the issue of tariffs, Mr O'Brien said even the current US tariff rate of 10% was 'materially hurting a lot of businesses' particularly in the food and drink sector of the economy. Adding to the pressure on these businesses is the growing strength of the euro against the dollar, which is increasing export prices. Read More Two pubs a week now closing in Ireland, one in three in Cork and Limerick gone since 2005
Irish Daily Mirror
17-06-2025
- Business
- Irish Daily Mirror
Housing Minister to bring emergency legislation to Cabinet to extend RPZs
Emergency legislation to extend Rent Pressure Zones nationwide will be brought to Cabinet this Tuesday morning by Housing Minister James Browne. It follows criticism from the opposition that the plans to extend the Rent Pressure Zones (RPZs) nationwide were not brought to Cabinet last week as part of the Government's plans to change the rental system. It is understood that Minister Browne will see the publication of the Residential Tenancies (Amendment) Bill 2025 as 'emergency legislation' that can be 'progressed as a priority.' This will extend the RPZs to all areas of the country until February 2026, ahead of the new rent controls coming in from March 1. This will protect approximately 17% of tenancies nationally that are currently outside RPZ, sources said last night. Currently, those outside RPZs are not protected by a restriction on rent increases, other than not charging above market rent. Sources stressed that almost 200,0000 current tenancies will 'not be impacted whatsoever' by the measures proposed by Government. They will see their current 2% rent pressure zone cap remain, and will not have their rents reset every six years. The Irish Mirror understands that the legislation will be placed on the Dáil schedule 'almost immediately' once it is approved by Cabinet. It is also understood the 'role and remit' of the country's Land Development Agency (LDA) will be expanded by a decision at Cabinet brought by Minister Browne. Government is set to agree to enable the LDA to secure additional housing. It is also understood the Cabinet will agree that project level commitments by the LDA would no longer have to be reviewed by NewERA to ensure speed and efficiency. Under the plans, the LDA will now support a wider area of homes delivery beyond the current locations of the LDA remit and seek out and activate additional and strategic public land sites to deliver, such as urban brownfield sites. It will for stronger land transfer powers owned by commercial state bodies, particularly when it comes to underutilised State lands and the LDA will work with Browne's housing activation office in master planning. Policy and legislative changes will now be finalised and a memo will be brought to Government in the near future. It is understood that former HSE Chief Paul Reid is expected to be named as the chairperson of the newly overhauled An Coimisiún Pleanála, which will replace An Bord Pleanála. Higher Education Minister James Lawless will bring the Heads of a Bill to unlock €1.5bn for the National Training Fund. This will see €650m in core funding package for Higher Education (€150m per annum). It will also include €600m capital uplift including €150m to provide training facilities in the areas of Veterinary, Medicine, Nursing, Pharmacy and Dentistry, €150m for the upgrading and decarbonisation of the third level estate, €150m capital funding for the Further Education and Training Sector and €150m for research including research infrastructure and an increase in the PhD stipend. The Bill will also contain €235m in one-off current funding for skills and apprenticeships. Social Protection Minister Dara Calleary will bring an amendment to the Bereaved Partners Bill, which will 'tackle economic crime'. It will allow a Social Welfare Inspector or an Authorised Officer from the Department of Social Protection to, at the behest and invitation of An Garda Síochána, participate in the interview of a detained suspect regarding offences under the Social Welfare Act. Minister for Agriculture Martin Heydon will update Cabinet on the first interim report by the Timber in Construction Steering Group. which Minister Michael Healy Rae has also been working on. It recommends that Ireland needs to use more wood in construction and we 'embrace' best practice in countries where timber is the material of choice. It should also look toward a 'Wood First' procurement policy advocating for all publicly procured buildings to be constructed using materials primarily of timber and other bio-based products. Finance Minister Paschal Donohoe will seek approval for committee stage amendments to the Local Property Tax Bill, including one that relates to property adapted for use by disabled persons. This will provide for a reduction of €105,000 in the chargeable value of a property which has been adapted for use by a disabled person, subject to certain criteria being met. This is an increase from €50,000 in the 2012 Act. Taoiseach Micheál Martin, alongside Minister Donohoe and Public Expenditure Minister Jack Chambers, will look to publish the Analysis of Well-Being in Ireland report for 2025, which will be used to help set out priorities for Budget 2026. It uses a dashboard of 35 indicators of well-being divided across 11 sections. The report shows the progress Ireland has made over the past five years, both in terms of the trend and in comparison to international peers. Progress was seen in Income and Wealth; Connections, Community and Participation; and Work and Job Quality. The analysis also identifies areas where work is needed, highlighting that unemployed people, younger workers, people in bad health, single-parent households, lower income households, and renters paying market rates are faring less well than other groups in society. Elsewhere, Tánaiste Simon Harris will outline the preparations underway for Ireland's presidency of the European Union next year. During the presidency term there will be 23 informal Ministerial meetings hosted in Ireland and a quarter of them will be held outside Dublin. There will also be a summit of the European Political Community and an informal meeting of the European Council, both of which will take place in Dublin.
Irish Examiner
16-06-2025
- Business
- Irish Examiner
Back-to-school payments to be extended to children in foster care
Back-to-school payments are set to be extended to benefit the 2,300 children currently in foster care. Minister for social protection Dara Calleary will seek Cabinet approval today, Tuesday, to extend the back-to-school clothing and footwear allowance to those who are in receipt of Foster Care Allowance. The once-off payment for 2025 is €160 for children aged between four and 11 on or before September 30, while those aged 12-22 years will receive €285. Social protection minister Dara Calleary is seeking Cabinet approval to extend the clothing and footwear allowance to those in receipt of Foster Care Allowance. File picture: Brian Lawless/PA Occupied Territories Bill The Occupied Territories Bill had been expected to be brought to Cabinet today, Tuesday, but has been delayed by a week. Local Property Tax Bill Finance minister Paschal Donohoe will seek approval for amendments to the Local Property Tax (LPT) Bill including one that will change how the tax is calculated on homes adapted for use by people with disabilities. Cabinet will hear that it will provide a reduction of €105,000 in the chargeable value of a property that has been adapted. This is an increase of €50,000 on the previous act and would come into effect on November 1. As a result, people with disabilities and living in an adapted home will assess the value of their property at one valuation band lower when calculating their LPT charge. National Training Fund Higher education minister James Lawless will seek to unlock the National Training Fund package of almost €1.5bn when he brings the heads of the bill to Cabinet. The package would provide €650m in core funding for higher education; €150m to provide training facilities for veterinary, medicine, nursing, pharmacy and dentistry students; €150m capital funding for the further education and training sector; and more. The amendment will allow Mr Lawless to bring the legislation before the Dáil and commence spending from the fund in 2025, if approved. North-South Ministerial Council Ahead of a meeting of the North-South Ministerial Council in Armagh this Friday, Mr Martin and Mr Harris will brief Cabinet on the agenda which will include trade and AI. The meeting, which will be attended by most ministers, will also discuss infrastructure investments and tackling gender-based violence. Well-Being Framework Analysis Meanwhile, Taoiseach Micheál Martin will bring a memo on Ireland's Well-Being Framework Analysis for 2025, which is due to help outline Government's priorities for the upcoming budget. The report itself highlights a number of groups who are faring worse than others in society, including renters paying market rates, unemployed people, younger workers, people in poor health as well as lower-income households. However, the report does show progress in other areas, including on income, work and job quality and community participation. Presidency of EU Ahead of Ireland's presidency of the European Union next year, Mr Harris will outline the significant preparations already underway. Over the course of the presidency, 23 informal ministerial meetings will be held in Ireland with a quarter of them to take place outside of Dublin. The European Political Community summit will mark the largest meeting Ireland has ever hosted involving leaders of 47 states as well as heads of EU institutions and international organisations. Mr Harris will tell Cabinet that delivering a successful presidency is essential to Ireland's position, influence and reputation in the EU. Work to decide Ireland's policy priorities for the presidency will intensify in the autumn but there are plans for a programme of community, youth and schools engagement around the presidency, which will have a particular focus on children and young people. National Digital Research Centre Minister for enterprise Peter Burke will bring a memo to Cabinet indicating that the National Digital Research Centre (NDRC) is to extend its current contract with current provider DogPatch Labs until 2026. The decision to extend was taken to provide certainty to companies supported by the NDRC ensure there is no break in coverage while Mr Burke works with his department and Enterprise Ireland on the successor programme which will take over in 2027.
