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New parental leave regulations coming into effect in September

New parental leave regulations coming into effect in September

New parental leave regulations will come into effect on September 1.

Employees will be entitled to 22 weeks unpaid parental leave which is an additional 4 weeks on current entitlements. This will then increase a further 4 weeks to 26 weeks from 1 September 2020.

The new Parental Leave Act also increases the maximum age of the child for whom parental leave can be taken, from 8 years to 12 years.

Melanie Crowley, Head of Employment and Benefits at Mason Hayes and Curran, said the regulations allow for parental leave to be taken in blocks, but most employers come to arrangements with employees allowing them take a day a week if that is the employee’s preference.

“What the legislation provides for, is that the leave will be taken in one block or in blocks of not less than 6 weeks. It’s only then with the consent of the employer that the employee can take a day a week, or something like that,” she said.

A survey of 400 companies conducted by business group, Ibec, found 81% of employers do agree to fragmented parental leave.

For businesses, Ms Crowley does not believe the extension to parental leave will be difficult to implement. “I think any absence is difficult for an employer to manage whether that is sick leave or maternity leave or parental leave. This increase is not enormous. The entitlement was already there. The implementation should already be there, it is just a slight tweak to existing provisions.”

It is not known how many employees avail of parental leave because it is an arrangement between an employer and an employee, and there is no obligation to notify the State.

Anecdotally, parental leave is taken by more women than men. “Parental leave is often something that is tagged on to the end of maternity leave or it is something that a woman takes, reducing her week to a 4 day week.”

Parental Benefit

Under the Government’s Parental Leave Scheme, employees will also be able to avail of two week’s paid parental leave benefit during the first 12 months of their baby’s life. This change is to take effect from November 2019.

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4,920 new homes built between April and June – CSO

4,920 new homes built between April and June – CSO

There were 4,920 new homes completed between April and June, according to the CSO, an 11.8% increase year-on-year.

More than half of those – 2,834 – were part of a scheme, which is classified as a development of two or more houses.

That figure is 2.6% higher than in the same three months of 2018.

Almost 760 apartments were built in the period, up 55.6% year-on-year. Meanwhile there was a 15.5% increase in single dwelling builds, which stood at 1,328 in the quarter.

The figures are based on ESB connections, which may also include older homes that are reconnected.

To counter this the CSO says it uses additional information from the ESB, as well as data from other sources.

It also notes that the figures currently do not cover the growing student accommodation sector, which is treated as a commercial rather than residential connection by the ESB.

The CSO said there were 329 ‘bed spaces’ completed for students in the second quarter, with 6,691 completed since the same period of 2016.

Dublin accounted for 31% of all new dwellings

During the three month period 1,546 dwellings were completed in Dublin, with a further 1,233 completed in the mid-east. Together they accounted for more than half of all new dwellings.

Meanwhile Naas was the Eircode with the most new dwellings in the quarter, with 204 completions registered.

The CSO said the number of ghost estates – many of which were left unfinished after the financial crash – continued to fall, with the number of previously finished dwellings in unfinished housing developments down almost 22% year-on-year.

It said these types of units now made up only 2.4% of all ESB domestic connections, compared to 21.7% in 2014.

The CSO data also shows a 5.8% fall in the average size of new dwellings between the first half of 2018 and this year.

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Business activity growth at 3 month low, according to AIB PMI survey

Business activity growth at 3 month low, according to AIB PMI survey

Business activity in Ireland’s service sector expanded at the slowest pace in three months during July, amid the first reduction in foreign demand since November 2016.

According to the AIB Services Purchasing Managers Index survey, overall new order growth eased to a three month low, as firms commented that Brexit uncertainty had negatively affected customer demand.

As a result of softer demand conditions, service providers increased their payrolls at the slowest pace in over six years.

Meanwhile, the rate of input cost inflation eased to a 16-month low driven by slower raw material price rises.

The headline seasonally adjusted Business Activity Index posted 55.0 in July, down from 56.9 in June and signalling the softest rise in business activity for three months.

At the sector level, Financial Services firms posted the fastest rise in business activity of the four monitored categories.

Central to the slower rise in business activity was a weakening of customer demand conditions both domestically and abroad. Overall new order growth, though solid, eased to a three-month low, whilst export sales declined for the first time since November 2016 and at the fastest pace since July 2009.

Panellists commented that they had observed a drop in UK business resulting from Brexit uncertainty.

According to the index, employment across the Irish service sector continued to increase during July. That said, the rate of job creation softened to the weakest since May 2013.

Service providers commented that they had taken on additional staff in anticipation of higher sales activity later this year. All observed sectors recorded a rise in workforce numbers except Transport & Leisure, which saw a fractional decrease in headcounts in July.

Further solid increases in new orders contributed to another rise in outstanding business in July. The rate of backlog accumulation was solid, but eased to the slowest in three months.

Work outstanding has now increased on a monthly basis since June 2013.

On the price front, the rate of input cost inflation moderated in July to a 16-month low. Nonetheless, cost burdens rose sharply, amid higher transport, fuel and staffing costs.

With input prices increasing at a slower pace, the rate of output charge inflation softened to a three-month low.

Looking ahead, business confidence was the lowest in three months, as Brexit uncertainty weighed on sentiment. Just under 43% of panellists were confident of a rise in business activity from present levels in 12 months’ time, linked to expectations of higher sales activity and new product developments.

Oliver Mangan, AIB Chief Economist, said business activity in the sector continued to expand at a strong pace in July. “Although, the headline index reading of 55.0 was lower than the 56.9 level registered in June and represented the slowest pace of expansion in three months. The Irish level is well above the flash services July PMIs of 53.3 and 52.2 for the Eurozone and US, respectively. This indicates stronger growth in the Irish economy.

“New orders growth was solid, however, the pace of increase did also slow to a three month low,” Mr Mangan said. “Meanwhile, export orders contracted for the first time since November 2016, with a decrease in orders from the UK owing to Brexit uncertainty acting as a headwind. The service sector continued to create jobs, albeit at the weakest pace since May 2013 amid softer demand conditions.”

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European debt rally pauses at start of a big week for bond markets

European debt rally pauses at start of a big week for bond markets

Core European government bond yields steadied on Monday after posting their biggest weekly drop in seven weeks as investors consolidated positions before a central bank policy meeting this week where policymakers might unveil plans of more rate cuts.

Though hopes have grown that the ECB might cut its deposit rate as soon as Thursday to soften the impact on the euro from a much-awaited Fed rate cut, market watchers say policymakers will change its forward guidance before taking fresh steps.

Money markets are assigning a 55pc probability of a 10 basis points deposit rate cut with a Reuters poll expecting the ECB to change its forward guidance towards more easing this week and move to cutting interest rates only in September.

As a result, German bond yields for 10-year maturities were broadly steady at minus 31 bps in early London trading and within striking distance of a record low of minus 40 bps hit earlier this month.

Spreads between benchmark US debt and corresponding German bonds were broadly steady at 273 bps.

Barclays strategists note that although hope of more ECB easing has increased since ECB President Mario Draghi’s June speech in Sintra, downside risks to the eurozone economy have not increased over that period.

Moreover, the Fed is also expected to cut rates by only a quarter point, compared to some bets of a half point rate cut.

“Therefore, we do not think Draghi will want to soften his easing bias from the Sintra speech…President Draghi is very likely to prepare the ground for a broad easing package in September,” they said in a weekly note.

Ongoing tensions between Britain and Iran over the seizure by Iran of an oil tanker is also set to keep demand of safe-haven core European debt intact.

Markets were also watching for political developments in Italy after tensions rose in the ruling coalition party last week, raising concerns that the increasingly unwieldy government might collapse.

Though Italian bonds have also broadly been the beneficiary of expectations of more ECB policy stimulus, with yields on 10-year debt falling by 120 bps since mid-May, the rally has stalled since late last week.

“We need to watch for more developments on the Italian political situation,” said Daniel Lenz, a rates strategist at DZ Bank in Frankfurt.

On a technical note, primary market activity is likely to remain slow with only Belgium and Italy to sell bonds this week though the net issuance of €4.5bn-€6bn is expected to be more than offset by inflows from redemptions and coupon payments, according to strategists at Unicredit.

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First-time buyers feel ‘pushed out’ by bulk investors

First-time buyers feel ‘pushed out’ by bulk investors

Fianna Fáil is calling on the Government to restrict tax incentives for institutional investors in the Irish property market.

The party said so-called “cuckoo funds” have given rise to entire housing developments being snapped up, locking out first-time buyers.

A review by the Department of Finance into the amount of tax paid by these investors is due to be completed next month.

However, the department said institutional investors make up a very small proportion of the residential market.

Figures from Savills Estate Agents show that almost 3,000 properties were block-purchased by investors last year.

The agency said 234 properties were sold in bulk to investors in the first quarter of this year.

However, some prospective home buyers argue that large investment funds, which purchase properties in bulk, could be making it harder for families to get a house or apartment.

Nicola McCann, from Donabate in Dublin, and her partner are first-time buyers and are struggling to get onto the property ladder.

The couple and their young son moved in with Ms McCann’s partner’s family two years ago in order to save a deposit.

“It has been pull your hair out stressful, like our eight-year-old son is sleeping on a bean bag in his Nana’s room at the end of her bed.

“In Donabate there are so many new houses and then you go and look online and they’re all after being sold to private investors,” she said.

Ms McCann said they are saving nearly €2,000 every month to try to secure a deposit.

“It’s people like us and our friends that are now stuck and are being pushed out of where they want to live because we can’t afford it.”

New regulations being proposed by Fianna Fáil would give local authorities the power to restrict the number of properties being sold for rent.

The party is also calling for a full review of the tax treatment for institutional investors.

Fianna Fáil’s Housing spokesperson Darragh O’Brien said the 2013 Finance Act brought in by the Fine Gael and Labour government makes Ireland an attractive country for funds to do business in.

He said: “They don’t pay capital gains tax, they don’t pay tax on their profits and they don’t pay tax on their rents so why wouldn’t you invest”.

In a statement, the Department of Finance said many collective investment structures are designed so that the tax is payable by the investor or shareholder, rather than within the collective investment vehicle itself.

It said this is the case with Real Estate Investment Trust companies and with funds invested in real estate assets.

The department said that in both cases a withholding tax is applied to ensure tax is collected.
Chief Economist with the Sherry Fitzgerald Group Marian Finnegan said investment funds are an essential ingredient to the property market.

“I think they are a great new addition to the property market.

“We have seen over the last five or six years an emerging trend of Private Residential Investment funds coming into the marketplace.

“They are a very small percentage of the market and represent a very tiny percentage of overall transactions, but they are beginning to provide much needed rental accommodation and that is good news”.

Asked if there was a risk the funds would push first time buyers out of the market, she said: “Absolutely not if you look at the figures for the first quarter they bought in the hundreds and not the thousands in terms of property numbers.

“They are really just a very small proportion of the market overall. ”

Mr O’Brien said the State is also buying properties in bulk, which he said is having an impact on first-time buyers.

“It’s impossible for a potential first time buyer right now to compete against large pension funds on one side and the State on the other because the State is also buying up about 3,000 properties a year where first time buyers would want to buy.

Figures show the Government bought an estimated 2,600 properties from the open market last year.

474 properties were bought by the State in the first quarter of this year.

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Road freight tonnage increased by 1.4% in 2018

Road freight tonnage increased by 1.4% in 2018

A total of 149.2 million tonnes of goods was transported by road last year, new figures from the Central Statistics Office show, an increase of 1.4% on the 2017 total.

But the CSO said that activity measured as weight by distance was 11,445 tonne-kilometres in 2018, a decrease of 2.7% compared with 2017.

The total distance covered by road freight transport in 2018 was 1.6 billion kilometres.

The commodity group “Quarry products, metal ores and peat” represented 28.1% of all tonnes carried during the year.

Today’s CSO figures also show that a total of 32.8 million tonnes of goods was transported by road in the fourth quarter of 2018 – a drop of 7.9% on the same time in 2017.

There were an estimated 118,032 Irish registered goods vehicles (greater than 2 tonnes unladen weight) operating in Ireland and abroad in 2018.

This marked an 8.8% increase on 2017.

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UK car industry warns next PM no-deal Brexit is not an option

UK car industry warns next PM no-deal Brexit is not an option

Britain’s car industry has warned the next prime minister against a “seismic” no-deal Brexit in October, which it said could add billions of pounds in tariffs and cause border disruption, crippling the sector.

Boris Johnson, the frontrunner to succeed Theresa May, and his leadership rival Jeremy Hunt, have said they are prepared to take Britain out of the EU without a deal on October 31.

Both have said, however, that this is not their preferred option.

Industry body the Society of Motor Manufacturers and Traders (SMMT) warned about the scale of disruption a disorderly exit would cause.

“Leaving the EU without a deal would trigger the most seismic shift in trading conditions ever experienced by automotive, with billions of pounds of tariffs threatening to impact consumer choice and affordability,” it said.

The UK automotive industry fears that a disorderly exit from the EU, its biggest export market, could see the imposition of tariffs of up to 10% on finished models and border delays which could snarl up ports and motorways, ruining just-in-time production.

A hard Brexit border could cost £50,000 a minute in border delays, the SMMT said.

“The next PM’s first job in office must be to secure a deal that maintains frictionless trade because, for our industry, ‘no deal’ is not an option – we don’t have the luxury of time,” SMMT chief executive Mike Hawes told a conference.

The UK car sector, rebuilt by foreign manufacturers since the 1980s, had been a runaway success story in recent years.

But since 2017 sales, investment and production have all slumped, blamed on a collapse in demand for diesel vehicles and Brexit uncertainty.

Brexiteers have long argued that the EU’s biggest economy Germany, which exports hundreds of thousands of cars to Britain ever year, would do its utmost to protect that trade.

The British car sector has faced a series of setbacks this year including around 4,500 job cuts at Jaguar Land Rover (JLR) and plant closure announcements from Honda and Ford.

Several investment decisions are also due, including whether JLR will build electric cars in its home market and whether Peugeot will keep its Vauxhall car plant open.

“If the right choices are made, a bright future is possible,” said Hawes. “However, “no deal” remains the clear and present danger,” he added.

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Report suggests new agri-food area for Ireland, UK

Report suggests new agri-food area for Ireland, UK

A new shared food safety and animal health area taking in the island of Ireland and the island of Great Britain as a whole should be created to prevent the Irish backstop taking effect, according to a report by a UK non-government body of MPs, academics, trade and customs experts.

The report suggests that such an arrangement would mean remove the need for customs, food safety and animal health checks between north and south, or between the island of Ireland and Great Britain.

However, Irish officials have flatly dismissed the idea as tantamount to Ireland having to leave the EU’s single market for agriculture and food safety.

The Alternative Arrangements Commission has set out a range of proposals that it claims would avoid the backstop taking effect in a 206-page interim report published today.

The commission is a privately funded organisation, which seeks to replace the backstop with other solutions in order to ensure that the Good Friday Agreement can be preserved, but that post-Brexit the UK will also in all circumstances have an independent trade policy.

The commission’s work is supported by a significant number of eurosceptics and DUP MPs, although it is headed by two Conservative MPs, Nicky Morgan and Greg Hands, who voted remain in the 2016 referendum.

The group’s interim report says that so-called alternative arrangements to the backstop should be “fully up and running within three years”.

These would include harnessing “existing procedures and technologies and customs best practice”.

It recommends the creation of Special Economic Zones on the Irish border and a “multi-tier trusted trader programme for large and medium-sized companies”, with exemptions from customs checks for smaller firms.

The report suggests that so-called Sanitary and Phyto-Sanitary (SPS) checks – i.e. animal, plant and food safety checks that would normally apply on an EU-third country border – should be carried out by “mobile units away from the border using the existing EU Union Customs Code or a common area for SPS measures”.

The AAC says a legal protocol should be “inserted into the existing Withdrawal Agreement”, or “utilised in any other Brexit outcome”.

Once Britain leaves the EU it will become a third country for trade purposes.

The UK believes that the future relationship negotiated with the EU, and/or the technology, trusted trader schemes and other such exemptions, will guarantee no hard border on the island of Ireland.

However, the EU and Ireland have insisted that a “backstop” is needed if those solutions work, and that it should apply “unless and until” some legal arrangement is found that guarantees no return to any hard border, the avoidance of related checks and controls, and the preservation of north-south cooperation.

The backstop is enshrined in the Withdrawal Agreement concluded between the EU and UK last November.

However, the treaty has been rejected three times by the House of Commons and was instrumental in the resignation of Theresa May.

Both sides have pledged in the Withdrawal Agreement, and its accompanying political declaration on the future relationship, to exploring “alternative arrangements” to the backstop.

But the EU insists that if they are not found to work, then the backstop – essentially Northern Ireland remaining in the EU’s single market for goods, with the UK as a whole remaining in a Customs Union with the EU – should apply until a legally operable solution is found through a free trade agreement.

Today’s interim report from the AAC says that “all future proposals must be based on the principle of consent” in Northern Ireland, and that “derivative of this, there can be no physical infrastructure at the border and no related procedures and controls at the border”.

However, the report recommends checks and controls happening “away from the border” where necessary, using, for example, “mobile SPS control”.

The AAC also says all sides should “understand the need for an executable and real UK independent trade and regulatory policy”.

Critics of the backstop suggest that it could result in the UK being trapped in the EU customs union if future free trade negotiations break down. The EU disputes this.

The AAC paper states: “There is no one solution to the Irish border – we propose a multi-layered approach, involving many different mitigations. We seek to give traders as many choices as possible.”

It suggests that exemptions under WTO rules could apply at the border based on national security and “frontier traffic exemptions”.

However, the most controversial suggestion is that Ireland would join the United Kingdom in a common area for animal health and food safety.

This area then would be “equivalent” to the EU’s legal regime governing these so-called SPS sectors by way of a “common rulebook”. It would be based on the Australia-New Zealand Food Safey Area.

The AAC states: “Such a common area would ensure no customs registration procedures within the islands as is the case for the Common Travel Area for people but would mean customs procedures being introduced between [Ireland] and the EU-26 (as is the case for people now) if the whole area diverged from the EU SPS rules in ways that were unacceptable to the EU.”

If the UK did diverge from EU rules, the paper suggests, the Ireland “could break” with this new common area.

Then, the paper suggests, the Northern Irish Assembly could “determine if NI remained within the all-Ireland common SPS area or stayed within the diverging UK SPS area”.

The AAC suggests that Ireland would have an interest in creating a two-island SPS area because it would make the Dover-Calais frontier more frictionless.

“…The economic data… shows that a significant volume (at least 70%) of trade into the EU-26 flows across the UK land-bridge. The vast majority of this trade ultimately enters the continent via Dover-Calais routes.

“The Irish Government therefore has a strategic interest in making sure the land bridge works (Dover-Calais).”

However, the idea has been swiftly rejected by Irish sources.

“There is absolutely no way Ireland is going to be dragged out of the single market by the UK leaving the EU, and left with this terrible decision in a couple of years time if Northern Ireland changes its rules,” says one source. “What do we do then? We’re left with the mess. It’s utterly unattractive.”

The commission also suggests lessons can be learned from other borders around the world, including the US-Canada frontier, where “the CSA Platinum programme allows highly trusted companies not to deal with customs at all (by filling out the equivalent of tax returns)”.

“These sorts of arrangements are particularly suitable for the Irish border and the largest companies that use it.”

If there was no common SPS area that would mean agri-food products and live animals moving north and south across the border would be subject to checks and veterinary certification procedures via EU-approved Border Inspection Posts (BIPs).

The report suggests these border posts could be moved “away from the border” and that “mobile units” could conduct checks where possible.

Currently, no such checks are required as both the UK and Ireland are in the EU.

The report also recommends a multi-tiered “ladder” system be applied to the current Approved Economic Operator (AEO) system.

Under customs and trade rules, in certain circumstances large “trusted traders” can be exempt from certain customs formalities.

However, most observers believe that the expense and the nature of Northern Ireland’s SME and micro-business economic profile means that AEO status would be out of reach for most companies, especially those that trade in agri-food across the border.

The AAC report suggests that the biggest traders would only have to submit papers on a quarterly basis, with “benefit packages” for those smaller companies on the lower end of the “ladder”.

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Consumers spent €1.7 billion online in March

Consumers spent €1.7 billion online in March

New figures from the Central Bank show that there are more payment cards than people in this country, with just over six million active credit or debit cards in circulation.

In the first three months of the year, Irish people spent just over €1.7 billion using those cards – that is equivalent to the Government’s health budget for the whole year.

The Central Bank figures show that for every €10 we spent using a costly credit card, we spent €53 with a debit card.

In that three month period, Irish consumers conducted 244 million point of sale transactions using debit cards – that does not include taking cash out of ATMs .

The average spend using a debit card was just over €40.

Using credit cards, consumers here made 34 million transactions, with an average spend of €80 – suggesting that consumers use credit cards for more expensive things.

Debit card spending grew by 19% year on year in March, while credit card spending grew by 10%.

The Central Bank figures also reveal that Irish consumers are spending more on online shopping as well.

Consumers bought €1.7 billion worth of stuff on the internet in March alone – that is the cost of the National Children’s Hospital spent in just one month.

Online shopping now accounts for half of all credit card spending and a quarter of all debit card spending.

According to the Central Bank, we are also spending more on overseas trips.

On average €0.5 billion a month went through credit and debit cards physically used outside of Ireland, including ATM withdrawals.

That amounts to a total of €1.6 billion spent abroad in the first three months of the year, 7% more than the same time last year.

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Join industry leader groups to get inspired

Q: I run two successful cafes. I don’t have a lot of space in either and I am really challenged when parents arrive with buggies and young children. How can I handle this delicate issue?

A: This is indeed sensitive. You run the risk of not only alienating parents, but also their family and friends. When I ran Superquinn, we embraced parents with children in every possible way. In fact, we positively discriminated in their favour.

We removed sweets from the checkouts to prevent rows, we provided supervised play facilities to allow mum or dad to shop unstressed, and entertained school tours at our bakeries so children could learn and we could immerse ourselves in the local community.

I understand the space restrictions, but I have seen cafes doing some innovative things which might help. Several have a dedicated number of mornings per week when they encourage parents with children to come and they remove some of the tables and chairs to allow room for buggies for a number of hours at a quieter time. While this doesn’t stop someone wandering in of their own accord, it does encourage those with children to come at a time which is child friendly.

Training staff to take some practical measures would also help. For example, if you have a storage area, perhaps staff can offer to put buggies away and assist parents with seating and ordering.

Other cafes provide distractions such as tablecloths and crayons for children to drawn on, or even a specific tiny play corner which keeps the children occupied while the parents eat. My advice is to make your response one of proactive management, rather than thinking about imposing some sort of ban that could have dire consequences on your business.

Q: As a young managing director of a successful company, I am unclear how I keep my role fresh and can use it to guide the company to success.

A: Congratulations on taking on a challenging role at a young age. There are lots of debates about what makes companies successful, and these centre on having the right product to offer, the right team, great marketing. But while all of those things are important, if you don’t have strong leadership within a business it may not succeed.

Your single biggest role will be to keep the business energised and challenge those around you to strive for perfection. The biggest problem you are going to face is that you will have no one to challenge you, and the role of managing director can be isolating.

I suggest you join a number of industry leader groups which will help to inspire you. Those leaders don’t necessarily have to be from your sector. The fact you are sitting with other senior level people will be inspiration in itself.

During my decades of running Superquinn I travelled extensively as I found that, in the majority of cases, for every problem we faced someone else around the world had solved it already.

Think about how you want to spend your typical week too. It is all too easy to get caught up in meeting after meeting and, before you know it, months have gone since you have last spoken to the customer. Whether that is a business-to-business customer or a consumer coming through the front door, you need to have some mechanism to keep in touch with the grass roots.

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