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01 May 2019

Insurance revamp calls intensify as play centres saved by UK deal

THE Government has been urged not to ease up on insurance reform after 1,000 jobs were saved when play centres secured insurance cover.

Some 61 play centres were threatened with closure over difficulties getting insurance.

The Alliance for Insurance Reform said there was still a need for major changes in the insurance and legal sectors.

Meath businesswoman Linda Murray has managed to keep her play centre in Navan open by securing insurance for her firm, and 60 similar facilities across the country.

Soaring premiums and the reluctance of some insurers to quote businesses for cover because of false and exaggerated claims meant the play centres could not get cover.

Ms Murray broke down when she told TDs and senators on the Oireachtas Finance Committee about the situation.

She begged committee members: “Save our livelihoods, save the livelihoods of our staff, and give our children somewhere to play.”

Ms Murray feared her play centre would have ended up shutting with the loss of 12 jobs. Insurers were quoting a premium for the next year of €16,500, a 1,000pc rise in the past five years.

She started up a group of 61 play centres, called the Play Activity and Leisure Ireland (PALI). That group has now persuaded an insurance broker to get a UK provider to write policies for all of them.

“We presented ourselves as a group and approached five in Ireland and 15 in the UK and two of the insurance companies in the UK agreed to underwrite us,” she said.

However, she is angry at the lack of help from the Government and the Irish insurance industry regarding her plight over the last number of months.

“We need to remember that insurance reform still has to happen. We need to tackle the compensation culture,” she said.

The Alliance for Insurance Reform, where Ms Murray is a director, welcomed the fact that PALI has secured cover for its play centre members for the next two years.

Director of the alliance Peter Boland said: “Let the Government and the vested interests be on notice that this issue and our campaign will not be pausing for breath until policyholders have received real reform and do not have to scramble for short-term fixes just to keep their doors open.”

He said there was an urgent need to reduce high awards for very minor injuries.

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01 May 2019

Self-employed people to qualify for extra jobseeker’s payments under new initiative

Self-employed people to qualify for extra jobseeker’s payments under new initiative

Self-employed people will become eligible to claim a jobseeker’s welfare payment from November, based on their social insurance contributions.

Minister for Employment Affairs and Social Protection Regina Doherty has said the initiative will provide an income safety net to thousands of small and medium businesses throughout the country.

However, the Irish Congress of Trade Unions has criticised the failure to increase the rate of insurance contribution by the self-employed, which remains at just over one quarter of that paid by employees.

In a statement, Ms Doherty described November’s planned social insurance benefit scheme for the self-employed as an assurance to people setting up or running their own business that the State is there to support them if their business ceases operations.

Applicants will have to satisfy an as yet unspecified PRSI contribution condition and those who do not have sufficient PRSI contributions will continue to be able to apply for the means-tested jobseeker’s allowance.

She added that the drafting of the necessary legislation has begun.

The Irish Congress of Trade Unions (ICTU) welcomed the change but it objected to the Government’s failure to increase the social insurance contribution of the self-employed.

ICTU’s policy officer policy officer Dr Laura Bambrick said they pay a 4% rate compared to a 14.95% contribution for employees.

She said that historically, the self-employed did not have access to the full range of social welfare payments, which was the justification for their smaller PRSI contribution. But she said this is no longer the case.

“Even before this new payment comes into effect, the self-employed now have access to 80% in value terms of contributory benefits while contributing a mere 27% of the effective rate of social insurance paid in respect to PAYE workers,” Dr Bambick said.

She cited last year’s survey of 20,000 self-employed workers conducted by Ms Doherty’s department in which over four in five of all respondents (88%) said that they would be willing to pay a higher social insurance contribution in return for additional benefits.

“Officials estimate a 0.5% increase in the self-employed 4% PRSI rate would yield €77.5m per annum,” the ICTU official said.

She accused the Government of ignoring the finding and instead introducing the new payment for the self-employed without a corresponding increase in their social insurance contribution rate.

Dr Bambrick said this is happening at the same time when the Government is making it more difficult to qualify for the full-rate old age pension and increasing the pension qualifying age to 68 out of their fears for the future sustainability of the Social Insurance Fund.

“(This) crystallises the unfairness and short-sightedness of Government thinking,” Dr Bambrick added.

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01 May 2019

US watchdog swoops on $55bn oil merger

US watchdog swoops on $55bn oil merger

The US Securities and Exchange Commission (SEC) yesterday obtained an asset freeze in connection with suspected fraudulent trading in Anadarko Petroleum Corp before the oil company agreed to be acquired by rival Chevron.

US District Judge Gregory Woods in Manhattan granted the freeze over accounts linked to suspicious purchases by unknown buyers of Anadarko securities between February 8 and April 1, 2019, according to a court filing. The filing did not name defendants, nor did it cite the value of the purchases in question.

The SEC declined to comment on the case, while Anadarko could not immediately be reached for comment.

Chevron announced on April 12 it would buy Anadarko for about $33bn (€29.5bn). Another oil company, Occidental Petroleum Corp, launched an unsolicited $38bn bid for Anadarko on April 24.

Defendants that receive the freeze notice must not withdraw, transfer or dispose of assets related to the allegations, the filing said.

Anadarko shares have trailed other energy companies in recent years, but they recently got a boost from the twin takeover offers.

The ‘Financial Times’ reported that Anadarko Petroleum was on course to accept the takeover offer from its US rival Occidental Petroleum, which gatecrashed the previously agreed sale to oil major Chevron. Including debt Occidental’s deal values Anadarko at $55bn. If it is accepted it would be a rare win for a hostile bid.


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30 Apr 2019

Self-employed to qualify for welfare pay of €203 a week

Self-employed to qualify for welfare pay of €203 a week

Self-employed workers will be entitled to weekly jobseeker payments if they become unemployed from November.

The new social insurance benefit scheme, announced today, aims to provide assurance to people setting up or running their own business.

Up to €203 will be provided for nine months for people with 260 or more self-employment PRSI contributions or six months for anyone with less.

Welfare changes for self-employed workers is one of the most significant policy decisions taken by the Government since the crash.

Under the scheme, applicants will have access to the full range of employment supports available to other jobseekers.

Graeme McQueen, head of communications at Dublin Chamber, said the organisation was “pleased” to see moves being made to improve the situation for self-employed workers.

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30 Apr 2019

Decrease in number of workers earning minimum wage or less

Decrease in number of workers earning minimum wage or less

There was a 9% decrease in the number of workers earning the minimum wage or less in the last three months of 2018 compared to the previous year, according to CSO figures.

7.6% of employees earned the minimum wage or less in Q4 of 2018, down from 8.6% in the same period of 2017.

That amounts to 137,200 employees who reported they earned the minimum wage or less and this was down by 13,500 year-on-year.

The information comes from the Labour Force Survey, which is the official source of employment statistics in Ireland.

The figures also show that women are more likely to earn the minimum wage or less than men, which was been consistent since the statistic was first measured in 2016.

Of the 137,200 employees who reported earning the minimum wage or, 75,900 or 55.3% were female while 61,300 or 44.7% were male.

In total, 6.8% of all male employees in the State earned the NMW or less and the corresponding figure for females was 8.3% in Q4 2018.

The services sector accounted for 83.5% of all employees who reported earning the minimum wage or less, while half of the total figure recorded were in the 15-24 age group.

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30 Apr 2019

Govt launches plan to boost financial services sector

Govt launches plan to boost financial services sector

The Government hopes to increase direct employment in the financial services sector to 50,000 by 2025, according to a new strategy launched this morning.

The ‘Ireland for Finance’ plan is the latest Government initiative targetting the international financial services sector.

There were 44,000 people directly employed in the sector at the end of last year, while the previous five-year strategy for the sector – launched in 2015 – has created 9,000 jobs, the Government has said.

The reduced employment growth target is partly attributed to the impact of artificial intelligence and automation in the sector.

Minister for Finance Paschal Donohoe said the new plan “has been formulated to meet the challenges and opportunities that lie ahead”.

He said “Ireland has within its grasp the opportunity to be a world leader by 2025” as a global location for financial services.

“It is essential that both the public and private sectors and the educational institutions continue to work together to avail of this great opportunity,” he said.

The new strategy has three “horizontal priorities” – regionalisation, sustainable finance and workforce diversity.

New structures to encourage the development of the sector will include bringing the Central Bank into a new stakeholder engagement group.

There also plans to develop a ‘Women in Finance’ charter and to foster links between tech and finance companies in Dublin and other regions.

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29 Apr 2019

Mortgage approvals soar but would-be buyers wait on supply

Mortgage approvals soar but would-be buyers wait on supply

NEW figures show the scale of pent-up demand among would-be home buyers with approvals running well ahead of mortgage drawdowns.

Figures from the Banking and Payments Federation, which represents lenders, show that 8,577 new mortgages to the value of €1.884bn were drawn down by borrowers during the first quarter of 2019.

First-time buyers remain the main driver of mortgage lending in the first three months of this year, accounting for 47.3pc of all loans drawn down and 47.9pc of the value of borrowing.

Separate figures show there were 4,142 mortgages approved in March, more than half for first-time buyers.

Approval are up 22.8pc compared to March last year. The number of mortgage approvals has raced ahead of drawdowns in recent years as first time buyers in particular have struggled to find homes to buy amid tight supply and constrained lending rules.

The figures also show a rose in the number of re-mortgages and mortgage switching approvals, a trend pushed by regulators keen for consumers to avail of potentially lower costs.

“The number and value of mortgages actually drawn down by borrowers during Q1 2019 show good growth on corresponding 2018 activity,” BPFI’s director of Public Affairs, Felix O’Regan, said.

“This reflects the appropriate response by lenders to increased demand for mortgage finance. Furthermore, the uplift in the number and value of mortgages approved in March indicates that further growth in drawdown activity can be expected,” he added.

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29 Apr 2019

Govt wants Central Bank in financial sector forum

Govt wants Central Bank in financial sector forum

New structures to encourage the development of international financial services will include bringing the Central Bank into a new stakeholder engagement group with industry and see overall responsibility for promoting the sector shifting to the Department of Finance.

A new strategy for the sector will be launched today by Michael D’Arcy, Minister of State with special responsibility for Financial Services and Insurance, and Finance Minister Paschal Donohoe.

Ahead of the launch, Mr D’Arcy said growth of the industry had stalled following the financial crisis.

“In the last decade we were just trying to keep the lights on,” he said.

The new strategy will mean a greater budget for the Department of Finance for its enhanced communications and promotions function.

The Central Bank lost that role following the crash.

The IDA does have a remit to bring in foreign direct investment, but has no role in developing indigenous firms.

The new push will set out broad goals, including to encouraging indigenous and foreign firms to expand here, a regional spread and more streamlined interaction with both the sector and with legislation and regulation increasingly coming from European level, he said. But he declined to give a specific target for job creation or overall value targets.

The Minister said complaints that the Central Bank here had failed to encourage banks and insurers leaving the UK as a result of Brexit – in contrast to some European peers – were wrong. “That wasn’t the case. The Central Bank were certainly unwelcoming of companies trying to trade somewhere else but pretend they were here.

“They weren’t having any of that,” he said.

However, the new strategy includes a push for greater engagement by regulators with industry.

“We want to establish a better structure with the Central Bank regulators and industry so we have agreed wording with the Central Bank that we will look at other eurozone countries and replicate what they do,” he said.

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29 Apr 2019

Increase in value and volume of mortgages drawn down

Increase in value and volume of mortgages drawn down

There was an 8.9% increase in the number of mortgages drawn down in Ireland in the first quarter of this year, according to the body representing the banking, payments and fintech sectors.

Figures published by the Banking & Payments Federation Ireland show 8,577 new mortgages, to the value of almost €1.9bn, were drawn down during the first three months of 2019.

It represents an 8.9% increase in volume and a 10.6% increase in value compared to the first quarter of last year.

While it represents a decrease on the final quarter of 2018, BPFI say traditionally Q1 is the weakest quarter in any year and Q4 is the strongest.

First-time buyers remain the single largest segment by volume (47.3%) and by value (47.9%).

BPFI has also published figures showing the latest rate of mortgage approvals, with 4,142 approved in March of this year.

2,114 of these – 51% of the total – were first-time buyers.

The number of mortgages approved rose by 22.8% year-on-year and by 23.1% month-on-month.

Mortgages approved in March 2019 were valued at €920m – of which FTBs accounted for €473m (51.4%) and €266 million by mover purchasers (28.9%).

The value of mortgage approvals rose by 20.7% year-on-year and by 21.6% month-on-month.

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26 Apr 2019

Rich nations must help workers adapt to automation, says OECD

Rich nations must help workers adapt to automation, says OECD

Robots and computers threaten 14% of existing jobs over the next 20 years, so countries must retrain workers for a transformed labour market, the Organisation for Economic Cooperation and Development has warned today.

In a report, the OECD estimates that in addition to the destruction of jobs and entire trades, an additional 32% of current jobs are likely to be “deeply transformed” by automation in the work place.

According to OECD General Secretary Angel Gurria, the lack of preparation for the looming digital age is a time bomb on social and political levels.

“It is important that people feel that they will be supported if they lose out, and helped in their search for new and better opportunities,” he said in a foreword to the report.

Already, “people and communities have been left behind by globalisation and a digital divide persists,” Gurria added, pointing to “inequalities along age, gender, and socio-economic lines”.

Many of those who have lost out “are stuck in precarious working arrangements with little pay and limited or no access to social protection, lifelong learning and collective bargaining,” he noted.

The OECD’s researchers found 56% of adults in the 36 OECD member countries – among them economic giants like the US, Japan or Germany – have only “basic” or non-existent information and communication technology (ICT) skills.

As a priority, the OECD recommends that member countries, also including Canada, Chile and Britain, offer “more flexible” retraining compatible with employees’ working hours to make it more attractive.

While some governments such as that in France offer financial support for lifelong learning, firms especially in the US are often reluctant to invest in their staff’s skills.

The OECD also highlighted a growing trend towards self-employment, with one in seven workers in the club of rich countries working for themselves, while one in nine was on a temporary contract.

Such working relationships often make employees ineligible for training or retraining opportunities.

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