The surplus in the National Training Fund in 2022 is around €855m, warns Ireland’s Employment & Recruitment Federation.
In its pre-Budget submission the Employment & Recruitment Federation (ERF) has called on the Government to accelerate skills training but also tackle a tax regime that is disincentivising employers and employees.
With Q2 employment figures surging to 2.55m and strong pick-up across most sectors, employers in Ireland are again facing the challenge of practically full employment and the associated wage inflation to support talent recruitment and retention, the ERF warned.
“In Budget 2023, the Government should use some of these funds to accelerate skills training”
Policy asks include a 50% credit on the cost of training provided against employer PRSI liability until the end of 2023 and additional State funded support for training under the National Training Fund via agencies like Skillnet Ireland and the Enterprise Ireland Spotlight on Skills.
“The surplus in the National Training Fund in 2022 is around €855m,” said Donal O’Donoghue, ERF president. “In Budget 2023, the Government should use some of these funds to accelerate skills training.”
It said the important progress being made in Apprenticeships can be boosted by waiving NTF levies for firms engaging, particularly in sectors like construction, with severe shortages.
It also called for the introduction of further reforms and simplification of the work permit/visa system for those with essential skills as well as increasing English language training funding for all migrants actively seeking employment.
“The surplus in the National Training Fund in 2022 is around €855m,” said Donal O’Donoghue, ERF president. “In Budget 2023, the Government should use some of these funds to accelerate skills training.”
Incentivise employers and employees
Employers and employees are disincentivised by unfair taxation, which becomes an issue when seeking to attract investment and high-skill jobs to Ireland, the ERF posits.
“The Budget must reduce personal tax burdens to allay concern among inward investors that our marginal tax rates, especially for higher earners, at 52%, are out of line with international standards”, Donal O’Donoghue maintains.
The ERF calls for the reduction of the 52% marginal tax rate and increase the entry point before it applies and introduce indexation based on the consumer price index of all bands, reliefs and thresholds across Universal Social Charge, PRSI and pension.
It added that there is a need to support hospitality and tourism by extending the 9% reduced VAT rate to the end of 2024.
The higher VAT rate – one of the highest in Europe – it says should be reduced to 21% to stimulate consumer spending.
The ERF said that the Small Business Exemption, currently capped at €500, should increase to €1,000 as part of inflation response measures, for businesses to provide once-off employee recognition.
To counter rising fuel costs and encourage public transport use, schemes such as the Tax Saver Commuter Ticket should be exempt from all income tax, not just meriting PRSI relief.
ERF said that Budget 2023 should simplify the bureaucratic remote working incentive, to a €1500 tax credit, and make all related employer costs allowable in the first year, not spread over eight years.
It said high-speed broadband throughout the country must be a strategic policy priority to facilitate remote working.
