CEO Update: Review of Budget 2025 – Ibec welcomes wins for business, infrastructure and skills and training 

Friday, 04 October 2024

The latest CEO Update to Ibec membership from Danny McCoy

Dear member,

Following the announcement of Budget 2025 on Tuesday, now is an opportune time to reflect on the fiscal measures outlined and their implications for businesses in Ireland.

Ibec welcomes the Government’s actions to address several years of sustained and significant increases in business costs through the Energy Subsidy Scheme and the delayed introduction of pension autoenrollment. Moving forward, it is essential that government ensures the viability of businesses and keeps the timing and cumulative burden of policy-driven labour costs under review.

It is important to note that in addition to the short-term commitment to an uplift in infrastructure spending of €1.6 billion in 2025, substantial resources have also been dedicated to continuing investment over the next decade.

A further €2 billion has been placed in the Infrastructure, Climate and Nature Fund (ICNF) in 2025 which will support investment in the coming years. €3 billion from the sale of AIB shares has been committed to non-exchequer infrastructure and utilities projects including €1 billion in Uisce Eireann for water and wastewater investment, €1.25 billion in the Land Development Agency, and €750 million in development of the electricity grid. Critically, future sales of shares in AIB have been committed to similar measures. The Government has also set out a new framework for allocating the funds from the Apple Escrow Fund €14 billion with funding going to capital projects in four areas – Water, Electricity, Transport and strategic infrastructure, and investment for housing.

Ibec will be working to ensure this resource of over €20 billion for infrastructure serves to support the effective delivery of the economic capacity which is key to members continued growth in Ireland.

In addition, Ibec welcomes the announcement of the unlocking €1.5bn from the surplus in the National Training Fund. This has been a longstanding Ibec campaign, and this investment will now support the critical development of our education and training system to meet the skills needs of business.

Investment from the National Training Fund will go towards meeting Ibec's key asks from our budget campaign:

• Ibec has consistently called for a multi-annual approach towards capital investment in Ireland's research and innovation facilities. €300m will now be invested in innovative equipment in the further education and training sector, research skills, and research infrastructure between 2025 and 2030.

• Ibec has lobbied strongly for the need to close the funding gap in higher education. €50m will be allocated from the NTF surplus for the university sector to support the pipeline of highly skilled graduates for industry. This funding will increase year on year until it reaches €150m in 2029.

• Ibec has campaigned on the need to address barriers to SME participation in upskilling and reskilling programmes. €8m will be invested in an SME Upskilling Incentive Scheme which will help to offset the cost of participation in skills programmes for SMEs. This is part of a broader investment €20m in a skills package for business.

• A further €77m will be invested in the apprenticeship system in 2025 including funding for consortia apprenticeships and the transition to a single model for apprenticeships. Ibec has championed the need for greater investment in the system to expand access and participation in apprenticeships.

• €9m funding will also be made available for PhD Stipends in 2025, increasing the stipends from €22,000 to €25,000 per annum.

Ibec will continue to work with Government to ensure that this €1.5bn investment package meets the skills needs of businesses across Ireland and continue to lobby for the introduction of a national training voucher scheme for industry.

If you would like a bitesize overview of Budget 2025 I’d highly recommend you listen to our most recent episode of Ibec Responds with Ger Brady, Ibec Chief Economist and his colleagues, Hazel Ahern-Flynn, Senior Economist, and Mourad Mejdi, Economist who discuss their reaction following the announcement of Budget 2025. The podcast is available here.

As always, I welcome any feedback and queries.

Regards,

Danny McCoy

CEO

Ibec