News Ireland daily BLOG by Donie

Wednesday 4th May 2016

Irish revenue tax take €500m ahead of target

Exchequer returns show a VAT shortfall but revenue is well ahead of target

     

The Irish State collected €14.04 billion in the first third of the year, €1.17 billion more than in 2015 and €475 million more than forecast by the Department of Finance.

Tax collection is running close to €500 million ahead of target this year but a VAT shortfall raises questions about the strength of consumer spending.

As political talks continue, exchequer returns from the Department of Finance point to relative strength in the public finances as a Fine Gael-led minority government prepares to take office.

Talks between Fine Gael and two groups of Independent TDs have intensified in an effort to have a new government in place by the weekend.

The Independent rural TDs and the Independent Alliance members are to be given a draft programme for government at a meeting today.

It is understood the Independents have secured concessions in the areas of health, agriculture and rural Ireland. The talks were continuing late last night.

Fine Gael sources insisted a vote for taoiseach could take place today but admitted it was more likely to take place tomorrow.

The exchequer returns will be encouraging for the new government in that the overall level of spending remains under control.

However, they also reflect the onset of pressure on the health budget, which signals potentially major problems for the incoming administration.

Year-on-year improvement.

The exchequer was in deficit by €1.055 billion at the end of April, a year-on-year improvement of €1.27 billion which was attributed to the increase in overall tax revenue.

The figures were released on same day as data showing the unemployment rate dropped in April to 8.4 per cent from 8.6 per cent in March.

The State collected €14.04 billion in the first third of the year, €1.17 billion more than last year and €475 million more than forecast by the department.

“April is not significant in terms of corporation tax receipts and is not a VAT due month . . . However, there were some significant one-off and timing factors, which have helped flatter the April tax position,” the department said.

Collections of Value Added Tax, the tax on sales, remain ahead of 2015 at €4.17 billion but the return was €161 million behind target for the first four months.

Corporation tax collections are running well ahead of profile. The €759 million out-turn in four months was €315 million or 70.8 per cent more than projected.

Income tax on target.

The collection of €6.1 billion in income tax in four months was on target, with a shortfall in earlier months recovered by a €158 million overperformance in April. The department cited “one-off payments” in April, but said the overall outturn was broadly consistent with recovery in the labour market and increased earning.

On the expenditure side, some €13.65 billion in net voted spending over four months was €89 million below target and €68 million lower than last year.

While 15 of the 16 government departments were on or under profile, health spending was €78 million ahead of target at the end of April.

This is generally seen to be a sign of a major deterioration in the health budget later this year, something that comes amid pressure on public pay and demands for additional spending in the political talks.

Total exchequer debt servicing costs in the first four months of the year reached €3 billion, down €81 million on the same period last year on foot of early IMF repayments.

Consumers now moving more to digital payments with financial services

A third of consumers would leave their provider if they didn’t offer up to date technology, a new survey finds

Consumers are increasingly looking for financial services providers that are embracing technology, turning to digital and mobile payments, a new survey has found.

A new study, by Fujitsu, showed that more than a third of consumers would leave their provider if they didn’t offer more up to date technology, with 32% of those surveyed using mobile device payments and 22% using wearable technologies. Across Europe, on-line banking remains the most popular channel, with three quarters of customers using it once a week or more.

“Banks have no option but to embrace change,” said Anthony Duffy, senior banking technology consultant with Fujitsu UK and Ireland, noting how revenue at traditional banking institutions had fallen since the days before the economic crash.

“Doing banking as we have in the past 20 years isn’t going to be possible going forward,” said Mr Duffy. “The digital revolution has come along at the right time.”

Driving this adoption of technology is the smartphone, as people become more confident using the technology.

“People just started to recognise the convenience factor digital banking offered,” said Mr Duffy.

Banks themselves are also taking advantage of the shift, pushing people to use alternative channels such as smart ATMs and deposit machines in branches.

“Digital is transforming each and every aspect of society and this has irrevocably changed consumer behaviour. Today’s customers are no longer guarded and conventional,” said Francois Fleutiaux, Senior Vice President, Head of Country Leadership, EMEIA, Fujitsu. “Modern day consumers are ready and willing to embrace innovation when it makes interaction more convenient.”

Already in Ireland, there have been some “digital only” banks offering services to customers. But Mr Duffy said competition shouldn’t be new to Ireland’s traditional players, who are seeing supermarkets and other providers begin to offer insurance and other services to customers.

“If traditional banks want to stay in business they will have to compete and reinvent themselves,” he said.

Consumers are also more willing to buy extra services from their financial providers, the survey found, with a third open to buying energy for their home from their bank or insurer, while a similar number would also consider purchasing personal data storage from the institutions, and 30% would buy broadband.

That goes both ways though; with a fifth of consumers willing to buy their banking or insurance services from companies such as Google, Amazon or Facebook.

However, Irish people are still reluctant to move away from the established service providers. Traditional channels shouldn’t be written off either. On a Europe-wide basis, 34% of people said they visit their bank branch weekly, and 36% use phone banking, leading to the conclusion that digital is simply another way to communicate for consumers.

The survey questioned 7,000 consumers from across Europe.

About a fifth of those surveyed said they used cryptocurrencies, but that high figure was driven by Eastern European countries, where 44% said they used it.

Although much has been made of cryptocurrency such as Bitcoin in recent years, Mr Duffy said he didn’t think it would gain widespread adoption in the short term. Instead, the blockchain – the technology that underlies Bitcoin – could be more relevant as banks begin to look at the technology.

One area that looks set to evolve, however, is canticles payments as services such as Apple Pay and Samsung Pay allow people to use their phones and smartwatch to pay for goods and services.

“I think organisations like Apple and Samsung getting involved significant gives the mechanism a credibility,” he said.

However, the majority of contactless payment are still done through cards, especially in Ireland where Apple and Samsung have yet to launch their payment systems. The chief driver of adoption has been the lifting of the limit on transactions to €30, allowing contactless payments to be used for a wider range of transactions.

ECB to stop issuing €500 note but keep its legal status

The €500 note was never issued by the Central Bank in Ireland

 Going 

The ECB has been looking to get rid of the €500 note due to concerns that it is used by criminals and militants to finance their activities.

The European Central Bank will stop issuing €500 bank notes towards the end of 2018 on concerns it could facilitate illicit activities but outstanding bills will remain in use indefinitely, the ECB said in a statement yesterday.

“The €500 note will remain legal tender and can therefore continue to be used as a means of payment and store of value,” the bank said.

“The €500 banknote, like the other denominations of euro banknotes, will always retain its value and can be exchanged at the national central banks of the Eurosystem for an unlimited period of time.”

The ECB has been looking to get rid of the €500 note, despite the objections of Germany’s central bank, due to concerns that it is also used by criminals and militants to finance their activities. It is said a €1 million bundle of the notes weighs only about 2kg, a weight easily transportable across borders. The €500 note was never issued by the Central Bank in Ireland

Labrador dogs have an overeating gene

A new study shows

   

A new study says an overeating gene can explain why some Labradors become obese?

Labradors are often overweight because they have a gene linked to overeating, new research has suggested.

The most common breed of dog in the UK and the US, Labradors are more likely to become obese than others.

Scientists at the University of Cambridge have discovered that 23% of the loveable dogs have a variant of an obesity-related gene strongly associated with weight and appetite.

In a study published today in the journal Cell Metabolism, a team of researchers studied 310 pet and assistance dog Labradors to look for variants of three candidate obesity-related genes.

They also examined the dogs’ “food motivation” by asking owners about their animals’ relationship with food.

The researchers found that a variant of one gene in particular, known as POMC, was strongly associated with weight, obesity and appetite in Labradors and flat coat retrievers.

In both breeds, for each copy of the gene carried, the dog was on average 1.9kg heavier, an effect size particularly notable given the extent to which owners, rather than the dogs themselves, control the amount of food and exercise their dogs receive.

Lead author Dr Eleanor Raffan said: “This is a common genetic variant in Labradors and has a significant effect on those dogs that carry it, so it is likely that this helps explain why Labradors are more prone to being overweight in comparison to other breeds.

The gene affected is known to be important in regulating how the brain recognises hunger and the feeling of being full after a meal.

“People who live with Labradors often say they are obsessed by food, and that would fit with what we know about this genetic change,” says Dr Raffan.

The scientists even believe that understanding how the gene – which is also found in humans – works in dogs might help tackle the obesity crisis.

Professor Stephen O’Rahilly, Co-Director of the Wellcome Trust-Medical Research Council Institute of Metabolic Science, says: “Common genetic variants affecting the POMC gene are associated with human body weight and there are even some rare obese people who lack a very similar part of the POMC gene to the one that is missing in the dogs.

“So further research in these obese Labradors may not only help the wellbeing of companion animals but also have important lessons for human health.”

Major breakthrough in laboratory grown human embryos

  

Scientists reported today they had grown human embryos in the lab for nearly two weeks, an unprecedented feat that promises advances in assisted reproduction, stem-cell therapies and the basic understanding of how human beings form.

Scientists reported today they had grown human embryos in the lab for nearly two weeks, an unprecedented feat that promises advances in assisted reproduction, stem-cell therapies and the basic understanding of how human beings form.

Besides opening a window onto the first steps in the creation of an individual, the findings in parallel studies may help explain early miscarriages and why in vitro fertilisation has such a high failure rate.

The research also showed for the first time that newly-forming human embryos can mature beyond a few days outside a mother’s womb, something that was previously thought to be impossible.

But the widely hailed results also set science on a collision course with national laws and ethical guidelines, experts cautioned.

Up to now, a so-called “14-day rule” which says that human embryos cannot be cultured in the lab for more than two weeks — has never been seriously challenged simply because no one had succeeded in keeping them alive that long.

In this case, the scientists destroyed the embryos to avoid breaching that limit. The findings were published in Nature and Nature Cell Biology.

Next to nothing is known about how the small, hollow bundle of cells called a blastocyst — emerging from a fertilised egg which attaches to the uterus, allowing an embryo to begin to take shape.

“This portion of human development” is called implantation and “was a complete black box,” said Ali Brivanlou, a professor at The Rockefeller University in New York, and the main architect of the Nature study.

Building on previous work with mice, Brivanlou and colleagues concocted a chemical soup and scaffolding to duplicate this process “in vitro”, or in a petri dish.

“We were able to create a system that properly recapitulates what happens during human implantation,” said Rockefeller scientist and lead author Alessia Deglincerti.

As hoped, the blastocyst grew, beginning to divide into the different types of cells that eventually give rise to a foetus and its placenta.

But unlike earlier experiments, in which growth has rarely continued beyond seven days, the embryos showed an unexpected ability to self-organise.

“Amazingly, at least up to the first 12 days, development occurred normally in our system in the complete absence of maternal input,” Brivanlou said in a statement.

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