The annual levy employers pay towards higher education will be raised, contributing €200 million to the funding of higher education for the next three years. The proposed increase was laid out in Budget 2018 .
The National Training Fund (NTF) levy, incorporated into the employer’s share of PRSI, will to be raised from 0.7% to 0.8% next year, which would raise €47.5 million additional funding for the higher and further education sectors, according to Minister of Finance,Paschal Donohoe.
The levy will rise to 0.9% by 2019 and in 2020 it will reach 1%. The announcement marks the first increase in the NTF since it was first established in 2000.
Speaking in the Dáil, Donohoe said he “firmly believed” the training fund had a role to play in funding higher and further education, alongside exchequer investment and student contributions.
An increase in the levy was first recommended in the Cassells report on higher education funding published last July, with students’ unions around the country, as well as a number of trade unions, expressing their support for the proposal.
Last year, Trinity College Dublin Students’ Union (TCDSU) presented an outline of their desires with regards to the funding of higher education to the Joint Oireachtas of Education and Skills Committee, alongside the Union of Students in Ireland (USI). An increase to the NTF was a central part of their presentation.
Responding to the announced increase, TCDSU President Kevin Keane said: “The increase in the National Training Fund is something the Union really welcome. The SU lobbied quite hard for an increase last year. The increase is a good start and it’s a good sign that higher education is going in the right direction, which is publicly funded education. There is a real significant contribution from employers into the sector.”
However, in the lead up to the Budget 2018, employers’ groups such as the Irish Business and Employers Confederation (IBEC) resisted an increase in a payroll levy to fund higher education. Earlier in the year, IBEC stated that there were “serious issues” around the governance and use of the training fund, which they say amounts to an “employment tax”.
The Cassells report does outline a need to increase funds from employers for higher education, however, any funds raised by the NTF levy would not address the separate need for an increase investment in further education.
The Irish Congress of Trade Unions (ICTU) did not agree with an increased NTF levy and argued that the extra benefits of increased skills to larger enterprises should be reflected in how the burden is shared. It said this creates a valid argument that some or all of the cost should come from employers’ profits reflected in corporation tax, either by levy or a ring fenced fund.