THE NEW PUBLIC holiday in February next year could cost the Exchequer between €220 million and €300 million, according to Tánaiste Leo Varadkar.
The public holiday fell on Friday, 18 March — the day after St Patrick’s Day this year.
From 2023 on, however, there will be a new annual public holiday at the start of February to mark St Brigid’s Day, also the traditional Gaelic festival of Imbolc/Imbolg.
This will be the first Monday in every February, except where St. Brigid’s day, the first day of February, happens to fall on a Friday.
In that case, Friday 1 February will be a public holiday, ensuring that the public holiday provides for a long weekend.
While the public holiday does not require businesses to close on the day, it does mean the vast bulk of workers within the State will be entitled to an additional day’s paid leave.
Replying to a parliamentary question from Sinn Féin’s Louise O’Reilly on the cost to the Exchequer the new bank holiday will yield, Varadkar said an additional public holiday may impact in terms of cost to the Exchequer broadly in two ways.
Tax receipts
“First, it might result in lower tax receipts due to any associated reduction in economic activity. Second, there would be a notional cost in terms of lost labour hours,” he said.
While he said there is a lack of Irish data available to generate a historical estimate for the impact of a one-off public holiday in Ireland, using previous analysis by the UK Office for National Statistics it could be estimated that the economic impact of an additional one-off public holiday would reduce annual gross national income by between 0.3% and 0.4%.
“Assuming that this reduction in economic activity is passed through in terms of reduced tax revenue on a pro-rate basis – which may not be the case – this would indicate a cost to the Exchequer of between €220 million and €300 million,” said Varadkar.
“This estimate is based on forecast tax revenue for 2022 of €75.8 billion, from the Department of Finance’s spring economic forecasts as set out in the Stability Programme Update,” he added.
The Tánaiste said the second cost to the Exchequer would be in terms of lost work hours resulting from the public holiday.
While, in practice, a sizeable portion of the public service will continue to work on a public holiday, there will be additional entitlements to time off in lieu, he said.
“The Revised Estimates for Public Services 2022 estimates an Exchequer pay bill of €21.9 billion for 2022, or just over €60 million per day – which provides an estimate of the cost to the Exchequer of a public holiday,” said Varadkar.
He noted that these costs are notional in the main and will not lead to additional expenditure for the Exchequer.
“A large part of the public service is salaried, and so their pay and subsequently the cost to the Exchequer will be the same irrespective of a public holiday.
“These numbers only provide an indicative estimate of the potential economic cost of an additional public holiday to the Exchequer and do not capture positive aspects including benefits of leisure from an additional day off for many, as well as any further community and societal benefits,” said the Tánaiste.
Trade unions welcomed the announcement of the additional bank holiday this year, as they have long argued that Irish workers enjoy fewer bank holidays than many of our European neighbours.
The European average is 12 days, while workers in Ireland will have 10 public holidays, including the additional bank holiday.
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