Chambers signals delays on minimum wage and auto-enrolment pensions

The Government is set to delay minimum wage increases and the roll out of auto-enrolment pensions as part of plans to bolster Irish businesses amid international economic uncertainty, Jack Chambers has signalled.

The Public Expenditure minister insisted the September timeline for introducing auto-enrolment pensions would only be pushed back by a “short number of months”.

The Government is currently committed to replacing the national minimum wage with a national living wage from 2026, with the living wage set at 60% of the median wage in any given year.

The minimum wage is due to remain in place until the living wage is fully phased in.

Mr Chambers said the “nature and scale” of wage increases may now be “extended over a slightly longer period”.

His comments come as the Minister for Enterprise, Tourism and Employment Peter Burke prepares to present a memo to cabinet this coming week on a 15 point action plan to enhance competitiveness in the Irish economy.

The blueprint represents the Government’s short-term response to the turbulence created by the US administration’s stance on trade and tariffs.

In an interview with RTE Radio One’s This Week programme on Sunday, Mr Chambers also made clear the Government’s opposition to the prospect of the EU introducing a digital services tax on US tech companies if the bloc fails to secure a negotiated agreement with President Donald Trump on tariffs.

He said if it got to the stage of a digital services tax being imposed it would mean “enormous damage” for the Irish economy.

The EU last week stepped back from introducing trade countermeasures against the US after President Trump announced a 90-day pause on a swathe of new trade levies, including a 20% tariff targeting the European bloc.

A baseline 10% tariff is still being applied by the US on the EU during the three-month pause period amid efforts by EU trade commissioner Maros Sefcovic to strike a deal with the US administration.

“We’re still in a very damaging sphere of disruption and uncertainty, and all of the predictability of the last number of decades when it comes to international trade is still very much undermined by the announcements of recent weeks,” Mr Chambers told RTE.

“And despite the pause being a welcome space to allow for negotiations, they’re still all downside risks for the Irish economy and indeed the European economy.”

He added: “Any eventual outcome which undermines the current trading relationship represents downside risk, and that’s why the fact that we’re coming at this from a position of strength shows that we need to take further actions as an Irish economy to control what’s within our own sphere, to strengthen our own competitiveness.”

Mr Chambers insisted the Government was still “absolutely committed” to the auto-enrolment pension scheme but said the already-delayed initiative would be pushed back further.

“It’s likely to be pushed beyond September, but it’s likely to still occur in the short number of months after September,” he said.

On the moves on the national minimum wage, Mr Chambers said: “We’re considering, I suppose, the overall cumulative impact on costs for businesses and the competitiveness within the Irish economy.

“The number one focus for government is to protect jobs, to drive competitiveness, and that’s why, separately, we’ll be establishing a cost of business advisory forum on how to sustainably manage the overall cost for business.

“Within that, the Government is considering how we sequence the overall timing of the implementation for the minimum wage, and that’s something that will be brought forward to Government shortly.”

He added: “It means that the work of the Low Pay Commission will continue, but it means the nature and scale of the increases may be extended over a slightly longer period, but there would still, I expect, be increases, but it would be managed in a more sustainable way that reflects the need within the Irish economy to preserve jobs, to ensure we manage the overall cost base.”

European Commission President Ursula von der Leyen has floated the potential of the EU imposing a digital services tax on US tech companies if the dispute on tariffs is not resolved during the 90-day pause period.

Many of those tech companies have established major operations in Ireland.

Mr Chambers stressed the Government’s opposition to such an EU countermeasure.

“We’ve been absolutely clear about this from an Irish perspective, we did not support it in the past, and we do not support it now,” he said.

“It would be hugely damaging to the Irish economy, to foreign direct investment and to future growth and investment from an Irish perspective.

“I think we have to be careful what we place on the table.”

Mr Chambers said the European Commission’s response to date had been “measured and considered” and he insisted that all the “energy and the focus” of the bloc should be on achieving an agreed position with the US.

“If this escalates to a point of a digital services tax being discussed, we’re at a point of enormous damage for the Irish economy, for the European economy, much of which it would be more severe than any of the downside risks which have (already) been outlined,” he said.