Government funding needed to protect against AI displacement, warns Ibec

Business lobby group's pre-Budget submission has urged the government to unlock its National Training Fund to support upskilling

Meta is cutting 350 staff in Ireland after heavily investing in AI. (AP Photo/Thibault Camus, File)

The Government must provide support to employees and businesses that are being dislocated due to AI adoption, Ibec has said.

Publishing its pre-Budget submission on Tuesday, director of lobbying and influence at Ibec Fergal O'Brien called for social solidarity with workers who have been displaced by AI following hundreds of layoffs in Ireland's tech sector. 

"The disruption is real, we know that it is happening," said Mr O'Brien, who has called for the government to unlock its National Training Fund (NTF) to support the transition of skills. 

The NTF is a dedicated fund to support the training of those seeking employment and those already in employment looking to upskill, which is financed by a levy on employers and collected through the PAYE/PRSI system. Currently, the existing unused fund is €2bn.

Ibec is calling for the government to invest the projected annual NTF surpluses of between €200m and €400m to 2030 into a non-inflationary skills and training for workplace upskilling and AI integration. 

In addition, the business lobby group is seeking a maximum target for the NTF cumulative surplus under a "use it or lose it" rule, whereby the funds are reimbursed to businesses. 

"Reaching this cap should trigger an automatic, temporary suspension of the training levy, returning funds to employers," Ibec said.

According to the organisation's submission, the current path of both interest rates and inflation, which could exceed 4% this year, is likely to result in increased borrowing costs for governments and volatility in tax revenues. 

Ibec has called for the government to unlock the €2bn surplus sitting in the NTF to ensure Ireland is preparing its workforce for a rapid period of technological change.

"The labour market is undergoing a profound technological shift, experiencing 'creative destruction' in real time," said chief economist and head of national policy at Ibec, Gerard Brady.

"While AI automates existing tasks, emerging opportunities are redirecting capital and human resources toward new markets. This latter force holds the key to long-term productivity and prosperity."

Recent weeks have seen significant layoffs in the tech sector, with Meta cutting 350 jobstarget="_blank" rel="noopener noreferrer"> from its Dublin operations, and a contractor of the social media giant Covalen reducing its workforce by 700. 

"Ireland is well-resourced to make this labour market transition through employer contributions to the NTF. We must now choose whether to remain passive observers of technological change or become active architects of tomorrow’s workplace," said Mr Brady. 

Potential policy mistake

"If the Government does not fully maximise the NTF to support training and upskilling our workforce to meet these rapid changes and position our workforce as the most prepared for the changes coming, it must return those funds to businesses to invest in skills development directly."

Mr Brady said that if Ireland does fall behind, it "will not be for a lack of resources or demand."

"It will be a policy mistake," the chief economist noted. 

In addition, Ibec is also calling for a €130m expansion of the research and development tax credit to improve Ireland's position as a competitor to the US following the implementation of Donald Trump's 'One Big Beautiful Bill' act. 

It is also calling for double-index income tax bands and credits to offset inflation, including a €3,000 increase in the top tax entry point for Budget 2027, to make up for a failure to index bands in 2026.