Budget 2026: Welfare, petrol, diesel and cigarettes rise, little change to income tax

Minister for Finance Paschal Donohoe and Jack Chambers have unveiled Budget 2026.

The €9.4 billion package is without once-offs like double child benefit payments and electricity credits but there are extensions to reliefs for mortgage holders and renters as well as a cut in student fees.

Opposition TDs have also been reacting to the package, Labour Party finance spokesman Ged Nash described it as a “budget for burger barons and big builders”.

Summary of key measures

• The National Minimum Wage is going up 65c to €14.15 per hour
• The 2 per cent rate band for USC will rise by €1,318 to €28,700, but there will be no broad personal taxation changes
• The VAT rate on hospitality will be reduced from 13.5 per cent to 9 per cent from July 2026
• VAT rate for completed apartments is cut to 9 per cent from 13 per cent from tonight until end of 2030 to encourage development
• The price of a packet of 20 cigarettes is increasing by 50 cent, with a pack now just under €19
• The rent tax credit is being extended for three years while the mortgage interest credit is being extended for two years
• The €5,000 VRT relief for EVs has been extended to the end of 2026
• The weekly fuel allowance rate will go up by €5 and has been extended to those eligible for the working family payment
• Motorists are facing a rise of just over 2c per litre at the fuel pumps on the back of the increase in carbon tax charges

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Sinn Féin childcare spokeswoman Claire Kerrane TD, has described proposals to create 2,300 childcare places through schools and community centres as “utter madness”.

The places will be created by building extensions to schools and community centres.

“These children are not going to get a place via an extension to a school or community centre anytime soon. This proposal is utter madness,” she commented.

“What community centre needs an extension? Where are these community centres? How long will this take? Literally, how long would this take to deliver?”

The 50c increase in the price of cigarettes is now “just vindictive”, the Sinn Féin justice spokesman Matt Carthy has said.

TDs voted by 112 to 46 in favour of the measure, which will bring the price of a pack of 20 cigarettes to almost €19.

Mr Carthy said the measures were not just vindictive but “counterproductive. I think they are enticing and encouraging the growing black market economy”.

He said “there are better and more effective ways than actually taking this vindictive action” and the only real impact for smokers would be increased costs.

Labour’s Duncan Smith said 2025 was supposed to be the year that the policy target of a tobacco-free Ireland would be met, promised in 2013 and smoking levels would be 5 per cent.

But smoking prevalence is at 18 per cent and “we are not meeting any of the targets” and the impact on the health system is “absolutely horrendous”.

We can continue to tax tobacco but “we need to see some real policy issues that are actually going to make a difference” because the annual resolution alone to increase the price will not do that, he said.

The Disability Federation of Ireland (DFI) has said that while it welcomes the €619 million increase in funding for disability services announced in Budget 2026, it describes the budget as a “devastating setback” for disabled people unable to work.

DFI acknowledged that the new funding will strengthen services, including additional investment in residential and day supports, respite provision, assessments of need for children and extra hours for home support and personal assistance. The organisation also recognised the progress on pay parity for staff working in the sector, describing it as important and overdue.

However, the organisation said that the majority of disabled people in Ireland do not access these services and will see little benefit from the additional investment.

“While increased funding for disability services is welcome and long overdue, it will reach only a fraction of the over one million disabled people living in Ireland,” said DFI chief executive Elaine Teague.

“1 in 5 people unable to work due to disability live in consistent poverty. For them, this Budget means less support and less security.

“The Government has chosen to highlight big numbers on services while quietly removing the once-off payments that made last year’s budget bearable for disabled people. That is unacceptable.”

The implementation of the controversial derelict sites levy is to be taken away from local authorities and given to the Revenue Commissioners.

As previous Irish Times figures have shown, many local authorities have been reluctant to penalise property owners for derelict sites.

Ten local authorities have never levied the owners of derelict sites in their areas, the latest figures which are for 2023 reveal.

Minister for Housing James Browne told vacant site owners that they’ve been “getting away with it up to now,” and that those who fail to pay a new tax could end up on Revenue’s tax defaulter list.

The Government announced a new Derelict Property Tax in Budget 2026, which will replace the existing Derelict Sites Levy.

It will be at least 7 per cent the value of the site which is the current levy on derelict properties.

The new tax will be operated by Revenue, rather than by local authorities. Legislation to create the new tax will be brought forward next year.

“What I would be saying to people who have derelict properties, you’ve been getting away with it up to now,” Mr Browne said.

The minister said that there have been “challenges” for local authorities in applying the Derelict Sites Levy, “both legal and just in practical terms.

“I think this is an opportunity to really look at it and see how it can be more effective. But the Revenue, having the firepower that Revenue has, the consequences of not complying with Revenue in and off itself, I think will have a serious co-ordinating effect on people with these types of vacant properties,” he added.

Budget 2026 snuck up on us with all the political heat surrounding the presidential election, but will it live long in the memory?

Jack Horgan-Jones has rounded up five key takeaways.

The Government’s underlying budget deficit, which excludes windfall taxes, is expected to balloon to almost €14 billion next year, writes economics correspondent Eoin Burke Kennedy.

In its annual economic and fiscal outlook, published alongside Budget 2026, the Department of Finance forecasts the Government will run a budget surplus of just over €5 billion in 2026.

However, when windfall corporation taxes are removed, this morphs into an underlying deficit of €13.6 billion (nearly 4 per cent of national income), reflecting the risk posed to the public finances from potential changes in the global trading environment.

Minister for Culture Patrick O’Donovan told the Arts Council last week that he was not “countenancing” increasing funding to the state agency, writes Ellen Coyne.

The organisation is currently the subject of an investigation into a failed €6.675 million IT system.

Mr O’Donovan said that the Arts Council is receiving around €140 million in State funding in Budget 2026, about the same as Budget 2025.

The Arts Council had sought €200 million in funding this year, and said that “artists and arts organisations reporting chronic funding deficits which seriously impact both their practice and ability to provide arts opportunities.”

Mr O’Donovan said that it would be “premature, to put it mildly, for me to ask the Department of Public Expenditure and Reform to increase monies into an organisation into which there is an active investigation around the issue of governance, oversight and the expenditures of public monies.”

He added: “I told them last week that additional monies was not something that I was countenancing. They understood perfectly well my reasoning around the fact that where you have a live investigation into something so important as governance and the expenditure of public monies ... they got it entirely.”

The commencement of a new Dublin-Derry “airlink” was among the measures announced by the Government.

“It was a big ask from the people of Derry and across the northwest region as well,” Minister for Public Expenditure Jack Chambers told the media this afternoon.

“A lot of people in Donegal and the whole cross-Border business community have been seeking to pursue this route for many years.

“I think it is a really important measure to drive connectivity between Dublin and Derry.

“North-South connectivity is critical from an aviation perspective for onward journeys as well and so, you know, I think it’ll make a real difference.”

The move was welcomed as “hugely positive for the entire northwest” by Sinn Féin.

One of the biggest challenges that has faced citizens over the past year has been energy bills.

Eoin Clarke, energy expert at switcher.ie, has pointed out this year’s budget “falls short of the more generous, one-off supports” seen in previous years.

“The removal of vital electricity credits will hit many households hard this winter,” he said. “Since 2023, €1,050 in electricity credits have been passed on to households, cutting the average annual bill by roughly a third in 2023, and a quarter in 2024.

“This year, energy prices have remained largely static, with some suppliers recently announcing increases.

“Sadly, the loss of the electricity credit, coupled with spiralling grocery costs, could leave many families struggling to make ends meet – even with Government supports such as the fuel allowance now extended to low-income families.”

He said switching remains one of the most effective ways to save, with a typical household able to cut over €450 a year by moving to the cheapest electricity deal on the market.

Back to the housing crisis, and the Association of Consulting Engineers of Ireland is saying there will now need to be “a bonfire of the red tape that is strangling housing and infrastructure delivery”.

The group’s director general Shane Dempsey said: “Without this, a large proportion of the €116 billion announced for infrastructure will evaporate due to delays, judicial reviews, and legal disputes.

“We need to see – in full – the forthcoming report on removing barriers to infrastructure delivery in the regulatory system, and we must quickly move to put its recommendations into practice. The real test will be in how that report is deployed not the figures mentioned today.”

Labour Party finance spokesman Ged Nash – never a man short of a soundbite – has described Budget 2026 as a “budget for burger barons and big builders”.

“Five-hundred and thirty-six million euro on tax relief for apartment builders – with no strings attached – and cash boosts for the bottom line of burger barons, are being paid for by PAYE workers,” he said. “Plain and simple.”

He added: “The election may be over, but the crisis for working families isn’t. Budgets are about choices and we now know with certainty which side this Government is on.”

The Society of Chartered Surveyors Ireland (SCSI) has welcomed measures aimed at reducing the delivery costs of new apartments and improving their viability.

SCSI president Gerard O’Toole said that while VAT is a significant input costs for new apartments, other factors such as high utility connection charges need to be addressed.

Additionally, the SCSI said it was looking forward to examining the detail of the new Derelict Property Tax but noted that it would be administered by the Revenue Commissioners and not local authorities as was the case with the Derelict Sites Levy.

Turning to the rental market, the SCSI said that while renters would welcome the extension of the renter’s tax credit for another three years, small landlords would be disappointed at the failure to reduce their tax burden.

“We believe landlords will continue to leave the market, exacerbating the lack of rental supply, unless they can see better returns and that is why we are calling for increased tax incentives for small landlords,” said Mr O’Toole.

Our consumer affairs correspondent Conor Pope has broken down what the budget means for you in a short video, which you can watch here.

AIB chief economist David McNamara has said spending overruns across many departments have been absorbed into the spending base, with voted spending in 2025 some €3.7 billion higher (3.5 per cent) than was projected in last year’s budget.

“This adds up to a significant boost to the economy, close to recent budgets of 2022-24,” he said.

“The headline measures include VAT cuts for hospitality and construction sectors, at the expense of income tax cuts. On the spending side, welfare payments are set to rise, and capital spending on infrastructure projects will also rise sharply.”

However, excluding windfall corporate tax receipts, the Government will run a “large deficit” of €13.6 billion in 2026, he said.

“While the rise in infrastructure spending is welcome, the underlying fiscal deficit remains, with external risks facing the Irish economy, primarily from US tariffs.”

The organisation representing rank and file gardaí says it has been left “disappointed and completely underwhelmed” by the justice measures announced.

“Of course there is a dire and urgent need for more Garda members but there seems little or no strategy on how these numbers will materialise,” said Garda Representative Association general secretary Ronan Slevin.

“This is the third successive budget that has promised 1,000 recruits yet we have seen just over 600 come through Templemore each year which barely covers the losses through retirements and resignations.

“This budget does nothing to address the issues we have continually raised regarding the garda training allowance which sits more than €200 per week below the minimum wage and fails to tackle the challenges with retention of the members we already have.”

Don’t forget, if you have any budget-related questions for our experts, they can be submitted here and we will be on duty first thing in the morning publishing our answers.

Meanwhile, shots fired, as nurses and midwives criticise the Government for focusing on the hospitality sector rather than health.

Irish Nurses and Midwives Organisation general secretary Phil Ní Sheaghdha says the announcement of plans to hire an additional 3,300 staff into the health service next year “demonstrates a lack of awareness into the severe staffing crisis in our hospitals”.

“In cutting the VAT rate for the hospitality sector, the Government has failed to heed last week’s advice from the Fiscal Advisory Council who said that the Government could hire 11,400 additional nurses rather than cut VAT for the hospitality sector.”

Budget 2026 fails to tackle the key issues impacting second-level schools and students, according to secondary schoolteachers.

ASTI general secretary Kieran Christie said: “There is no commitment to end the chronic shortage of second-level teachers, too large class sizes, and the glaring lack of resources in schools.

“Budget 2026 is a missed opportunity for Ireland to halt its worsening teacher supply crisis.”

On class sizes, he said the majority of the new teachers announced are special educational needs posts, which will “likely be spread very thinly across primary and second-level schools, and may be partially accounted for by rising demographics”.

“What is most concerning about Budget 2026 is that if fails to address the fact that second-level class sizes are bigger than they were 17 years ago, prior to the 2008 economic crash.”

The Construction Industry Federation has welcomed the cut to VAT on new apartment sales.

The Government announced that the VAT rate on new apartment sales will be cut to 9 per cent from 13.5 per cent.

Andrew Brownlee, chief executive of the group, said VAT is a “significant input cost” and, at a time of declining apartment completions (24 per cent in 2024), the measure “should increase the viability of many apartment schemes”.

“Most apartment schemes under construction are purchased by approved housing bodies and the Land Development Agency under various Government schemes, so this measure should immediately reduce costs for those bodies,” he added.

One of the key sectors to keep an eye on in this budget is Irish exports. Simon McKeever, chief executive of the Irish Exporters Association, has said the group “respects the prudent nature” of what has been outlined in the Dáil.

“Whilst very disappointed with the lack of any meaningful measures to reduce the income tax burden, we warmly welcome the clear and distinct focus on housing in this budget,” he said.

“The lack of affordable and available accommodation remains a critical concern for Irish exporters and hampers their ability to attract and retain key talent.

“We note the focus on infrastructure investment with associated reforms promised to planning and simplification – actions will speak louder than words when it comes to these simplifications.”

He said “more could have been done” to simplify and reduce electricity bills through the removal of some of the pass-through charges applied to bills.

“With Ireland and the EU in the eye of increased international trade nationalism, we believe our original call for a US tariff relief fund may yet be needed, should international trading conditions deteriorate further,” he added.

The Small Firms Association (SFA) has described the increase to the minimum wage as “very concerning”, suggesting it will result in job cuts and closures for businesses throughout the country.

The SFA is also disappointed the Government has not introduced a temporary PRSI rebate for small businesses which would offset the latest increase in the minimum wage announced in the budget.

The group said it is encouraged with reduction in VAT from 13.5 per cent to 9 per cent for hospitality outlets, catering businesses and hairdressers. However, that reduction will only benefit around a quarter of small businesses nationwide.

Minister for Social Protection Dara Calleary had lobbied for a €12 increase to core social welfare rates, but Budget 2026 announced a €10 raise, writes Ellen Coyne.

One Family, the national organisation for one parent families, said that the increase of €10 “is not enough to keep payments in line with inflation and means social protection payments are failing to protect all those who need them from poverty”.

The organisation also criticised the lack of immediate action on childcare affordability or accessibility.

“The lack of immediate action on childcare is really disappointing and will have a significant impact on one-parent families,” Carly Bailey, policy manager of One Family, said.

“It’s unclear how Government intends to increase spaces when services are pulling out of core funding, waiting lists are rampant across the country and fees remain unaffordable for many parents.”

Focus Ireland said that Budget 2026 has failed to deliver for the record number of over 16,350 people now homeless as the Government didn’t take any decisive action on housing to help the most vulnerable in society.

The charity said it is incredible – given the scale of the human crisis – that there was no mention of homelessness for the second year in a row. There has been a 25 per cent rise in homelessness since it was last mentioned in a budget speech in October 2023, it said.

Focus Ireland director of advocacy Mike Allen said: “This budget included a lot of mentions about targeting the most vulnerable but when it comes to housing there was no targeting towards providing more low-cost or affordable housing for people who are struggling every day.

“With the new housing and homelessness plan expected to launch in the coming weeks, the absence of any reference to measures tackling Ireland’s record levels of homelessness raises serious concerns about the Government’s commitment to addressing one of the nation’s most pressing challenges.”

The National Women’s Council of Ireland has said Budget 2026 lacks ambition for women, and criticised the announcements on childcare, writes Ellen Coyne.

The Government has invested in increasing childcare places and improving accessibility, but it has not announced any measures to improve affordability

Doireann Crosson, head of policy, said the organisation welcomed the “investment in childcare and the focus on bringing in more capacity in Budget 2026”.

“However, the funding for 2,300 additional places is well below what would be needed to significantly reduce the number of approximately 50,000 children currently on waiting lists,” she said.

“We are disappointed that the additional places will be delivered through existing schemes which continues to rely on private and often for-profit providers. This approach will not address the systemic issues in our childcare system.

“Budget 2026 is a failed opportunity to start the urgently needed roll out of publicly delivered childcare and kick-start Ireland’s move towards the public system of early childhood education and care that we need.”

Homeowners who qualify for the mortgage interest relief can continue to claim a tax credit of up to €1,250 next year but that figure will fall to €625 in 2027, deputy business editor Dominic Coyle says.

He has also touched on pensions, noting that auto-enrolment was mentioned only in passing in the budget speeches.

“However, background documents show the Government is planning to amend the tax rules on retirement savings held in the new mandatory workplace pension scheme when someone dies, and also to exempt employers’ contributions from USC,” he says.

“Along with other technical amendments to the scheme, this will cost the exchequer €56 million a year.”

Bank of Ireland chief economist Conall Mac Coille has said this it is “striking” the Government has chosen to maintain a sharp 8 per cent pace of public expenditure growth, at a time when tax revenues are slowing.

“That only a €5 billion budget surplus is forecast for 2026, makes clear the bulk of the potentially unstable €32 billion corporate tax base is being spent,” he said.

“That the key income tax bands and credits remain frozen is effectively a disappointing tax hike for Irish households. However, the criticism that past income tax cuts targeted at middle-income-earners have narrowed the income tax base seems to have been taken on board.

“It’s worth remembering Ireland already has some of the lowest effective income tax rates for low and middle income earners in the OECD.”

This year’s budget is the “exact opposite” of last year’s, says Cliff Taylor in his analysis.

“This time last year, the outgoing government engaged in a bout of pre-election populism, spreading the cash around to households through tax cuts, welfare increases and a range of once-off payments,” he says.

“This year’s budget package, the first of the new Coalition, is the exact opposite. It is the anti-populist budget, offering little to middle income earners and no once-off sweeteners.”

The defence budget will jump to a record €1.49 billion next year as the Coalition moves towards a promised 50 per cent increase in military spending by 2028, writes Conor Gallagher.

The increase represents an 11 per cent increase for the Department of Defence. The extra funding will cover the purchase of big ticket items, such as sonar and radar systems, as well as a new uniform for the Defence Forces.

Other projects include new body armour, which will be acquired through a joint purchase with other EU counties, and the replenishment of depleted ammunition stocks.

Much of the increase will go on increasing Defence Forces personnel strength, which currently stands at 7,500, well below its establishment strength of 9,500. The Government has committed to increasing the size of the military to 11,500 by 2028.

Funding for 2026 will cover 400 new defence members, 50 new civilian roles and 70 additional civil servants to work in “critically important areas such as cyber security”, said Minister for Public Expenditure Jack Chambers.

There will also be funding for recruitment campaigns and training and healthcare supports.

A significant proportion of department funding will also be required for the legal costs relating to the tribunal established to examine abuse within the Defence Forces.

The Representative Association for Commissioned Officers welcomed the budget increase and said it appears the Coalition is “on track” to meet its 2028 goals.

However, it said reaching a personnel strength of 11,500 by 2028 will be a “major challenge” which will require improvements in pay and pension arrangements.

The Government has committed to eventually increasing defence spending to nearly €2 billion, taking into account inflation, in response to increasing international threats.

As we all know, the spotlight on US-Irish relations has rarely been greater due to US president Donald Trump’s tariffs and on-shoring agenda.

The budget has been broadly welcomed by the American Chamber.

Paul Sweetman, chief executive, has made particular mention of the announcement that the research and development tax credit will increase from 30 per cent to 35 per cent.

“This increase will be crucial in continuing to attract high-value research investment and enable Ireland to remain a top-tier location for research, development and innovation in the long term,” he said.

He added that the commitment to publishing an action plan “to reform Ireland’s tax regime for interest”, is in line with the group’s recommendations to introduce a “simplified, elective, interest deductibility regime”.

This, he said, “will be beneficial in ensuring alignment with international best practices and maintaining Ireland’s competitiveness as a location for US investment”.

Government plans to tax pool betting, which includes the totes operated at horse and dog tracks, from next year, writes Barry O’Halloran.

Bookies pay 2 per cent on bets placed with them in shops or online, but the levy does not apply to pool betting.

New gambling laws could allow more players that the horse and dog track tote operators to use pool betting.

Minister for Finance Paschal Donohoe fears that betting businesses may try to avoid the 2 per cent levy by switching to this system.

“So I will legislate in Budget 2027 for a separate pool betting duty charge,” he said.

“This will provide time for engagement between my department and relevant stakeholders on the design and structure of this duty.”

Don’t forget, if you have any budget-related questions for our experts, they can be submitted here and we will be on duty first thing in the morning publishing our answers.

From tax relief for making uilleann pipes to funding for footballers – our political correspondent Cormac McQuinn has pulled out eight less well-known measures in Budget 2026.

Trad music

Good news for the makers of uilleann pipes and Irish harps. An income tax relief for them is to be extended until the end of 2028. The tax relief is set to cost €500,000 next year.

Movie magic

A film tax credit for visual effects is to be enhanced at a cost of €1 million in 2026 as part of efforts to attract TV and movie productions to Ireland.

Video games

For the games industry, the Digital Games Tax Credit will be extended to the end of 2031.

Space Race

The Department of Enterprise will use part of its funding to “continue its supports of the European Space Agency Programme and maximise the potential of Irish companies to benefit from ESA contracts”.

Ammunition for Defence Forces

Bullets and shells are likely to be on the shopping list for the Defence Forces in 2026 as the allocation for the Department of Defence includes funding for the “ongoing, necessary replenishment of ammunition stocks”. There will also be the rollout of a new body armour system.

Funding for Ireland’s democracy

An Coimisiún Toghcháin, Ireland’s Electoral Commission is to be funded to the tune of €12 million in 2026 to deliver on its work promoting public awareness and increased participation in the State’s electoral and democratic processes.

Tax relief for electricity microgeneration

Households with solar panels making money selling electricity back to the grid may benefit from an extension of the income tax disregard of €400 for microgeneration. It is being extended until the end of 2028.

Football academies

There is €3 million allocated to support the establishment of League of Ireland football academies for young talent. More money is to follow in future years and Public Expenditure Minister Jack Chambers suggested it could “build a new era for football in our country”. The GAA is in the budget as well with €1.6 million in funding for inter-county players.

Motorists are facing a rise of just more than 2c per litre at the fuel pumps on the back of the increase in carbon tax charges, writes our motoring editor Michael McAleer.

But motorists will be relieved that many reliefs for low emissions or electric vehicles were extended.

The Department of Defence budget will increase by 11 per cent.

Chambers said this will provide for a “net increase” of 400 Defence Forces members, 50 new civilian jobs as well as 70 civil servants to work in “critically important areas such as cyber security”.

Chambers said infrastructure projects including military radar and the roll-out of a “new general service body armour system” will also be progressed.

Within the Department of Justice’s allocation, domestic and gender-based violence initiatives will get €11.5 million in additional funding.

Chambers said there will be further investment in processing international protection applications, as well as funding for accommodation costs.

A successor scheme to the piloted basic income for artists is to be introduced next year, Chambers has said.

A further €84.9 million for arts and culture is also being allocated for next year.

A further €433 million is being given to complete the national broadband plan, he said, and €357 million for broadcasting, which includes €65.4 million for TG4.

He said the TG4 funding includes “a €5.4 million increase to ensure high-quality Irish language content, children’s programming and expanded news service”.

The Government will double resources for its “Shared Island initiative”, Chambers said, as he announced a “new Dublin-Derry airlink is to commence”.

This involves a further billion euro out to 2035.

Chambers said 2026 will see progress on the Narrow Water Bridge and Ulster Canal restoration projects, and further programmes on tourism, bioeconomy and research.

“This Government is committed to supporting vibrant, inclusive and sustainable communities throughout Ireland where people can live, work and connect.”

A new Defence Forces uniform will be introduced, while there will be enhanced recruitment advertising; additional funding to progress maritime security; equipment and maintenance projects; training and healthcare supports.

TG4 has been allocated a total of €65.4 million for 2026, an increase of €5.4 million from this year, but only slightly more than half of the €10 million uplift it requested in its pre-budget submission.

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Chambers described Ireland as having “one of the strongest education systems in the world” and said the Department of Education and Youth will receive €13.1 billion next year.

He said this will provide for 1,717 additional special needs assistants to bring the number in the system to almost 24,900.

He said there will be an increase of 1,042 teacher posts, which includes 860 additional teachers working in special educational needs settings.

There will be additional funding for the implementation of Deis Plus and a new Deis plan for children at risk of educational disadvantage.

Chambers said there will also be an increase in the standard capitation rates paid to schools from €224 to €274 for primary and special schools, and from €386 to €406 for post-primary schools.

He said the department’s allocation of €1.6 billion for capital investment will progress the delivery of more than 300 school building projects, which will deliver additional capacity for approximately 2,800 places for special classes and special schools.

Jack Chambers has finished and Sinn Féin’s finance spokesman Pearse Doherty is on his feet. Before he addresses the budget he remembers those who lost their lives in the Creeslough fuel station explosion on the third anniversary of the disaster.

On agriculture, the Government has doubled the funding for bovine TB eradication to €85 million.

Chambers also allocated €20 million to the national sheep welfare scheme.

He added a further €20 million for the Acres biodiversity scheme, reaching €280 million next year.

The Department of Agriculture, Food and The Marine is also to allocate €35 million to the World Food Programme.

The Government recognises tourism as a “vital driver of regional development and employment”, the Minster for Public Expenditure has said.

Chambers said €232 million was being provided for the tourism services programme to “capture strategic opportunities” and enhance Ireland “on the world stage”.

Not everyone is pleased with the lack of an excise hike on alcohol. Alcohol Action Ireland, the national independent advocate to reduce alcohol, said it was “disappointed by the Government’s decision not to increase excise duties on alcohol in today’s budget”.

“The decision means this is 12th year in succession that duties have not been touched, so their public health value continues to be eroded by inflation and are now at least 15 per cent lower in real terms.”

The early years sector is to be allocated an additional €125 million next year, bringing the total funding to €1.5 billion.

More than 285,000 children will benefit from the National Childcare Scheme in 2026, an increase of 35,000, Mr Chambers said, while the ECCE scheme for early childhood care will benefit 105,000 children.

He said year four of core funding would continue, with enhancements in year five of the scheme “to improve pay for educations and school age childcare practitioners”.

“Investment in our child welfare services is a key priority for Government. This year, €1.3 billion is being provided to Tusla to pride for foster care, family support services and additional residential care placements.”

Over €3.8 billion is being allocated to the Department of Children, Disability and Equality next year for disability services, the Public Expenditure Minister said.

Jack Chambers said this would include funding for Community Based Specialist Disability Services to ensure people with disabilities receive “the right support at the right time in the right place”.

He said families waiting for assessments “will see progress” as around 6,500 private assessments would be funded to reduce delays.

He said this would fund 9,000 residential care placements, including 250 new ones next year, as well as 1,400 day services places for young people finishing school.

“To drive reform, a dedicated unit has been established in the department to lead a full review of Ireland’s disability service model.

“This unit will work hand-in-hand with disabled people, their families and representative organisations.”

The budget is to include €3 million in funding for the establishment of League of Ireland academies. The funding is part of a €10.7 million increase in funding for Sport Ireland.

He said the State has a “responsibility – but also an enormous opportunity – to nurture our brightest young talents here at home and provide them with the best environment to fulfil their potential”.

“The investment I am announcing here today is the start of a multiannual commitment from this Government to focus on grassroots and build a new era for football in our country.”

In total there will be €1.5 billion in funding to the Department of Culture, Communications and Sport.

Jack Chambers described the €27.4 billion the Department of Health will receive in funding as a “record level of investment”.

He said it will deliver 220 more hospital beds, at least 280 community beds and 500 more nursing home places.

The funding will also provide an additional €1.7 million home support hours, increased staffing for mental health services and “enhanced” community and primary care services.

The weekly fuel allowance rate will go up by €5 and has been extended to those eligible for the working family payment.

Meanwhile, Jack Chambers said the State is delivering “one of the most significant reforms in our history” through pension auto-enrolment.

He said “My Future Fund” will benefit 750,000 people over time.

The income disregard for the carer’s allowance will increase to €1,000 for a single person and €2,000 for a couple.

The domiciliary care allowance will also go up €20 to €380 per month.

Meanwhile, Chambers announced a €300 million package of supports for children and families.

It comes as part of a new 3 per cent child poverty target by 2030.

Measures include an increase in the child support payment by €8 for children under 12, and €16 for children over 12 – “the largest ever increase in the rate”.

The income threshold for the working family payment will also go up by €60, while the back-to-school clothing and footwear payment has been extended to two- and three-year-olds.

Funding for higher education will go towards 1,110 new places in social care professions to meet needs in health, disability and education sectors.

There will be an €810 million capital fund for key infrastructure projects including student accommodation at Maynooth University and UCD; two new veterinary medicine schools to almost double the number of veterinary graduates; and the development of facilities for 11 technological university facilities for Stem.

The Department of Foreign Affairs will have a €1.3 billion allocation to “expand our global footprint” with the target of 107 diplomatic missions abroad next year. Development aid will increase by €30 million.

As announced previously, Chambers has mentioned that €2 billion would be allocated to progress the MetroLink project.

Ireland’s water utility body Uisce Eireann is to be given €1.4 billion next year to “continue to build essential capacity to support new housing developments”, the Minister for Public Expenditure said.

Jack Chambers said this would also help progress the development of wastewater treatment plants.

ESB and EirGrid is to get €3.5 billion next year to help “strengthen our energy security and accelerate our transition to renewable energy”.

More than €500 million in carbon tax revenue is to be used for residential and community energy upgrade schemes, and there will be investment in retrofitting public buildings.

Ber Grogan of the Simon Communities of Ireland has said it is “refreshing to hear that housing has been at the forefront of Government’s minds” but suggests the budget “seems to be focused on landlords and developers”.

“While the Simon Communities of Ireland welcomes progress, we want to see clear and measurable commitments to delivering affordable homes, alongside stronger protections for those at risk of homelessness. We also welcome social protection increases.

“It is deeply disappointing that, yet again, there was no mention of homeless prevention, and homelessness remains invisible within the budget, and also, in the ever-present conversation around housing.”

Financial Services Ireland, the Ibec group that represents the financial services sector, has welcomed the commitment to reduce the 41 per cent rate of tax on investment in funds products to 38 per cent.

“This is an important first step to address issues in our tax system that disincentivise consumer investment in funds,” said director Patricia Callan.

The Minister for Expenditure has confirmed there will be a reduction of €500 in the student registration fee. Almost as soon as the announcement was made – in fact, just before it was made – Labour’s spokeswoman on further and higher education, Senator Laura Harmon criticised the “decision to increase student contribution fees”.

She said “Fianna Fáil and Fine Gael have yet again chosen to create additional barriers to education with Budget 2026. Despite a pledge in the Programme for Government to reduce third-level fees in the lifetime of their Government, we now see a €500 increase dressed up as a ‘decrease’ on last year’s €1,000 reduction. The cost of living is rising so it is a missed opportunity not to permanently decrease fees by €1000.”

On house building, the budget will include €2.9 billion for new-build social homes and the second-hand acquisitions programme.

There will be €1.2 billion euros for a programme to deliver “thousands of starter homes” alongside the Help to Buy scheme, as well as €300 million euros for “the regeneration of our towns and urban areas” and €205 million for “housing activation infrastructure fund”.

Some €140 million is being allocated to retrofit further social homes; and €130 million will fund up to 17,000 grants to adapt the homes of older people and people with a disability.

On the housing measures, Annette Hughes, director of economic advisory services at EY Ireland, says the many activation measures to stimulate house building activity in the budget “will assist” in reaching the revised delivery targets of 300,000 homes by 2030.

“The exchequer capital funding allocation for 2026 is the largest on record,” she says. “The extra funding for the HBFI will support SME housebuilders who need to ramp up their delivery substantially, while changes to the VAT rate for apartment construction will support viability.”

The latest tax hike on tobacco will see the cost of a pack of 20 cigarettes climb to just under €19, with a single cigarette now costing almost a euro.

Jack Chambers said there will be an additional €6.1 billion in current expenditure with the budget on capital budgets increasing by €2 billion.

This is higher than the €5.9 billion for current expenditure and €2 billion for capital expenditure that was under the Summer Economic Statement.

Mr Chambers said the Budget 2026 package includes €2 billion euros for social protection, €1.5 billion for health, €1.2 billion for public service pay agreement adjustments, and €1.4 billion for other supports.

“Overall, this will support an increase of 12,500 staff to deliver services directly to the public,” he said.

This was broken down to more than 3,370 in the health sector, 2,600 in education, and “up to” 1,000 gardaí.

Mr Chambers also said he will be setting aside €1 billion in a contingency reserve to be held centrally for “exception in-year expenditure pressures” and costs associated with Ireland hosting the EU presidency.

On the VAT changes, Deirdre Hogan, tax partner at EY Ireland, says the reduction in the rate on the sale of completed apartments will be welcomed by all.

“It is one of a number of measures introduced in Budget 2026 to alleviate the housing crisis,” she says. “However, its introduction by midnight tonight is unexpected.

“Property legislation is complex and understanding in detail what ‘completed’ means and the difference between a dwelling and an apartment will need to be considered by suppliers to ensure there are no hidden pitfalls.

“While positive news, the devil will be in the detail as to the ease of application.”

The Minister says €4.7 billion is going to the Department of Transport with €940 million for the Public Service Obligation for Public Transport. There will also be money for the ongoing roll-out of the BusConnects and Dart+ programmes in Dublin, as well as the first phase of a commuter rail programme to expand capacity in the Cork area.

There will also be money for roads projects, including the Adare bypass, the M28 Cork to Ringaskiddy road and the N5 Ballaghaderreen to Scramogue project. Some significant greenway and active travel projects will also be funded and developed next year, Chambers says.

Jack Chambers has also said the Irish people and economy have been “remarkably resilient” in the face of threats in recent years.

He praised Ireland’s long life expectancy, “excellent” educational outcomes and “high living standards”.

He said Budget 2026 “lays the foundations for our future” and “shifts the focus from isolated departmental or sectoral needs” to “broader strategic priorities”.

“This Government has taken the decision to moderate spending increases, provide more targeted and permanent measures, making the best use of resources that are available to us.”

The lack of a personal tax package means the background documents produced by the Government do not have the usual examples of “typical” households and how they are affected, writes Cliff Taylor.

They do contain tables of how different income levels fare. These show that in many cases the effective tax rate – the total tax and PRSI take as a percentage of income – will be higher in 2026 due to a PRSI rise. For those who get a wage increase, a bit more will typically be taken in tax, too.

Minister for Public Expenditure Jack Chambers has used his speech to call on people to “challenge the voices who try to use diversity to divide us”.

He said the country must celebrate differences and fly the flag “together” as he said the country “stands at a crossroads”.

Speaking in the Dáil chamber, he said for a long time Ireland traded on its advantages as a “small, open, agile” economy and how it chooses to invest, plan and manage its economic affairs now “will shape our country’s future”.

“Our vision is to create a thriving country where enterprise can flourish and people feel valued regardless of background, ethnicity, sexuality or gender.

“This is our opportunity to be a caring country defined by stability, tolerance and progress, for those who were born here and those who have chosen to make Ireland their home.

“We must challenge the voices who try to use diversity to divide us.

“We will continue to celebrate the differences that elevate our cultural identity, and our national heritage. This is the flag we must fly, moving forward together.”

On the increase in the national minimum wage, Michael Rooney, tax Partner at EY Ireland, says the move is “necessary to keep money in the pockets of those workers on low earnings who will not benefit from any significant tax reductions or additional tax credits this year”.

“This year, though those workers without an occupational pension will also contribute into the new auto enrolment pension scheme.

“For a worker doing 39 hours a week, the increase of 65c per hour will bring an additional €1,318 into their payroll but after tax, USC and employee PRSI of €345 and now an additional employee pension contribution through auto enrolment of €430 the net increase in income will be €542.

“Of course, they will benefit from having a pension in place to help fund retirement, but the impact of the increase may not be as much as they first thought.”

The Christmas double social welfare payment has just been confirmed by Chambers.

Chambers has more on housing, saying the Department of Housing will receive €11.3 billion. Some €2.9 billion will be earmarked for new-build social homes and the acquisition of second-hand housing, while €2 billion will go towards social support programmes including the Housing Assistance Payment, Rental Accommodation Scheme and Social Housing Current Expenditure Scheme.

Earlier, Paschal Donohoe said a carbon tax increase will be applied to auto fuels from Wednesday and all other fuels on May 1st next year.

The rate of the tax will go to €71 per tonne of CO2 emitted.

The revenue arising from carbon tax is estimated at €121 million next year, and €157 million for a full year.

Mr Donohoe said this revenue will be “ring-fenced to ensure that the carbon tax policy is progressive”.

He said the Government would spend this revenue on social welfare measures and other schemes to address fuel poverty “and ensure a just transition”.

He told the Dáil this involved a “socially progressive national retrofitting programme” and measures to incentivise “greener” farming.

Chambers says he is allocating €116.8 billion in 2026 – an €8.1 billion increase on this year – with €6.1 billion more for current expenditure and spending on capital projects increasing by €2 billion.

There will be an additional €2 billion for social protection, €1.5 billion for health and €1.2 billion for public service pay agreement adjustments.

“A further €1.4 billion is being provided to broaden supports in a range of other sectors,” he said.

“Overall, this will support an increase of 12,500 staff to deliver services directly to the public, including: over 3,370 in the health sector, 2,600 in the education sector and up to 1,000 in An Garda Síochána,” he said.

There will be 12,500 more public service jobs – roughly 3,300 in each of health and education and up to 1,000 in the Garda.

The Minister for Public Expenditure Jack Chambers has announced a €1 billion contingency fund to be available in 2026 for any unexpected expenditure cost or unforeseen spending.

“This will allow us to respond to exceptional in-year expenditure pressures in 2026 and will fund elements of the costs related to Ireland’s hosting of the EU presidency,” he said.

Total non-voted expenditure (which includes things such as EU contributions and interest on national debt) will be €16 billion, meaning the overall total cost of running the country next year will be about €133 billion.

Campaigners have said the 50c increase on the excise duty on a packet of 20 cigarettes, and a pro-rata increase on other tobacco products, is “unfair” on law-abiding consumers and retailers in Ireland.

The latest tax hike will push the cost of a pack of 20 cigarettes of the most popular brands to almost €19 for the first time.

In advance of the budget, the smokers’ group Forest had urged Paschal Donohoe to freeze excise duty on tobacco, arguing that a further increase would drive more smokers into the arms of criminal gangs and other illicit traders.

Simon Clark, director of Forest, said: “Purchased legally, tobacco costs more in Ireland than any other country in Europe. This latest tax hike, while relatively modest compared to last year, will drive even more smokers to the black market.

“Alternatively, many will buy their tobacco abroad where the cost is often significantly cheaper than at home.”

Although there won’t be much in the budget for many people, the Minister said he was “still acutely aware that prices remain high”.

He said that “for many necessities, including food, prices are still going in the wrong direction. This budget seeks to address this through targeted supports for those most in need in a way that is affordable for our country.”

Uncertainty was addressed on four separate occasions by the Minister for Finance while he referred to the challenges the country is facing 10 times.

The Irish Hairdressers Federation is also reacting to the VAT reduction for the hairdressing industry from 13.5 per cent to 9 per cent.

While the federation has welcomed the decision, it has also warned that the delayed introduction until July leaves thousands of small businesses in a “precarious position”.

Lisa Eccles, spokeswoman for the IHF, said the measure is “good news with a sting in the tail,” and fears many salons may not survive the 267 days before the change takes effect.

And that is that, Minister for Finance Paschal Donohoe has commended his budget to the House and Jack Chambers is up next.

The €5,000 VRT relief for EVs has been extended to the end of 2026 while the BIK regime for company cars is being extended on a tapered basis. It will be €10,000 in 2026, €5,000 in 2027, €2,500 in 2028, before being abolished in 2029.

The price of a packet of 20 cigarettes is increasing by 50 cent with a pro-rata increase on all other tobacco prices. No increase in the excise duty on alcohol.

Hardware Association Ireland (HAI) has already been on reacting to today’s budget announcement confirming the reduction of VAT from 13.5 per cent to 9 per cent on apartments.

The association has strongly welcomed the decision, describing it as one of their key pre-budget recommendations to help accelerate housing delivery.

However, HAI is also urging Government to continue working closely with the hardware and construction industry to ensure housing targets are achieved next year.

HAI chief executive Martin Markey said: “Today is a great day for our sector. We strongly welcome this decision and look forward to continuing our engagement with Government to demonstrate how we can work together to address Ireland’s housing shortages.”

The banking levy has been extended by another year with a target yield of €200 million.

Donohoe will also publish a roadmap in early 2026 to encourage households to invest, taking into account European Commission proposal last week for introduction of tax-efficient investment accounts.

Donohoe is to reduce tax on investments in funds from 41 per cent to 38 per cent, but it will still remain higher than the 33 per cent capital gains tax rate that applies to direct investments from stocks to property, writes Joe Brennan.

Under current rules, domestic investors in funds must pay a 41 per cent tax on the sale of a fund, irrespective of what income tax bracket they are in, or after eight years – whichever comes first.

The banking levy has been extended by another year with a target yield of €200 million.

The Special Assignee Relief Programme to accommodate foreign executives relocating to their Irish business units is extended for five years but minimum salary for eligibility have been raised to €125,000 “to ensure relief is appropriately calibrated”.

American Chamber had wanted salary threshold lowered from current €100,000 down to €75,000.

The Minister for Finance has announced an enhancement to the section 481 film tax credit to provide for a new 40 per cent rate of relief for productions with a minimum of €1 million of eligible expenditure on relevant visual effects work.

There will also be R&D tax credit changes with the rate increasing from 30 per cent to 35 per cent.

The digital games tax credit is extended for six years to the end of 2031.

Capital gains tax revisions will see entrepreneurial relief reformed, with the lifetime limit raised from €1 million to €1.5 million.

There will be “targeted changes” to the Universal Social Charge (USC) from January 1st, the Minister for Finance has said.

Paschal Donohoe said the 2 per cent rate band for USC will therefore rise by €1,318 to €28,700.

He said this will ensure full-time workers on minimum wage will remain outside the top rates of USC, and give a “modest benefit to all workers”.

On the overall budget, Mr Donohoe said there was “limited” scope for “significant personal tax changes”, but said the Government “will stand by” commitments to make progressive changes for income tax over the full term.

Donohoe announced a new derelict property tax, to replace the derelict sites levy, stating that dereliction is “a blight on our towns and cities”.

He said he does “not intend” for the new tax to be charged at a lower rate than the levy, which is currently set at 7 per cent of the site market value.

He said legislation for this would be brought forward next year.

Mr Donohoe also announced measures to strengthen the Living City Initiative which aims to enhance older homes and businesses.

He said it would be extended until the end of 2030, will include “over the shop” premises for residential use, and expand it to homes built before 1975 – an extra 60 years’ worth of Irish homes.

The Residential Development Stamp Duty Refund Scheme, which is due to expire at the end of 2025, is to be extended until the end of 2030, and is changing two time limits that apply – for acquisition to commencement and commencement to completion from 30 to 36 months in relation to large-scale residential development.

Donohoe described housing as being at the “forefront” of his mind while preparing the budget.

He has allocated an additional €200 million of external funding to support the Home Building Finance Ireland scheme which provides finance to home builders across the country.

Additionally, VAT on the sale of completed apartments will be reduced to 9 per cent from 13.5 per cent from Tuesday night to the end of 2030.

The residential zoned land tax has will be extended until next year allowing landowners to avail of an exemption if they “seek to have their land rezoned to reflect the genuine economic activity being carried out”.

Mr Donohoe also said he is exempting the rental profits arising from homes that fall within the Cost Rental Scheme from corporation tax.

And introducing an enhanced corporation tax deduction for “certain costs” incurred on the construction of apartment developments, and for the conversion of non-residential buildings into apartments.

The 9 per cent rate of VAT on gas and electricity bills is being extended until December 31st, 2030.

And as has been widely flagged by the Minister, the VAT rate on food and catering businesses, and for hairdressing services will be reduced from 13.5 per cent to 9 per cent from July 2026.

On personal tax, Donohoe promises to stand by the commitment to lower taxes but there is no income tax package here.

The national minimum wage goes up 65c to €14.15 per hour.

The USC 2 per cent rate band rises to €28,700 to ensure full-time workers on minimum wage will remain outside top rate of USC and giving modest benefit to workers whose income is above that amount.

Mortgage interest tax relief is extended for two years, with reduced value in final year.

The 9 per cent rate of VAT on utility bills is extended to 2030.

Donohoe has said the Government surplus will be €10.2 billion this year, and €5.1 billion in 2026.

He added that, by the end of next year, there will be €24 billion in the long-term saving funds: The Future Ireland Fund and the Climate and Nature Fund.

He said there would be €40 billion in the funds by the end of the Government’s term.

We have moved on to tax changes and Donohoe warns that “scope for significant personal tax changes is limited”.

“Government is committed to measures that will improve the overall standard of living, with a focus on affordable and permanent changes in the budgets. However, over the lifetime of this Government, I will stand by our commitment to make progressive changes to income tax if and when our economy remains strong.

“Today, I am announcing targeted changes to USC. As of the 1st of January of 2026, the national minimum wage will increase by 65 cents per hour to €14.15 cents per hour. Accordingly, I will be increasing the ceiling for the 2 per cent rate to €28,700. This increase will ensure that full-time workers on the minimum wage will remain outside the top rate of USC, while also giving a modest benefit to all workers on incomes above that amount.”

The rent tax credit is being extended for three years while the mortgage interest credit is being extended for two years with a reduction in the second year.

A new derelict property tax will be implemented and collected by the Revenue Commissioners.

The new tax will not come in at a lower rate than the current levy but there will not be legislation until 2026.

The Minister says that housing is the key priority.

“The Government is determined to use all the policies at disposal to increase supply, to alleviate pressure so that more people can have access to a home, and that is why we have committed over €5 billion in capital investment for housing delivery next year. And that is in addition to the investment by the Land Development Agency and approved housing bodies.

“We have legislated for the biggest changes to the planning system for a generation. We are implementing the national planning framework so that homes are built where they are needed and we have made significant changes to the design of homes, to help them become more affordable.

“I’ve consented to €200 million of additional external funding ... and I’ve also considered how our tax system can support additional supply, promote regeneration and tackle dereliction. Firstly, I am reducing the VAT rate as applies to the sale of completed apartments to 9 per cent from 13.5 per cent, effective from tonight until the 31st of December 2030. This is to help address the viability gap in apartment construction as part of a social policy to deliver more and higher-density apartments.”

Paschal Donohoe has said the Irish economy is forecast to grow by 3.3 per cent this year and by 2.3 per cent next year.

He said that a further 63,500 jobs are expected to be added by the end of the year and inflation is expected to remain at around 2 per cent next year.

“My department is projecting modified domestic demand, the best measurement for our domestic economy, to grow by 3.3 per cent this year and by 2.3 per cent next year.”

He also outlined that the National Development Plan to commit €275 billion in infrastructure over the next 10 years would “boost growth and job creation in the short and medium term”, as well as “increase the potential for our country”.

“This budget will secure jobs and stability at a time of global challenge.”

The VAT rate for completed apartments is cut to 9 per cent from 13 per cent from tonight until end of 2030 to encourage development.

Minister for Finance Paschal Donohoe has said Budget 2026 will “invest in our future” while also securing current jobs, prosperity and stability.

As he began his budget day speech in the Dáil chamber, he said the first budget of this Coalition Government’s term would deliver for citizens and “tackle the serious challenges of meeting our housing and investment needs”.

“This budget builds up our resilience and will help us to adopt at a time of historic challenge and change for our economy and our society,” he said.

“Our debt ratio is moving in the right direction, and has almost halved since I delivered my first budget to the house in 2016.”

He said it was “regrettable” that US tariffs were introduced and said they would impact growth in the coming years.

“This year saw greater fragmentation as widespread tariffs were introduced, the world has been pulling away from its near universal commitment to free and open trade, a commitment that benefited many, and our fortunes are connected to the world around us.”

Uncertainty is the word doing the heaviest lifting in Donohoe’s budget speech so far. He has repeatedly used it while talking about where we are and where we are likely to be in the months ahead.

The Minister says that “due to hard work of the Irish people and the right policy choices, Government is in a strong position to protect our economy and the public services that underpin it”, adding that the public finances are in “good shape”.

Donohoe has announced a budgetary package of €9.4 billion, which will see €8.1 billion allocated for public spending and 1.3 billion for taxation measures. The tax package has been reduced by €150 million “to facilitate additional spending in targeted supports for the most vulnerable”.

Full employment and real incomes are set to grow, Donohoe says, with inflation predicted to be about 2 per cent. He accepts that prices are still going up and suggests that measures will be targeted at the less-off. “This is about jobs, this is about stability,” he says.

“Protect jobs to protect growth,” he says – a phrase that is undoubtedly going to be key to the Government’s narrative in the hours and days ahead.

“We need to achieve more and we need to achieve more in a world that is dramatically changing ... uncertainty is the defining feature of the economy of the world this year,” Donohoe says before addressing the tariffs coming from the US.

“It is regrettable that tariffs were introduced ... [they] will impact growth in the coming years, so the question arises as to how we will respond to these challenges.”

And we’re off – the Minister for Finance has been given 45 minutes to deliver his speech.

Industry sources expect an uplift in the 32 per cent tax credit for the film sector, specifically aimed at Ireland’s fast-growing visual effects industry, Ian Curran writes.

Budget 2026 may also provide clarity around the start date for the unscripted production tax credit announced last year.

Approved by the European Commission in June, the credit benefits companies like Bigger Stage, which has partnered with Fox Entertainment to bring a raft of US gameshows to film in Ireland in recent years.

Just a few minutes now until Minister for Finance Paschal Donohoe takes to his feet in the Dáil chamber, which is filling up as we type. Stand by, please.

Sources have told our economics correspondent Eoin Burke Kennedy the Government is only likely to publish forecasts for tax and spending for one year ahead.

In other words, to the end of 2026, rather than for five years ahead, as other EU countries do and as the Irish Fiscal Advisory Council has been urging.

He says this is likely to draw criticism from the council, and suggests there is political disagreement about where to place the expenditure ceiling.

The pre-budget spinning has moved up a gear with Government sources suggesting it will be the biggest capital investment in history of the State, our Political Editor Pat Leahy reports.

The budget will, sources say, protect jobs, invest in future and critical infrastructure while targeting supports to those who most need it.

The sources are insisting “that the distributional analysis will show the strongest improvements in disposable income will be among lower income households, while the social protection budget will grow by €2bn. The housing budget, they say, will be 20 per cent bigger than last year and so will the disability budget. There will be funding for 1,000 extra gardaí and the highest capital investment in prisons in State’s history.”

Three things that are likely to be pushed to the fore today are:

• €10 increase on core welfare rates
• €500 cut in student fees
• 1,000 new teaching posts

It is worth pointing out that, although there is indeed going to be a €500 cut in third-level fees, there was a €1,000 cut last year and in 2023 so – it could certainly be argued – that the €500 cut is actually a €500 hike.

Have you ever found yourself wondering why we call it a budget? Well, the word that we will be using a lot today – and the one that is used when people talk about their household finances – was most likely coined in a satirical cartoon of the-then British prime minister and chancellor of the exchequer Robert Walpole in 1733.

After he published details of Britain’s finances, a cartoon in a satirical magazine featured him opening a bag of snake oils under the not entirely hilarious caption: “The Budget Opened”.

And what was a budget? In middle English and old French a budge was a small suitcase – it is part of the reason ministers still carry a briefcase into the Dáil on budget day.

So now you know.

• We have just been informed by one our most learned readers that the origins also derive from the Latin word Bulga which refers to a leather bag or knapsack.

Where will this budget leave the “prudence” argument and whether the Government risks overheating the economy and leaving the public finances exposed, asks Cliff Taylor?

Finance Minister Paschal Donohoe will make the case that the Government continues to put money aside into two funds to support spending in future, which are due to grow to €22 billion by the end of next year. Also, he will target a significant budget surplus for next year, likely to be above €5 billion and quite possibly north of €6 billion. These are two buffers against future trouble.

Critics such as the Fiscal Council and Central Bank may welcome the lack of generosity on personal tax in an economy that they warn is overheating. In fact, the income tax burden will rise a bit, which may offset the impact on demand of the other budget tax measures.

They will, however, continue to warn about Ireland’s reliance on potentially transitory corporate tax revenues. Removing an estimate of “windfall” corporate taxes from the sums leaves Ireland, before the budget, facing a potential general government deficit of close to €10 billion. These windfall revenues would be unlikely to all disappear at once, but Ireland continues to be heavily reliant on the rise in corporate tax and income tax continuing.

And speaking of timings, today’s budget is one of the earliest in modern times, coming three days sooner than last year and months ahead of what used to be the norm.

In the 1970s and 1980s budget day was in February. Then during the Celtic Tiger era budget day was moved to December, which was fine as every budget seemed to be a pre-Christmas bonanza. Then the crash happened, prompting the government of the day to move the budgets to October. Keen budget watchers may recall that Budget 2023 was in September but that was an outlier.

What can we expect in terms of timings today? Well, Minister for Finance Paschal Donohoe will kick things off with his speech starting at 1pm. About an hour later it will be Minister for Public Expenditure Jack Chambers’ turn, who will take a break for the crisis engulfing Fianna Fáil to deliver his financial statement. And then it will be the turn of the Opposition to have their say.

Measures targeted at older people needed in the budget, charity says.

Alone released its pre-budget recommendations for Government in June. Chief executive of the charity Seán Moynihan pointed to CSO data showing 45.6 per cent of older people living alone would have been at risk of poverty without once-off cost-of-living supports.

Alone’s asks range from increasing pensions and the fuel allowance to funding accessible social housing options, energy poverty initiatives and digital literacy training. The charity also called for a dedicated Commissioner for Ageing.

Coalition sources say that allocation to disability services took up a lot of the Department of Children’s budget.

Jack Horgan-Jones reports:

On childcare, we’re still not clear on where things will end up – and it’s very late in the day for a firm picture not to be emerging on something of such importance for a lot of (voting) households.

Coalition sources are saying that the allocation to disability services – now said to be upwards of €600 million, having been flagged as around €500 million on Monday evening – ate up a lot of the allocation for the Department of Children.

There is some suggestion that income thresholds for childcare subsidies could be raised – but sources are not agreeing on whether that is in the final budget agreement.

As reported last night, there will be more money for extra childcare spaces and higher wages for workers in the sector, while the back to school clothing a footwear allowance will be extended to 2- and 3-year-olds. This latter measure is being claimed by Fine Gael sources as a win for their party.

The State’s basic income scheme for artists will be put on a permanent footing in the budget.

The scheme is set to be opened up to 2,000 new entrants next year. So far it has operated on a pilot basis, with those participating being paid €325 per week.

Minister for Culture Patrick O’Donovan has agreed with Government spending ministers that the scheme will now operate on a permanent basis, with a new round due to open for applicants from September next year.

The scheme will mirror the pilot in size, although there may be room for expansion next year to 2,200 if additional funding can be found.

Minister for Finance indicates plans to bring forward “more targeted and more permanent measures” with Budget 2026.

Speaking on Tuesday morning, Mr Donohue said this approach will be “a key feature of this budget”, Vivienne Clarke reports.

He said this approach seeks to tackle “the many challenges that exist within our society and within our country”.

Priorities that will be detailed in the budget include: “The need to support investment within our economy, the need create and to protect jobs and the continued investment that is necessary to deliver the public services that our country wants.”

It is going to be a budget tax package like nothing we have seen in recent years, Cliff Taylor writes.

Usually a key budget assessment is how much households at different income levels are getting from changes to income tax credits and bands. The answer this year is: not much at all.

Bar some tweaking at the edges – and some reliefs aimed at specific groups – it will be a story of no change. This means that as wages increase, many people will end up paying a slightly higher proportion of their income in tax next year.

Instead of income tax cuts, the bulk of the €1.5 billion tax package is going in two directions. One is towards the hospitality sector in a VAT cut on food services, which is to be introduced next summer. This will be framed as an attempt to save jobs.

The second – involving significant amounts of cash – is towards the construction sector and particularly to try to spur the building of apartments. The building sector complains that apartment delivery is still not economic.

It remains to be seen whether VAT and corporate tax measures – together with recent regulatory changes – can make the difference. This budget is betting that they can.

The budget for the agriculture sector will be up on last year.

The scheme aiming to eradicate bovine tuberculosis will be fully funded with a significant increase for that over Budget 2025, Jack-Horgan Jones reports.

It affected 6,000 farms last year.

“Viability issues around homes, particularly apartments,” will be another priority, the Tánaiste said on Tuesday.

Mr Harris said that measures will be taken to reduce the cost for businesses across the country “because jobs are important”.

“Secondly we’ve got to look at viability issues around homes, particularly apartments. We have tens of thousands of apartments in this country that would have planning permission today, those planning permissions haven’t been activated, we’ve got to try to close the viability gap and we’ll take a number of steps in that today too.”

Progress on education and childcare will be among the main issues focused on in Budget 2026, the Tánaiste said.

Speaking on his way into Government buildings this morning, Simon Harris said “access, space and capacity and the lack of that is having a real effect in terms of education”, Vivienne Clark reports.

With childcare, “there’s obviously a range of issues”, Mr Harris said.

“One of the big issues that I certainly hear in my own constituency and across the country is access, space and capacity and the lack of that is having a real effect in terms of education and getting the proper kind of structural investment that we need in education, looking at things like capitation, looking at things like supporting children with special education needs and how we can do more.”

He added that there will be an “unapologetic focus in this budget on child poverty”, which would be addressed “through the social welfare code but also through investment in education and education disadvantage”.

The final budget for health will be €27.3 billion, up €1.5 billion on 2025. It’s unknown yet how much of this is needed to maintain existing services, and how much will be spending on new measures.

Regional equity of access to services, waiting times, productivity measures, public health initiatives and mental health services are expected to benefit from increased spending.

Denis Horan (63), from Drogheda, Co Louth, was diagnosed with Parkinson’s disease in 2020. He has moved back to Ireland after spending 35 years in New York. Mr Horan shares what he would like to see in terms of healthcare spending from this year’s budget.

The Government has ruled out the continuation of once-off cost-of-living measures.

This year’s budget will see a “move away” from non-permanent budget measures in addressing the cost of living, Tánaiste Simon Harris has said.

The Government has come under fire from the Opposition over plans to drop the once-off electricity credits that have helped households with energy costs in recent years. But Taoiseach Micheál Martin has promised that “there will be supports in the budget for those most in need”.

What could that look like? The most likely avenue is through the fuel allowance payment, with options to include increasing the weekly payment, extending the payment period or expanding eligibility.

We asked a renter what she wanted to see from Budget 2026. Here’s what Jane Cuppage (38), an insurance broker renting in Dún Laoghaire, had to say.

Jane pays €1,800 a month for a one-bedroom apartment, which took almost 18 months to find when she moved back from London.

How important is the budget? The €9.4 billion budget-day package only represents a fraction of what the Government spends.

It will cost about €120 billion to run the country this year, Jack-Horgan Jones reports.

This is divided between expenditure voted by the Oireachtas (€105 billion) and non-voted expenditure – which includes interest on the national debt and Ireland’s EU contributions.

Voted expenditure is divided between public sector pay and pensions (€33 billion), capital spending (€15 billion) and goods, services and welfare payments of €58 billion.

Among the departments, the biggest spenders are social welfare (€27 billion), health (€26 billion) and education (€12 billion).

The Minister for Finance has said the budget will be “fair and balanced”. In a post shared to social media yesterday, Mr Donohue said it would address the challenges of today while “investing in our country’s future”.

Good news for third-level students and parents. The budget is expected to include a €500 permanent reduction in the annual fee of €3,000.

The household income threshold for Susi grants is also rising to €120,000, potentially benefiting another 20,000 students.

This year’s budget is due to be more restrained than last. Budget 2025 was marked by pre-election expenditure – with a €2.2 billion cost-of-living package of once-off measures.

Reporters Jack-Horgan Jones and Cormac McQuinn have the headline figures.

An overall package of €9.4 billion is expected to be contained in Budget 2026.

Of this, €7.9 billion will be dedicated to spending measures and there is available €1.5 billion for tax cuts.

Looking at taxation, a reduced 9 per cent VAT rate for restaurants is to kick in from July to help support jobs in the hospitality industry. Mr Donohoe said there would be no changes to personal income tax amid a focus on jobs and investment.

Core weekly welfare payments will rise by €10, while child support payments will increase by €8 for children under 12 and €16 for those 12 and over.

Income thresholds for the working family payments will go up by €60. Meanwhile, the income disregard for the carers allowance is expected to increase by €375 for a single person up to €1,000 and €750 for a couple, to €2,000.

It’s budget day at last. Minister for Finance Paschal Donohoe – followed by Minister for Public Expenditure and Reform Jack Chambers – will be setting out the details this year, at around lunchtime.

Here is what we expect so far, and this is how The Irish Times plans to cover the big event. Follow along throughout the day for the latest updates on what looks to be the tightest budget for a number of years.

Our reporters have asked a number of people what they want from the Government in Budget 2026. Have a look at what they have to say.