Urgent Update: Budget 2026 Unveiling Set for Tuesday Amid Austerity

URGENT UPDATE: The Government of Ireland is set to unveil the 2026 budget this coming Tuesday at 1 PM. This year’s announcement is shaping up to be one of the most austere in recent history, marking a stark contrast to previous budgets that promised up to €1,000 in benefits for the public.

As concerns over economic uncertainty loom, the budget package totals €9.4 billion, which includes €1.5 billion in tax cuts and a €7.9 billion spending increase of 7.3% for the upcoming year. With the cost-of-living crisis persisting, Finance Minister Paschal Donohoe has confirmed that there will be no changes to personal income taxes, a departure from the norm where previous governments have adjusted tax bands to provide relief.

The government is currently engaged in critical negotiations over social welfare payments, including pensions. While last year saw a rise of €12 per week, sources indicate a more modest increase of €10 to €11 is expected this year unless last-minute changes are made.

“The government would rather a slower, more gradual increase,”

one senior source revealed, highlighting a cautious approach in response to economic volatility.

Housing initiatives remain a focal point, with the Government yet to re-launch its Housing for All 2.0 plan. Reports suggest anticipated tax breaks for developers, aimed at ramping up housing supply. The Rent Tax Credit is expected to be retained, but potential increases may be nominal, with sources indicating a possible boost of only €200.

In a move set to impact the hospitality sector, the VAT rate is slated to drop to 9% from 13.5%, targeting restaurants and cafes. However, there is no intention to reduce VAT for hotels, indicating a focused approach to aid the recovery of the restaurant industry.

Childcare funding remains a contentious issue, as the government shifts focus towards enhancing core funding and increasing childcare availability. Despite previous election promises of reducing costs to €200 per month, Tánaiste Simon Harris has indicated that achieving this target will extend beyond the immediate budget.

Additionally, a permanent cut to college fees is confirmed, likely worth around €500, and a new tax on vape liquid is set to commence on November 1, 2025, at a rate of 50 cents per milliliter.

The budget discussion will unfold in the Dáil with Finance Minister Donohoe presenting the budget at 1 PM, followed by Minister Chambers outlining public spending at approximately 1:45 PM. Opposition representatives will respond to the budget throughout the evening, with voting expected to start around 8 PM and continue past midnight.

As the nation awaits these crucial announcements, the focus remains on how the government’s decisions will affect everyday lives amidst ongoing economic challenges. Stay tuned for further updates as this story develops.