Paul Gogarty (Dublin Mid West, Independent)

I welcome the opportunity to speak on budget 2026. In this contribution, I would like to mainly focus on the macro issues and some of the key measures announced, while in my slot tomorrow I hope to go more into individual measures in terms of what is welcome, what is unwelcome and what is a missed opportunity. There are plenty of missed opportunities both day to day and strategic. First, and I do not think too many people have, we need to look at the context. This budget has echoes of 2007. In the budget before the election of that year, all political parties, including the one I was then a member of, albeit to a lesser extent, called for increased spending across the board. People ignored the signs where we were depending on the service sector to keep the party going. It appeared as if the Celtic tiger would never end. While some like Anne Pettifor and Nouriel Roubini sounded warnings internationally, not to mention our own Jim Power and David McWilliams, here in Ireland few politicians if any thought for a second that a Wile E. Coyote moment was coming and that things would fall off a cliff globally and particularly in Irish finance. If they did, nobody was letting on. Fianna Fáil was re-elected for a third successive term on the back of a massive giveaway budget. After just a few months in office, the mood music changed. The budget of October 2007 was a more muted affair, still splashing the cash, but there was a knowledge that the revenues were beginning to dry up. The global economic crash and banking crisis that followed hit many countries worldwide. However, if Fianna Fáil's economic policies post-2000 made the boom boomier, they also made the crash an absolute wreck. We know how the rest turned out. Tough, unpopular decisions had to be made to clean up the mess and policies were put in place to ensure that such a disaster could never happen again. Or could it?

One of the measures put in place was the establishment of the Irish Fiscal Advisory Council, the aim of which was to provide independent oversight and not let politicians get carried away. It is always focused on financial prudence but for some years - it was especially relevant post Covid - the advisory council, the so-called watchdog, has being urging extra-special caution. It warns that the corporate tax receipts windfall could dry up at any time and should not be factored into economic deliberations. Before this budget, it stated:

Given that the economy is performing well, this is not a time for a large budget package. Budgetary policy is already providing significant support. After excluding excess corporation tax receipts, the government is spending more than [it] collects in underlying revenue.

The Government is spending more than it collects in underlying revenue. Just think about that. After excluding these excess corporation tax receipts, the Government is not heeding the call. Or, rather, it has heeded the call this year but it did not in previous years. It did set a relatively small portion aside for areas that were historically underfunded. The Minister, Deputy Donohoe, said at the start of his contribution that uncertainty was the defining feature of the global economy this year. Indeed it is, but uncertainty was predicted before Trump's tariffs and any truly fiscally responsible Government would have reflected this in decisions made during last year's giveaway budget. If a little dampening down was done last year in reducing the sweeteners, there might have been a little more in the coffers this year and its reduction in largess would not have been noticed to the same extent.

This budget talks the talk on being financially responsible but shows no signs of cutting wastage and still finds room for money to be thrown out, albeit to the wrong sectors. On the day-to-day side of things, this budget is a missed opportunity to help carers, people with disabilities and other vulnerable people, particularly in early years education. It could have provided a bit more to help those dealing with the increased cost of living. The measures that have been announced in these areas are so incremental as to have no meaningful effect. Instead, we have helped wealthy developers and investors with an ill-thought-out and premature reduction in VAT for apartment building, a move that ignores the fundamental issues behind the housing crisis, which is one primarily of supply, from infrastructure to planning, to tendering, to training enough construction workers. It is also not helped by an overseas investment policy that places jobs for non-essential workers - localisation workers, for example - in the highest demand housing areas.

We have seen a generalised reduction in VAT for the hospitality sector, and while the small café benefits, so, too, does the larger entity that is making massive profits. Ronald McDonald gets the tax breaks while the McDonald family members living in Clondalkin, Lucan, Palmerstown and so on struggle to keep up with costs. What would have been more sensible was the extension of the increasing cost of business grant or the power-up grant, which could have been more targeted for small business in this sector.

On the macro level, I welcome the medium-term fiscal and structural plan, which reflects the advisory council's call for more medium-term planning. It is not quite multi-annual funding but it is a start. As revenues have been so unprecedented in recent years, we have been putting away some money. We put away €2 billion in 2022 and €4 billion in 2023, which the Fiscal Advisory Council said was relatively small in comparison to the overall estimated excess corporation tax receipts. Last year, as the Minister outlined, the national reserve fund was dissolved but transferred approximately €8.4 billion to the new future fund and the Infrastructure, Climate and Nature Fund. Further funds have been added this year, which on one hand I welcome for the prudence, but given what is facing us down the line, we are missing out on opportunities that will cost us all massively in the long run. As the Minister, Deputy Donohoe, stated, if we are going to have €40 billion built up in long-term funds by the end of the Government term, we are actually destroying our future. What we are missing is strategic infrastructural planning where we use that windfall receipt and the Apple money to put us on a more stable footing in the years ahead such as by front-loading the water services infrastructure, improving the grid and energy generation potential to make us a net exporter rather than the €6 billion we are spending on imports, and gearing up for a massive increase in homegrown prefabricated and modular housing and apprenticeships to go alongside it. I will elaborate further on some of these issues tomorrow as well as on some of specifics of the budget, but on a macro level, we are missing an opportunity where we could have started the long-term planning in this budget.

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