Seanad debates
Tuesday, 7 October 2025
Budget 2026 (Finance): Statements
2:00 am
Mark Daly (Fianna Fail)
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The Minister of State at the Department of Finance, Deputy Troy, is most welcome to Seanad Éireann. I thank him for being here. He has ten minutes, all group spokespersons have eight minutes, and all other Senators have five minutes.
Robert Troy (Longford-Westmeath, Fianna Fail)
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I am pleased to appear before the Seanad to discuss budget 2026 following its presentation earlier to Dáil Éireann. Our economy has proven to be incredibly resilient. This is based on the transformation of Ireland in recent decades and the steps taken by successive Governments to return the public finances to health.
There are now 2.8 million people at work, more than the number who lived here in 1961. In addition, people are living longer and healthier lives. While this progress is something we can all be proud of, we also understand that the benefits of this are not felt equally. The cost of living and access to homeownership are a concern for many. Acknowledging the progress we have made, we also acknowledge that we need to achieve more.
Budget 2026 is framed at a time of great uncertainty. We have conflict on our doorstep in Europe and significant uncertainty as a result of tariffs and trade wars. As one of the main beneficiaries of peace, partnership and global prosperity in recent decades, Ireland’s fortunes are connected to the world around us. While the EU–US framework agreement is welcomed for providing a level of certainty, a general tariff rate of 15% will, of course, affect growth over the coming years. As such, it is more pressing than ever that this Government present a budget that supports growth and protects jobs.
To help to achieve this, we recently published the updated national development plan. The plan commits to increase capital expenditure, with a focus on investment in energy, water, housing and transport. These areas are critical to improving the attractiveness of our economy for investment and making Ireland a better place to live. It is something I see and hear in my brief. Financial services companies want to continue to do business in Ireland, and we must ensure that we can create an environment that encourages them to do so.
Notwithstanding the high level of uncertainty, modified domestic demand, the best measure of domestic activity, is projected to grow by close to 3.3% this year and by 2.3% next year. It is expected that domestic activity will be supported by the continued strength of our labour market. Employment in Ireland reached a record high of 2.8 million people this year and is projected to grow again next year. Aided by lower inflation, real incomes are also expected to continue to grow. That said, while inflation is falling, price levels remain high for many necessities, such as food. This is why budget 2026 includes targeted measures to support those most in need, benefiting those on the lowest incomes, households with disabilities and lone parents the most.
We have the capacity to improve public services because the public finances are in reasonably good shape. We have run budget surpluses and will do so again this year. This helps to reduce the debt burden, and to save funds for the future.
However, the economy’s reliance on the FDI sector presents a clear risk to the public finances. We have seen volatility in corporation tax receipts in recent months. We know that this overreliance poses a vulnerability. Given this risk and the need to prepare for structural challenges, the Government has agreed to continue putting money into the Future Ireland Fund as well as the Infrastructure, Climate and Nature Fund. By the end of 2026, it is projected that the total value of these funds will be around €24 billion.
Budget 2026 prioritises capital investment. This investment is critical if we are to unlock the bottlenecks that would constrain economic growth. Therefore, a balance must be struck between increasing public expenditure now and investing to ensure the economy can maintain solid growth in the future. I believe this budget strikes that balance.
Let me turn to the individual budget measures. We all know housing is the key challenge facing our country. To help address the viability gap in apartment construction, the VAT rate on the sale of completed apartments is being reduced from 13.5% to 9% from midnight tonight.
We are also introducing an enhanced corporation tax deduction for certain costs incurred on the construction of apartments and for the conversion of non-residential buildings into apartments. This will improve the viability of such projects.
In this budget, the Government is committed to measures that will improve the overall standard of living, with an emphasis on affordable, permanent measures. This has meant that the scope for significant tax changes is limited. However, we will stand by our commitment to make progressive changes to income tax over the course of this Government if the economy remains strong.
This budget is introducing a targeted reduction in USC. On 1 January 2026, the national minimum wage will increase by 65 cent per hour to €14.15 per hour.Accordingly, the ceiling for the 2% band rate will be increased to €28,700. This ensures that full-time workers on minimum wage will remain outside the top rate of USC and gives a modest benefit to all whose income is above that threshold.
The rent tax credit has proven to be a meaningful support for renters. Understanding the cost pressures faced by individuals and families, budget 2026 is extending this measure to the end of 2028. In relation to homeowners, the mortgage interest tax relief is being extended by another two years with a reduced value of the relief applying in the final year.
Recognising that energy prices remain elevated and to help alleviate cost pressures facing households, the 9% rate of VAT on gas and electricity bills is being extended until 31 December 2030.
As outlined in the programme for Government, to further support business the VAT rate on food and catering businesses, and for hairdressing services, is being reduced from 13.5% to 9% from 1 July 2026.
In a challenging global environment, research and development credits are essential to Ireland’s competitiveness. Recognising this, this credit will increase from 30% to 35% and the first year payment threshold will increase to €87,500. This is an important measure. It is a significant attraction for companies who want to establish and grow here, and can help diversify our corporate tax base.
Tax simplification is a key reform for supporting businesses. Last year, to enhance Ireland’s competitiveness for multinational businesses, a participation exemption for foreign dividends was introduced to simplify double tax relief. This year, these rules will be enhanced, for example providing for technical amendments to improve the reliefs operation. If we want to make good on our promises to further develop infrastructure, as well as activating the significant level of capital sitting idle, or indeed losing money, on demand deposit accounts, we need to continue to promote and enhance our funds industry. I particularly welcome these measures.
The EU savings and investments union is key to moving more savings into investment. This will help to grow businesses and increase the return on investment for citizens. Recognising the importance of encouraging retail investment, the rate of taxation applied to Irish and equivalent offshore funds and foreign life assurance products is being reduced from 41% to 38%.
A roadmap will be published early next year which will consider issues raised in the Funds Sector 2030 report and the European Commission’s recommendation on savings and investment accounts. This roadmap will set out our approach to simplifying the tax framework to encourage retail investment.
The investment funds and asset management industry in Ireland has a leading position globally. It is a significant employer supporting almost 37,500 jobs.
In line with the commitment in the programme for Government, an implementation plan for the Funds Sector 2030 report is being published today. While the report recommended a public consultation on potential options for an entity level tax for Irish real estate funds, IREFs, the Department will instead undertake a public consultation on proposals to simplify the IREF regime without limiting its effectiveness. I am pleased to announce that the insurance compensation fund levy will be reduced from 2% to 1% from 1 January 2026. This measure will reduce the level of insurance contributions by approximately €57 million next year and, in turn, should have a direct and positive impact on the cost of insurance for motorists and homeowners.
Agriculture plays a key role in our society and economy. As such, the farm consolidation relief, farm restructuring relief and the young trained farmer relief are being extended to 2029. The accelerated capital allowance scheme is also being extended for another four years. In addition, the scope of farm restructuring relief from capital gains tax is being expanded to include woodlands and forestry.
This budget protects jobs, boosting the economy’s resilience. It focuses on strengthening our competitiveness, while meeting the needs of our people today and in the future. To achieve this, we have to strike the balance between increasing investment and moderating the growth in day-to-day spending.
We are determined to meet the challenges we face through investing in our people, jobs and homes and to take action to match our hope and ambitions for tomorrow.
Pat Casey (Fianna Fail)
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I welcome the Minister of State to the House. Budget 2026 is a forward-looking and pragmatic plan that invests in Ireland's future while safeguarding the jobs, prosperity and stability of today. It also tackles the urgent challenges we are facing in housing and infrastructure while also building the resilience we need to navigate an era of profound global and domestic change.
As the first budget of this Government's term, it sets out a clear tone for sustained delivery in the years ahead. Our economy continues to demonstrate remarkable strength with 2.8 million in employment and life expectancy now reaching 83 years.
We have made real progress in restoring public finances yet we are acutely aware of many households continuing to feel the pressures of the rising living costs and ongoing housing concerns. In a world marked by uncertainty and shifting global dynamics, Ireland remains steadfast in its commitment to international co-operation and open trade.
I welcome this budget as it reflects the strength of our economy, the resilience of our people and the enduring values of our Republic. It is a budget that protects the vulnerable, supports working families and invests in the long-term future of our country.
At its heart, budget 2026 is about fairness. It delivers a €10 weekly increase in core social protection payments for pensioners, carers, people with disabilities and lone parents. These are not token gestures, they are targeted permanent supports that will make a real difference. The increases in child benefit - €8 for children aged under 12 and €16 for those over 12 - is the largest in the history of the scheme and is a direct investment in families and tackling child poverty. The carer's allowance income disregard has been significantly increased up to €1,000 for individuals and €2,000 for couples - a long-standing Fianna Fáil priority. The working family payment threshold is rising by €60 a week helping low-income families to make work pay.
Housing and affordability remains the defining challenge of our time and this budget responds with scale and urgency: €2.9 billion for new social homes and second-hand acquisitions, €1.2 billion for starter homes through affordability schemes, €140 million for retrofitting social homes and €130 million for 17,000 adaptation grants for older people or people with disabilities.
This budget includes a comprehensive and balanced tax package that supports workers, renters, entrepreneurs and families. The national minimum wage will increase to €14.15 per hour in 2026. The USC 2% rate band has increased by €1,380 ensuring that full-time minimum wage workers remain outside the higher USC rates. The rent tax credit is extended to 2028 supporting nearly 400,000 renters and providing certainty for tenants. The 9% VAT rate on gas and electricity is extended to 2030, easing energy costs for households during a time of global uncertainty.
The €500 reduction in student contribution fees will benefit over 100,000 students making third level education more affordable. The research and development tax credit has increased to 35% supporting innovation, high-quality jobs and Ireland's global competitiveness. The 9% VAT rate on apartment sales will help close the viability gap in construction and boost housing supply, particularly in urban areas. The revised entrepreneur relief lifetime limit has increased from €1 million to €1.5 million supporting Irish business owners and job creators. The digital games tax credit has been extended to 2031 and the new 40% film tax rate has been introduced for visual effects works supporting Ireland's creative industries. These are not giveaways. They are smart targeted tax changes that support affordability, innovation and long-term sustainability.
Fianna Fáil has always believed that education is our greatest equaliser and this budget delivers with over 1,700 new SNAs and 1,000 new teaching posts, expanded access to the national childcare scheme with over 285,000 children, increased capitation grants for schools, major investment in school buildings and special education places, and a €125 million increase in early years funding, bringing a total investment of €1.5 billion. In the area of health and disability, there is a budget of €27.4 billion for health and €3.8 billion for disability services. This is a caring and ambitious budget. There will be 220 new acute hospital beds and 280 community beds, €1.7 million in additional home support hours, 9,000 people will receive residential care and 1,400 school leavers will be supported with day services. The budget also funds 10,000 overnight and 15,000 day respite sessions and 6,500 private assessments to reduce waiting lists. This is about building a health and disability system that is inclusive, responsive and future proofed.
In the area of climate and energy, budget 2026 ensures that climate action is fair and just. A sum of €558 million in carbon tax revenue will fund energy upgrades for homes and communities. The warmer homes scheme has seen an 11-fold increase in funding since 2020. The accelerated capital allowance scheme for energy efficient equipment and gas vehicles has been extended to 2030. The €5,000 VRT for electric vehicles has been extended to 2026 and a new zero-emission vehicle category has been introduced for the lowest benefit-in-kind rates. We are delivering climate action that supports people, not punishes them, and that is our approach.
On jobs and enterprise, the budget supports Irish enterprise in rural communities. It allocates €1.3 billion for enterprise innovation and job creation and increased funding for Enterprise Ireland and the IDA to support scaling and attracting investment. There is an allocation of €611 million for rural and community development, including €192 million for rural affairs and €260 million for community supports. A 9% VAT rate on food, catering and hairdressing will be introduced from 1 July.
Budget 2026 is a budget of fairness, vision and values. It protects the vulnerable, supports working families and invests in our future. Fianna Fáil's influence is clear. It is in the social support, housing investment, tax fairness and long-term planning that underpins the budget.
Gerard Craughwell (Independent)
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The Minister of State is welcome to the House. In his opening comments, he addressed the uncertainty in the world we currently live in and the problems that exist on our eastern flank and in various other parts of the world. It is only right and proper that, as a member of the security and defence committee and a former member of the Irish Defence Forces, I concentrate my comments on matters relating to security and defence.
I welcome the allocation of €1.49 billion in the budget for Votes 35 and 36 for 2026. Taking inflation into account, however, what is the actual percentage increase from the 2025 budget? That is the figure that must be scrutinised, parsed and analysed. How many times must the proposed primary radar system, the new advanced combat radio suite, an upgraded armoured personnel carrier fleet and general service body armour personal protection kits be announced?
As far as I can recall, this is the 12th announcement of such upgrades for the Defence Forces. The Minister, Deputy Chambers, opened his introduction to the defence segment of the budget by stating that Ireland is committed to safeguarding our national security while contributing to international peace and security. That is a given for any developed democracy, but is Ireland committed to the sovereignty of the State? Sovereignty is defined in international politics and diplomatic parlance as being, inter alia, a state's ability to control and defend its borders on land, at sea and in the air. Using this internationally accepted metric, Ireland is an independent state. However, it is most certainly not a sovereign state within the internationally accepted meaning of the word.
Could Ireland, for example, repeat what happened in 2001, namely the foot and mouth problem in Northern Ireland? Could we seal the 399 km Border with Northern Ireland and the 281 recognised Border crossings in the economic interests of the State, as was brilliantly achieved by An Garda Síochána, the Defence Forces, the Department of agriculture officials and the customs service in 2001? Of course not. The State has hollowed out numerous Garda stations on or adjacent to the Border with Northern Ireland. The Defence Forces is a significantly diminished force and a shadow of what it was in 2001. Now, only two geographically dispersed barracks, Finner Camp in Donegal and Dundalk in County Louth, are in direct proximity to the Border. The answer to whether we could close the Border is a resounding "No". That is strike one against Ireland's sovereignty.
Can Ireland, with its Air Corps and Naval Service in operational capability life support, secure its air and sea border? Again, the answer is a resounding "No". Does the budget for 2026 credibly advance Ireland's journey to sovereignty? No, it does not. Regarding the ambition of the Commission on the Defence Forces to achieve a level of ambition 2 by 2028, the budget shows no credible sign of achieving that aim. A net strength increase of 400 Defence Forces personnel in 2026, as indicated by the Minister, Deputy Chambers, in his 2026 budget, is not credible when the target strength in 2028 will be 11,500 personnel, 4,000 more than the current effective strength of the Defence Forces of 7,500. An increase in net strength of 400 in 2026 for the Defence Forces is a substantial deficit in ambition.
Generic generalities best define the language of the Minister, Deputy Chambers, in his budget speech. It is telling that the defence allocation is in the very last segment of the Minister's speech, prior to his short concluding remarks. It is obvious that defence for this and previous governments over the decades is the hind tit and last in the queue for the budget.
All of this is happening when the world is in a state of security crisis, including the war on the eastern border of the European Union, the genocidal slaughter ongoing in Gaza and the airports and military airfields of some of our EU partners being paralysed by targeted drone swarming. This is an important point as we move towards the Presidency of the European Union in mid-2026. How would Ireland respond if Dublin, Cork, Shannon and Knock airports were drone swarmed simultaneously? What State force would respond? The only Defence Forces air defence regiment was disbanded in 2012.
In his speech, the Minister, Deputy Chambers, averted to the increase in the number of gardaí by 1,000 in 2026 and the Defence Forces by 420. Without changes to the post-2013 pension, which I have been harping on about for the past ten years, we are only fooling ourselves. There very well may be an increase in those wishing to join front-line services, but without experienced personnel to train them, they will very quickly hit bottlenecks. There will simply not be the instructors to train and mentor new recruits. Very quickly after training, the new recruits will be awakened to the paltry pension that awaits them on completion of their service and will exit the service early. There must be an urgent review of the pay structures in the Defence Forces. The pay was bottom-loaded some time ago to improve recruitment, but we must look at the pay structures that reward ambition as people move up the ranks. We must review the pay differentials reflecting the new responsibilities that one takes on.
The post-2013 pension scheme must be seen as the greatest incentive to leave front-line services, that is, the Garda, Defence Forces, the Prison Service and fire service. It is destroying these services, and for some unknown reason, the people who advise Ministers with respect to taxation and pension schemes fail to take this on board. They are seeing people voting with their feet and leaving such services, yet the Government will not take on board the fact the pension scheme that was introduced is not a one size fits all.It is not the Minister of State's fault, but that of the people who advise Ministers and reassure them that certain actions will result in certain savings to the State. There is no saving to the State if we cannot retain people who have been expertly trained at a massive cost to the State. While there are many good things in this budget, sadly, where defence and security are concerned, it is a failure.
I thank the Minister of State for his time and for being here.
Joe O'Reilly (Fine Gael)
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Cuirim fáilte roimh an Aire Stáit, an Teachta Troy, go dtí an díospóireacht tábhachtach seo ar an mbúiséad agus ar an todhchaí.
The measure of a good budget must surely be the degree to which it is strategically sound for the medium- and long-term future and the degree to which it works to achieve a fair, cohesive society, prioritising the needs of the most vulnerable. This budget goes a long way to achieving those objectives. Budget 2026 is worth €9.4 billion, of which €8.1 billion is in spending and €1.3 billion is in tax measures. It increases spending by 7% while maintaining a surplus as outlined by the Minister of State. This is building on our success in restoring the economy after the property crash, maintaining employment in the face of the savage pandemic and cushioning our people in the face of the inflationary spiral caused by the illegal invasion of Ukraine.
I will first address capital spending in this budget, which boosts productive capacity in the economy, which is crucial. The greatest challenge confronting our people at the moment is housing. Apart from its obvious impact on young people and their dreams, it has implications for inward investment, maintaining employment and social cohesion. This budget allocates total capital funding for housing of €5.2 billion. This will be used to develop 25,000 new homes through public housing and starter home initiatives. This will involve a €205 million new housing activation fund to support the housing activation office and €2.5 billion for water services, which is crucial. A great example known to my colleague, Senator Tully, and me is that in Virginia, County Cavan - one of the most beautiful towns in Ireland, which is crying out for housing - the absence of a satisfactory wastewater treatment plant has literally stopped any housing being developed for the past five years. That is thankfully in production. This is why the €2.5 billion for water services is crucial. The VAT reduction for apartment building is similarly important to get the necessary apartments built, which often constitute starter homes for young people.
If housing is a glaring current need, demographic change and social pressure make capital and current spending in health crucial. This budget provides for 555 new beds across hospital and community services, an additional 3,400 medical staff, 1.7 million additional home support hours, €8.9 million for a national cancer programme and 500 additional nursing home places, reforming the health services. An additional €6.8 million in this budget will be spent on disability services, which is an extra 20%. There is a crying need for that. The cry has been well orchestrated by many, including me, over the years. That is important.
There will be a €64 million increase for the national childcare scheme, which is important for early childhood education and support for childcare in general. There will be 1,770 more SNAs in our schools next year. What an advance that is. There will be 860 additional special needs teachers. They are a great vehicle to achieve equality in society, an equal chance and a fairer society.
There is an important fund to boost infrastructure, creating productive capacity across all areas. This budget achieves that.
Turning to the area of fairness, social cohesion and building an egalitarian society, as a member of the labour panel and a representative nominated by ICTU, I am happy there will be a 65 cent increase in the minimum wage, bringing it up to €14.15, at the top of Europe. As was explained by Senator Casey, the requisite taxation measures have been taken to ensure that has an effect and that it is a real increase.
Also in the area of social cohesion and fairness and creating a proper equal society, there will be a €10 across the board increase in welfare payments. Critically, Senator Casey said that Fianna Fáil advocated for this. My party colleagues and I know this; I am a strong advocate, as are all the colleagues behind me in the parliamentary party. In fact we want ultimately the removal of the means test because it is efficacious to keep people in their homes for every reason, if that is where they want to be. There is an economic imperative to do it, a social imperative and a whole lot of reasons. There is no need to insult an intelligent audience by going through those. Suffice to say, this budget will allow single people who earn up to €1,000 per week to get the carer's allowance and a couple or family of any description who earn up to €2,000 per week. That is crucial. The expansion of access to the carer's allowance is an important social reform.
Ireland is fundamentally an agricultural society. It has transformed over the years, but it is at the base. I had a wonderful morning at an open day in Lakeland Dairies at Bailieborough, County Cavan this morning where huge work is being done creating exports and jobs. We need a farming hinterland to keep that food production industry going. It is important we achieve succession in farming. For that reason, the various schemes and tax initiatives that allow succession planning in farming are being kept in place until 2029 by this budget. Critically, there is an additional €85 million for TB eradication in this budget. That is important.
We have €33 million for the broadband scheme. The broadband plan is one of the great successes of contemporary Ireland, facilitating home working, digital hubs and so on.
The budget is strategically well structured. It is based on sound principles of giving the economy productive capacity and, at the same time, achieving social fairness and working towards a fairer society. There are a lot more elements of the budget than I can address in an eight-minute speech. I will leave it there for now. We will come back to it on other occasions.
Conor Murphy (Sinn Fein)
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Cuirim fáilte roimh an Aire Stáit. I welcome the Minister of State to the Chamber. I regret I do not have much of the same sentiment about the budget as I heard in the statements from him or in the Dáil earlier. This is the first budget of the new coalition and it is easy to see from it that the election is very much in the rear-view mirror of the Government. It has managed to cling on with the help of Michael Lowry and his clique, so ordinary families and workers have now been forgotten. As prices at the tills soar, rents get higher and higher, childcare costs cripple families, insurance costs spiral out of control and energy costs face double-digit increases, the Government has not offered any cost-of-living package.In an economy that the Government says is resilient, even buoyant, the cold of the coming winter will bite hard as the Government cuts energy credits that people rely on. Record numbers are already in default on electricity payments. What does the Government think will be the outcome of removing energy credits?
We know the pressures that people are under. We hear it all the time. In fact, during the last election campaign, this was the number one topic, yet it has not featured in this budget. In our alternative budget, we have costed a €2.5 billion suite of cost-of-living measures, including €450 in energy credits, a ban on rent increases, childcare fees of just €10 per child per day and a reduction in third level fees by €1,500 in 2026 while working towards complete abolition. These are just some of the things the Government could have done.
Last month, the Government announced a target of reducing child poverty by 3% by 2030. No child in Ireland should be living in poverty. Successive Governments since the beginning of the State have failed to cherish all of the children of the nation. Unfortunately, the budget announced today is the latest in a long line of failed opportunities. Budgets are about choices - who to support and who to burden. For a century, the interests of the rich and powerful have trumped the interests of ordinary citizens and those working more and more just to stand still. However, the developers have not been forgotten in this budget. The Minister of State knows who will benefit from a decision to lower VAT on apartments. It will not be the first-time buyer looking to get out of their parents’ spare room, the family living for years in a hotel room, or the couple delaying starting a family because they have nowhere to live. No, it will be the developers and the investors laughing all the way to the banks, the same bailed-out banks that the Government refused to tax on their billion-euro profits.
Sinn Féin would have made completely different choices. We put forward a €13.4 billion package, €4 billion more than the Government is offering. The vast majority of this would have been spent on providing houses for citizens. The fundamental difference is that this Government uses housing as a commodity, something to be bought and sold or rented for profit. Incredibly, the Government allocated only €1.3 billion for taxation measures. We would have taken a different approach. We would raise tax receipts from banks, landlords and the wealthiest, those who can afford to pay, not hard-pressed families struggling to get by every week. We would abolish the universal social charge on the first €40,000 of income, phase out property tax, cut carbon taxes and increase the renter’s tax credit. We would scrap tax reliefs for landlords, increase the bank levy and introduce a solidarity tax of 3% on individual income above €100,000. These are choices we would make. These are fair measures.
Unfortunately, the budget once again misses an opportunity to prioritise planning for the future through all-Ireland economic growth. The Government should really be working towards constitutional change that would turbocharge the national economy. Many economists have predicted the financial dividend that unity could bring, but the truth is that senior Government figures have set their face against that. They claim the time is not right to begin planning for unity, yet little is done to remove the obstacles to fulfilling the economic potential of our country. In saying that, I recognise today's announcement regarding the Derry-Dublin flight, although it has been a long time coming. Let us imagine the enhanced resilience and productivity of our economy with a single business sector, agri-sector, arts sector and tourism sector, the huge growth areas of retrofitting for the green economy and the development of renewable energy that simply makes no sense to address in a partitioned way. Real ambition for the future of this place would see active planning through the establishment of a citizens’ assembly on Irish unity, supported by appropriate budgets for the benefit of all who live here.
In this time of great wealth for the State, the Government has chosen to concentrate that wealth in the hands of a few, while many will go without. Sinn Féin knows that this is the people's money, not the Government’s money. It should have been used to create a fairer society, one that was promised by the Government parties in their election manifestoes. Unfortunately, we are back to business as usual. Hard-pressed workers and families will continue to suffer from flawed Government policies. It could have been so much better.
Patricia Stephenson (Social Democrats)
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I wish to share time with Senator Cosgrove.
Patricia Stephenson (Social Democrats)
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This budget is a missed opportunity to deliver for families and women, and childcare in particular is an example of that. The budget does not address the Government’s election promise to cap fees at €200 per month. Some families are paying more than €1,000 per month at the moment and have been for quite a while. That is leading to women making decisions about not going back to work after having children, such is the cost of childcare. So much for women's equality when women are making decisions about remaining at home because they cannot afford to send their kids to childcare. The cost of childcare continues to soar and, at the same time, workers in the sector are struggling with precarious hours and incredibly low pay. This budget has done nothing to address those issues. We need to roll out a public model of childcare if we are going to address the root causes of this crisis.
When it comes to disability, this budget is a failed opportunity for people living with disabilities, who, I am sure, are reeling from what disability rights organisations are describing as a big step backwards for people living with disabilities. Shamefully, this budget could leave disabled people €1,400 worse off a year. I do not know how we can stand here and call that progress. The Government has not put forward any measures to address the cost of disability. I find it disingenuous when, on the one hand, we are talking about supporting the disability sector, but we are not delivering on one of the key asks of disability advocates, specifically in the form of the incredibly cruel and inhumane means test for carers. As we all know, the State saves billions off the back of the unpaid work of carers. They are essential workers in our society but this budget does not lift the means test for them. The budget also does not acknowledge the extra financial pressures faced by disabled people every day. What the Government has decided to do today is abandon disabled people and force them into deeper poverty and exclusion.
Is there any better example than the “McBudget” giveaway to the hospitality industry sector in a blanket tax cut that is going to put money into the pockets of McDonald's and Starbucks? McDonald's recorded a €42 million profit last year. Why does it need a VAT reduction? The budget is putting money into the pockets of people making huge profits instead of taking a targeted approach to support small, independent, community-based coffee shops, as the Social Democrats proposed in our alternative budget. The VAT reduction will not do anything for families, specifically the 300,000 families who are already living with energy arrears. This is before the winter months kick in and higher energy costs are really going to affect them.
Today, the Government could have chosen to lift children out of poverty. There are almost 200,000 children living in poverty in Ireland. How appalling for a country as wealthy as we are. This budget could have introduced a second tier of child benefit but yet again, the Government made a choice - a political choice, a social choice - not to do that. The Social Democrats were not alone in thinking that a second tier of child benefit was a good idea. It was first proposed back in 2012 by the official advisory group on tax and social welfare. This is a practical way to address child poverty but instead, the budget is putting money into the hands of developers and the owners of fast food chains.
Today, the Government chose to move away from the blanket energy credits. I commend it on this because it was spending millions on second-homers. However, instead of keeping energy credits for those most in need, it decided to scrap them altogether. I do not understand why the Government could not have kept targeted supports for those most in need as energy costs soar.
The budget is not just a document but a demonstration of priorities. It reflects what matters to those in government. People across the country today are going to look at this budget and, honestly, they are going to feel like they do not matter. It is clear that the Government is content to act in the interests of developers and wealthy investors and, on the other hand, ignore families who need the support of the State the most. The families who really need to hear that they will not have to choose between food and heat this winter will be feeling bitterly disappointed with this budget.
Nessa Cosgrove (Labour)
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This is my first year as an elected representative in the Houses of the Oireachtas and it is my first time hearing the budget. All that kept going through my head when I was sitting in the Dáil listening to the budget was the song “Here we go again". This budget is yet another in a long list of missed opportunities by the Government and its predecessors of recent years. We are over a decade into an unprecedented spell of uninterrupted growth, yet we have chronic deficits in infrastructure, transport, health, education and energy. As I have said before in the House, we are a very rich country but for too many people, it feels very poor. Where are the protections today for the vulnerable? Where are the protections for low- to middle-income earners in this budget? We have the second highest energy costs in Europe, skyrocketing food prices and a housing crisis that continues to spiral, with 5,000 children living in homelessness, but homelessness was never mentioned once today in the addresses by both Ministers. Where was the commitment to eradicate child poverty? One in five children in Ireland is living in poverty.
Our public services need urgent investment. We have shown, as a party, how we would pay for them by raising revenue and restoring the bank levy to €500 million, but we are not listened to. This is another issue that we have raised today: we on the Opposition benches are not listened to.The Government has chosen to give a sweeping tax break to McDonald's and Supermacs rather than to ordinary people to support their needs. I am delighted that other parties have picked up on this. The VAT cut being given to companies such as McDonald's and Supermacs would have been able to fund a second tier of child benefit.
Families are getting no energy supports in the budget. They will see limited improvements in their childcare fees and will pay €500 more in college fees, which the Government has had the cheek to paint as a cut. The budget will really hurt those who depend on the State for their income. There is an extra €10 a week. We know our social welfare payments are targeted and an extra €10 a week will do nothing to help those families make ends meet while the prices of basic things are spiralling completely out of control. The Society of St. Vincent de Paul has said €16 needs to be added to every core weekly payment. Our party agrees with this and we have it in our alternative budget. Once again, it was not listened to. Rather than this, we have tax breaks for food barons and developers. This money could have been used to target a child support payment to the poorest of families.
Where are the promises that were made to carers coming up to the election? Carers save the State €20 billion a year. The Fianna Fáil and Fine Gael manifestoes made a commitment to get rid of this but there is only piecemeal progress. Why not get rid of it? The Disability Federation of Ireland has already come out today and called the budget a betrayal of disabled people. Where is the cost of disability payment that was spoken about?
We can see that energy credits papered over the cracks in the previous budget but this year they could have been targeted. We have the highest energy costs in Europe but the profiteering from the energy companies is going completely unaddressed. The Labour Party proposed extending the fuel allowance to all those on the working family payment and extending the payment period from 28 weeks to 32 weeks. We would do this by putting a 20% windfall tax on the profits of the energy companies.
As I said, one in five children are living in poverty, and we could have seen a second tier of targeted child benefit in the budget. Why is the derelict property tax being delayed until 2028? We need apartments, and we all agree with this, but why will there be a VAT cut for developers with no link to affordability? The budget harks back to the days of the Galway tent. It is disappointing and it does not do anything. It definitely favours property developers and big businesses. It could have addressed structural inequalities. People will spend another year in the cold, worried and stressed about how they will pay their energy and food bills and, if they have somewhere, their rent.
Joe Flaherty (Fianna Fail)
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I welcome the Minister of State, my constituency colleague, Deputy Troy. I commend him on his very positive input into what is a progressive budget. We have spoken on many of the macro points in the budget but all politics is local and I want to look at it on a more micro level and highlight some of the issues as they continue to pertain to Longford. We would have preferred to see some indication on the continuation of the N4 project, in keeping with the ambitious €19 billion capital investment. However, I welcome the announcement by the Minister that detailed specific projects to be delivered in 2026 will be announced shortly, with the sectoral investment plans for the next five years to be published by the various Departments. It is important that this features the N4 and that we see an escalation of the funding process.
I am pleased the Minister has confirmed the infrastructure task force will report next month and publish a detailed action plan to tackle barriers to developing critical infrastructure. Beyond the N4, which I have mentioned, it is also critical that we seek positive and definitive timelines for the delivery of water treatment plants for the towns of Granard and Edgeworthstown.
I welcome the additional funding for IDA Ireland, which is at the front line of delivering critical FDI investment and jobs to the country. It is critical that it follows through on plans for an advance factory in Longford town. We have had notable successes with FDI employers in Longford through Abbott, Avery Dennison and Technimark. Another FDI firm, with more than 200 jobs to start with, is critical for the future growth and development of Longford town.
The stand-out disappointment for the people of Longford is the failure to see a commitment for additional funding for family resource centres, FRCs, in budget 2026. I fought tooth and nail in the lifetime of the previous Dáil to get funding for additional FRCs in the previous budget. I commend the former Minister, Deputy O'Gorman, who followed through on the commitment and delivered the funding. A total of 49 local areas applied for funding. Tusla whittled it down to a shortlist of 15 and the Minister was able to approve funding for five of them. Unfortunately, they did not include Longford. As a follow-on to this I have spoken to the Minister, Deputy Foley, who is committed to visiting Longford in the coming weeks. I will impress upon her the savage inequality and socioeconomic challenges we face in Longford, and the critical need for an FRC in Longford town. I will ask her to look at a mechanism to allow the Longford committee to reapply and, hopefully, be included in the next tranche of funding.
It has been a positive budget for sport, certainly for the GAA. It is great to see the Government follow through on a commitment to support FAI grassroots soccer. I am also delighted to see a commitment for a further round of the community sports facility fund, which we used to know as the sports capital grant. It has been a huge win for regional Ireland and it is great to see it. I hope it will follow through in 2026. Significant also is an additional increase of €18 million for the large scale sports infrastructure fund. This is timely for Longford GAA, which is planning a major development at the Pearse Park grounds. I attended the Glennon Brothers fundraiser in Croke Park last Friday. They, as the team sponsors, and the new chair of the county board, Derek Fahy, are very enthused about the project. This funding is coming at a critical time for them.
Another source of worry is the absence of a commitment on the further delivery of primary healthcare centres. The budget acknowledged the recent delivery and roll-out of 180 new primary care centres but it is notable I did not see any commitment for additional centres. This is a source of concern for Edgeworthstown, Granard and Longford town, where plans were advancing for these centres. I would welcome some clarity on this. There is no mention of a minor injury unit for Longford, or for any location nationally. It reminds me of 2018 when the then Minister, Deputy Simon Harris, rolled into Longford and said it would be the centre for a brain injury unit which would quickly follow. However, subsequently the HSE told us it never featured in its plans.
I have one more point to make relating to our constituency colleague, the Minister, Deputy Burke. Recently he spoke at length about artificial intelligence and committed to delivering an artificial intelligence national office. It is good to see €1.4 million in funding for this. It will be a focal point for the promotion and adoption of transparent and safe AI in Ireland. Longford County Council has long been vying to develop the Providers building in Longford town. It would be a stand-out building for such a facility and I hope the Minister, as it is in his grasp and ability to deliver, will engage with Longford County Council and look to develop and deliver this project for Longford.
Gareth Scahill (Fine Gael)
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I thank the Minister of State for coming to the House to give us the opportunity to make statements on the budget. I compliment him and his Cabinet colleagues on the delivery of the budget. To remind people, budget 2026 is worth €9.4 billion, €8.1 billion of which is spending and €1.3 billion is tax. It represents increased spending of 7%. Through budget 2026 we will provide as much certainty as possible in a turbulent world.
This is a Government that has based itself on fiscal responsibility. We have steered the economy through successive crises, restoring the economy after the property crash, securing a good Brexit deal, protecting the economy during Covid and supporting people through the cost-of-living crisis.
I welcome that we are helping with the cost of living with the inclusion of a €2 billion package of social protection measures. I welcome the €10 increase for pensioners, carers, people with disabilities and illness payments. It is very welcome to see the carer's allowance means test disregard has been increased substantially. This is an issue that everybody who participated in the general election met at the doors. The threshold for single people has gone from €375 to €1,000. For couples it has gone from €750 to €2,000. This is very welcome and looks after this particular area.Working family payment thresholds have increased by €60. Anyone in receipt of the working family payment will also receive the fuel allowance, which has increased by €5 to €38 per week. All of those measures are welcome.
On housing, I particularly welcome the additional €130 million in grants for older people for house adaptions. I also welcome €140 million in retrofitting for social homes. I will raise an issue in that regard when I move to further education.
The additional €33 million funding to complete the national broadband plan is welcome. Over 400,000 homes, farms and businesses can now connect to high-speed broadband through the national broadband plan.
In respect of building stronger, safer communities, I welcome the €77 million for recruiting 1,000 additional gardaí and 200 civilian Garda staff. I hope that counties such as Roscommon and Longford, to which Senator Flaherty referred a moment ago, can avail of some additional gardaí through that particular measure. I also welcome the €39 million for the phased recruitment of 150 prison staff. I would also like to see increased staff numbers in Castlerea Prison as a result of that particular measure.
On education, I welcome the additional funding for medical and nursing training places. An additional 1,100 places will be delivered, which is an increase of 25%. I note that the Minister for Further and Higher Education, Research, Innovation and Science, Deputy Lawless, has included an additional €65 million to enable a further 1,250 apprenticeship registrations. I have raised the matter of an apprenticeship centre for Roscommon since I came into this House. It has been in the ether since 2018 or 2019. With the additional funding for retrofitting homes and older person retrofits, we need more people. What is holding back delivery in that sector at the moment is the lack of tradespeople on the ground. I would welcome the opportunity to engage on that issue.
We in this Chamber have spoken on numerous occasions about, and have fought for, a decrease in the hospitality VAT rate. I welcome its reduction to 9%, which will protect 191,000 jobs in small businesses across the country from 1 July 2026. We must welcome measures such as that.
In response to something that was said from across the Chamber, this budget also represents an increase in the total spend for disability services by €680 million to €3.8 billion, which is an increase of 20%. This will fund disability services for an additional 90,000 people.
Another measure that came up numerous times in recent months has not been mentioned yet. All Senators will have received in recent days a newsletter from the Irish Postmasters Union stating that budget 2026 will decide the future of Ireland's post office network. I am sure all Senators will stand up after me and compliment the €15 million in additional funding to support the post office network. I commend the Minister for Culture, Communications and Sport, Deputy O'Donovan, on putting that in place.
Maria McCormack (Sinn Fein)
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I welcome the Aire Stáit. We are hearing more and more people every day talk about the cost of living. Someone said to me recently that it should be called the cost-of-everything crisis because the price of everything is going up. Workers and families who find themselves constantly struggling from week to week needed to hear that this budget would make things more affordable. They needed to hear that rent and groceries would be made more affordable. They needed to hear that electricity and gas bills, childcare, car insurance and education would be made more affordable. Today they will hear some positive messages, such as the increases to the minimum wage and social welfare payments, which are welcome. However, by the end of the week, or even by the end of the day, most people will realise that this budget has done little to nothing to help them to afford their bills, shopping and day-to-day expenses. This is where the real failure is.
I will focus on housing first. Under successive Fianna Fáil and Fine Gael Governments, housing targets have been set too low and most targets, low as they were, have not been met. The Government's failure to adopt key recommendations of the Housing Commission report, or indeed recommendations from my own party, means that the Government will not meet its own targets for public or private housing next year. The tax measures announced for housing, as we have seen from previous budgets, do not necessarily translate into providing additional housing. There are currently 16,353 people in homelessness, including 5,145 children. Another record high was set last month. It is desperately sad that the Government's budget speeches in the Dáil made no mention of those individuals or their families who are living in homeless accommodation today.
In County Laois, our biggest problem is affordable housing. I do not necessarily mean the Government's version of so-called affordable housing because a lot of those units, what few have been built in Laois, are still not affordable for many ordinary workers, and especially for younger people and families. Laois is not getting any investment in affordable housing from the LDA. An increase in affordable housing units is desperately needed. Housing is the single biggest issue for the Irish public. It can and must be fixed. That there was no mention of homelessness today is shameful. That can only be fixed if the Government changes its mindset and prioritises ordinary workers over landlords and investors.
Young people will not be happy with today's budget. Most young people cannot even afford to rent a property. They now rely heavily on the room-to-rent scheme. I am talking not just of students but also young workers who are now in room-to-rent situations. The constant rise in prices is pushing up the rent, too. However, they do not qualify for the renter's tax credit and have little to no protections. A €500 reduction in student fees will not feel like a reduction because fees are €500 higher than they were last year. What do the young people of today have to do to get this Government to listen to them? Sadly, I do not think that any young person planning to leave Ireland and work or live abroad will feel that anything has changed after today's budget. I do not think the Government has done anything to convince those people to stay. We will continue to lose this generation of young workers to the likes of Sydney and Toronto.
Linda Nelson Murray (Fine Gael)
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I thank the Minister of State for coming to the Chamber to discuss the budget. This is my first budget since being elected and it is great to be here. I would like to discuss a couple of parts of the budget that I welcome. I do not need to repeat much of what has already been spoken about.
Since the onset of the pandemic, we have added more than 440,000 jobs to the economy. That is just since the onset of the Covid-19 pandemic. We have record levels of women at work, as well as many people coming to Ireland to work. It is expected that a further 63,500 jobs will be created by the end of next year with the economy remaining at full employment over the coming period. I am hoping that the announcements today will protect those jobs as outlined as businesses are under so much pressure, as the Minister of State knows. Small businesses, as I have said repeatedly, welcome their employees being looked after with higher wages but need support to provide them.
We see today that the VAT rate for hospitality will decrease from 13.5% to 9%. There are some 191,000 jobs in the sector. To my colleague on my left, I say that McDonald's and Supermacs employ many people in Ireland. Supermacs employs 4,000 people. Pat McDonagh has been to the forefront of constantly working for businesses, especially when it comes to insurance reform, thus protecting jobs. I will also mention, in response to claims that we are only helping big chains to do even better, that those chains represent only 0.4% of businesses in the hospitality trade.
I particularly welcome the reduction in VAT in the hairdressing sector and even more so in a sector very close to my heart, namely, the leisure sector, which includes play centres, bowling alleys and indoor activity centres. These businesses were the very last to reopen after the pandemic. They were not included in the increased cost of doing business grants. They have faced increases in the costs of energy, wages, rates, rent and insurance. These businesses employ many of our students and younger workers. For this sector, I am particularly happy that those centres which supply food to the customers and to all the parties that walk through the door will now be able to avail of this hospitality grant. I also welcome that the VAT rates for gas and electricity will remain at 9% until December 2030.
I acknowledge that the increase in the SUSI grant threshold, which I have been asking for regularly in Seanad, was delivered by the Minister, Deputy Lawless.Bringing that up to €120,000 from €115,000 is very welcome. It is a reduction in fees of €500, which I welcome. Is it better to have the reduction in fees of €500 or to face the fees going back up to €3,000? I welcome the reduction of €500.
The additional €65 million enabling a further 12,500 apprenticeship registrations is vital. Not everybody wants to go to college, and many like to learn and earn. Funding for medicine and nursing will deliver 11,000 more places, an increase of 25%.
Finally, I encourage Deputy Troy, as Minister of State with responsibility for insurance, to ensure that the reduction in the insurance compensation fund levy from 2% to 1% will be passed on, as the Central Bank has recommended. I encourage him to ask insurance companies to pass that on to homeowners and motorists.
Laura Harmon (Labour)
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Cuirim fáilte roimh an Aire Stáit. It is safe to say this budget is giving "friends in high places" vibes. What I mean by that is that it is a budget for developers and in many ways for big businesses, for the likes of Starbucks and McDonald's. Instead of asking, "Do you want fries with that?", this budget in many ways asks, "Do you want elitism with that?" This budget represents a reward for many of the Government's supporters or friends in high places, just as last year's budget represented the buying of votes and many once-off measures.
The €500 increase in student fees is an increase. You cannot dress it up any other way. To say it is a decrease is effectively to gaslight students and their families. Does the Government think people are fools in saying it is a decrease? It is €500 extra coming out of people's pockets this year that was not there last year. In this Chamber, before the summer recess, I counted seven Fine Gael Senators in a row who said they were against any increase in the student contribution fee, so to hear Senators from Fine Gael today say they welcome this is questionable. It is really important that the Government stick to its own programme for Government and the promises that were made to the electorate when it said it would decrease the student contribution fee over the lifetime of this Government. We need to see further decreases to that fee. It is important to say we have among the highest third level fees in Europe. Students already pay significantly for their education in this country.
It was a missed opportunity not to completely abolish apprenticeship fees in terms of access to apprenticeships. It is welcome that there are more apprenticeship places as part of the budget. That is a welcome measure.
It is disappointing to see there is not more emphasis put on childcare. We know that this was a huge issue during the election campaign in terms of the promises that were made. We absolutely need to move towards a public model of childcare. The 2,300 places that were announced today will be merely a drop in the ocean for families and children waiting for places. We are a long way away from free GP care for all children as well. Again, that needs more emphasis.
In terms of dereliction, it is extremely worrying to see that the legislation for the introduction of the derelict property levy is not expected until 2027. It is welcome that it will be collected by Revenue, and that is something the Labour Party has called for, but the fact that we might not see any of this even collected until 2028 is appalling. We have to get serious about clamping down on derelict properties. Where is the sense of urgency?
It is welcome that the renter's relief tax credit is being continued to 2028. We in the Labour Party, however, would have liked to see a significant increase in that to reflect the cost of living. It is absolutely shameful that there was no mention in today's budget of homeless people living in this country and that the word "homeless" was not uttered by any Government Minister in the Dáil today when we were watching the debate. We have over 15,000 people who are homeless, of whom over 5,000 are children. Are they invisible to this Government? Is that what it is? Can it not see them? Can it not see what is happening in this country, how this will affect these children throughout their lives and how that poverty will follow them around? One in five children is living in poverty in this country. Where is the budget for them?
In terms of disability, disability organisations have come out being critical of the budget, saying it is a missed opportunity and will deepen poverty for these people. The Irish Wheelchair Association has said many are choosing whether they can eat or whether they can turn the heating on. This is completely unacceptable. The Labour Party would have emphasised a cost-of-disability payment. It is disappointing that that has not been prioritised in the budget.
Finally, if this is the kind of budget being delivered when ours is one of the wealthiest countries in the world and at a time when there is money in this country, I worry what the budget would be like if that were not the case.
Seán Kyne (Fine Gael)
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The Minister of State is very welcome to the Chamber. Over recent years, particularly since 2011, on and off, we have had debates about VAT. The VAT change for our hospitality sector that took place back in the dark days of 2011 was used as a stimulus for that sector. When the then Government tried to find measures to stimulate the economy and to boost job creation, it looked to that to boost jobs, and it worked. I certainly do not see it as being elitist to protect jobs in every town, village and region of our country. Over 99% of the businesses that will benefit from the reduction in the VAT rate are small businesses. That is important. It also supports about 190,000 jobs. The increase in the minimum wage is, of course, an added cost to businesses. You cannot have businesses without employees and you cannot have employees without businesses. It is important to reflect that as well, so I welcome that initiative.
Research and development is so important for continued investment in this country. We know that the IDA and Enterprise Ireland do tremendous work in selling Ireland, supporting businesses and start-ups and growing jobs. We have all been to jobs announcements across our country, thankfully. They are so important for those communities and as a driver of the tax take to the country. Research and development is hugely important. It is a key driver of economic growth and high-value employment. I welcome the initiatives taken by the Minister and the Government today in relation to the rate of credit increasing from 30% to 35% and increasing the first-year payment thresholds from €75,000 to €85,500 to support smaller research and development projects.
Some other changes have taken place. I welcome the changes to the USC such that those who benefit from the increase in the minimum wage will not be caught in relation to the USC. I also welcome the renter's tax credit being extended for a further three years, to 31 December 2028. Again, that is hugely important, as is the mortgage interest tax relief being extended for a further two years.
As regards gas and electricity, again, we have reduced the VAT rate. That was due to expire on 1 November of this year. It has now been extended to 2030. That is a benefit. Sometimes, when a change is made one year, people forget that that continues. The extension is a real cut for our consumers up and down the country.
I welcome as well the VAT cut for new apartments. This is about stimulating construction. It is not about rewarding anybody. It is about looking at those apartments where planning permission has been granted and how to encourage those developers to build the apartments we need up and down the country, whether for private sale or for rent. We need more homes and we need to increase the supply of homes. This is an initiative not to reward anyone or any sector but to try to encourage building of apartments, which is high cost. I welcome that. In relation to the living city initiative, I welcome the changes made. Five towns around the country have been included. The initiative previously applied only to properties built pre-1915. That has now changed to properties built pre-1975. That will increase hugely the scope of eligible properties to benefit. That is an important initiative. The scheme has been extended to the end of December 2030, which will ensure greater flexibility is afforded to those claiming the relief.
It is to be hoped the derelict property tax, also being collected by Revenue Commissioners, will act as an incentive, or a stick, as it were, to force development of derelict properties. We see them up and down the country and there have been initiatives like the croí cónaithe scheme. This is the carrot, but we need to ensure the stick is also used. With that, I commend the initiative on the part of the Department of Finance.
Paraic Brady (Fine Gael)
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The Minister of State is very welcome. I welcome the capital budget for agriculture. The Minister, Deputy Heydon, has secured an additional €170 million in budget 2026. That is a 9% increase, from €158 million last year to €170 million this year, bringing the Department's budget to over €2.3 billion. This includes a capital programme of €335 million. The Minister, Deputy Heydon, got what he has worked for after listening to local representatives and people from the farming sector. This is one budget of five in which he intends to deliver support to key areas. The greatest priority, of course, had to be TB. We have seen how this has risen in the sector over the past number of years and affected the livestock industry. I am glad to see that the TB programme has gone from €85 million last year to €157 million in this year's budget. That is a sizeable increase in the budget and it shows that the Minister and his Department officials have listened to the people on the ground. This is a sector we have to address and it will be addressed with that allocation.
On improving water quality, the Minister has secured an extension to the acceleration capital allowance programme for the next four years, which is hugely welcome. He is also allocating €88 million to the TAMS capital investment scheme for 2026. I welcome that. He has secured €280 million for ACRES for 2026, an increase of €20 million on 2025. We have asked the farming community to buy into ACRES and environmental schemes. We have seen the havoc the scheme caused last year and I would welcome an increase in that this year. It was oversubscribed last year, and I welcome that the Minister has allocated more money to the scheme this year, where we need to meet our targets.
The challenging sector for the Minister this year was, of course, tillage. He has secured at least €50 million for the tillage sector in 2026. He will consult the stakeholders in the programme and design a strategy for this operation. Importantly, the Minister has secured the same allocation as last year for the livestock scheme, to the sum of €131 million. I welcome that we will not touch the livestock or sheep sectors going forward. I thank the Minister of State for his time.
Maria Byrne (Fine Gael)
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As there are no other Senators indicating, I now call the Aire Stáit.
Robert Troy (Longford-Westmeath, Fianna Fail)
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I thank all the Senators for their input into today's debate on budget 2026. I have taken note of their contributions and hope to address the key themes they have raised.
Before I respond to individual comments, I refer to some analysis in the Beyond GDP Quality of Life Assessment publication, which was published by the Department of Finance today. I will touch briefly on four components; the positive performance of Ireland and well-being metrics by international standards; progress on equality budgeting, with significant improvements in the gender equality index in Ireland relative to the EU; the progressivity of the tax and social security systems; and the progressive impact of the budget package, with lower income households experiencing the highest gains.
Ireland's well-being framework was launched in July 2021 and seeks to take a more holistic view that goes beyond traditional economic performance metrics to incorporate social and environmental considerations. The framework is based around 11 dimensions, which constitute different aspects of well-being. Across these 11 dimensions are 35 well-being indicators that give a high-level overview of how the country is performing. The report highlights that progress across the 35 indicators and 11 dimensions are generally positive, both over time and in comparison with other countries. In particular, Ireland continues to make progress in the income and wealth connections of community and participation dimensions. However, we know that the persistence of inequality in society undermines our collective well-being. This Government is committed to improving outcomes across Ireland as well as ensuring that equality and well-being concerns are integrated into the design and implementation of Government policies.
From a gender perspective, analysis and beyond, the GDP report shows that Ireland performs strongly relative to the EU on the gender equality index from the European Institute for Gender Equality. The index scores the EU and each country from one to 100, with a score of 100 indicating full equality between women and men. Focusing on the latest data, Ireland’s score reached 73.4, rising by eight points between 2010 and 2022. Over the period, Ireland’s scores are consistently higher than the EU average. While progress has been made in this index, the Government remains committed to further improving the gender disparities that remain in earnings and employment levels. In addition, the analysis highlights that some groups experience equality across a high proportion of indicators. This Government is committed to providing support to the most vulnerable in society.
The analysis from the Beyond GDP publication also shows that Ireland has one of the most progressive tax and social security systems of any EU or OECD country, with these payments playing a key role in the redistribution of income and the reduction of poverty and income inequality. While social transfers overall make a larger contribution to reducing income inequality, the income tax system has also become more progressive over time, ranking as one of the most progressive in the OECD.
The report illustrates the progressiveness of budget 2026. Households will experience an average gain in weekly disposable equivalised income of 1.1% from the measures that we have announced. The measures are also set to benefit the lowest income households in Ireland the most, ensuring that our policies continue to move us towards a more equal society.
I will address some of the points that were raised in this evening's discussion. The first point I will make is this is the first budget of five. A number of Senators who today said we are failing in our commitments in the programme for Government are asking us to implement a programme for Government in the first year of a five-year Government cycle. This budget is fair, prudent, progressive and has a number of targeted measures to help address the budget surplus we are investing.
On housing, something addressed by many speakers, and rightly so, there has been a 20% increase in this budget's allocation to housing. That is €7 billion - €5 billion in capital and €2 billion in current expenditure. That will deliver 10,200 new social homes and 15,000 new, affordable cost-rental homes. People talk about homelessness, and the best way to help people out of homelessness is to provide additional social homes. We are providing the capital in this budget to provide additional social homes. We are also providing an additional €211 million in current expenditure to help people transition out of homelessness.
In relation to tackling child poverty, we are increasing unemployment payments relating to children under 12 by €8 per week and children over 12 by €16 per week. That is going to benefit the parents or guardians of 330,000 children.We are extending the back-to-school allowance to two- and three-year-olds. With regard to disabilities, we are providing 1,717 additional SNAs and 860 additional special education teachers. We are providing additional respite beds for both day and night respite. There are to be additional places for adults with disabilities who are over 18 and have nowhere to go when they finish their education.
On childcare, there is an additional €64 million under the national childcare scheme and an additional €52 million under the core funding scheme. I realise we have not delivered on the full commitment on what we can do in childcare, but it was never practical or possible, nor would it ever be, regardless of who is in government, to deliver in one year what we set out to achieve in five years under a programme for Government. It is not practical and suggesting so is not fair, and people should acknowledge that here today.
Senator Craughwell raised defence spending. The real current expenditure increase when inflation, which is projected to be 2% next year, is taken out is going to be 3%. The increase in capital expenditure on defence, which the Senator failed to reference, will be 40%.
A lot has been achieved in this budget. We are taking account of the fact that we are in uncertain times internationally. As a small, open economy, we are dependent on our ability to trade internationally. A really positive intervention in this regard, referred to by one of the Senators, is the expansion of the research and development credit to ensure multinationals continue to invest in this country and that we continue to support the jobs they create here and attract new jobs into this country. The most important thing is to protect jobs. If we do not have the ability to protect our jobs now, we will not have the ability to continue, over the remaining four years of our five-year term, to make the investments in our core services that we have begun to make in the first year.
I thank the Senators for making their contributions and for the opportunity to respond.