Main points
- The budget package will bring public spending to €125.6 billion next year
- Ifac has strongly criticised the budget, warning it puts the public finances on “a worse trajectory”
- Budget struck a ‘balance’, McEntee says in response to Ifac criticism
- Taoiseach Micheál Martin defended the budget, saying: “We’re trying to protect people as best we can in the midst of an international crisis“
Key reads
- Budget 2027 main points
- Opinion: It takes a giveaway budget of €8.5bn to not annoy anyone – except Patrick O’Donovan
- Budget calculator: How this year’s measures will affect your income
- Budget Q&A: Submit your questions to our expert panel on budget day
- Ireland’s new personal investment accounts: Here’s how the scheme will work
Resilience of Ireland’s economy an ‘astonishing accomplishment’, Tánaiste tells Dáil
The remarkable resilience of Ireland’s economy is an “astonishing accomplishment” given “where we have been in last two decades”, Tánaiste Simon Harris has told the Dáil.
Marie O’Halloran reports:
In his Budget 2027 speech he said from the financial crisis, Brexit, the pandemic and the wars in Ukraine and the Middle East “we have rebuilt our economy and restored our public finances”.
Forecasting an additional 53,000 jobs next year, he said “countries do not find themselves in such a strong position by accident.”
“It is because, over successive Governments and across many years, we have got the big decisions right,” he said.
This year a surplus of €6.7 billion is expected, rising to €9.5 billion next year.
The Minister for Finance said “if we had listened to those who urged us to always spend more and tax less, we would not have had the resources” to respond to challenges and “protect our people and our economy”.
He insisted it “is precisely because we managed our public finances responsibly that we have been able to react with flexibility and speed to the latest shock” of the war in the Middle East.
He said over this and future budgets he wanted to change things to support people “in the middle” who “sometimes feel as if they are asked to shoulder too much of the burden”.
Harris added: “I have made clear that this Budget must reward work and support the people who keep our economy running,” and that was why he had announced an income tax package of €1.3 billion.
Budget ‘rewards work and effort’, Taoiseach tells Dáil
In the Dáil, Taoiseach Micheál Martin has said the “positive state” of public finances led to the transfer an additional €1 billion to the Future Ireland Fund, Parliamentary Correspondent Marie O’Halloran reports.
Martin said the additional €1 billion brings the total contributions to the long-term State saving fund to some €6.8 billion next year, on top of the €23 billion that has already been transferred.
“This shows this Government’s commitment to reinforcing our economic resilience,” he said.
The Taoiseach also insisted the Government is not backtracking “on our commitment to decarbonising our society”.
He said to build a greener and more sustainable economy “this transition has to be managed in a fair and balanced way”.
The Government had invested €1.5 billion into ESB “to boost capacity and our renewable energy infrastructure”.
“And it is why we will transfer €2 billion to EirGrid over the coming years to invest in the resilience of our energy grid," he said.
The energy transition is a “long-term project, but we can take action today to accelerate it”, he said.
Martin said the budget “is about helping with the here and now, while planning for the road ahead”.
He said it was a budget that supports households and businesses to reduce exposure to future energy shocks.
The budget is one “that rewards work and effort and lets people keep a bit more of their own money,” that is “being delivered at a deeply uncertain time” though the State is “well placed to face the challenges ahead”.
“Our public finances are in good shape. We are one of the few countries in Europe running surpluses,” he said.
This budget sets out “an ambitious, optimistic, but realistic path forward, built around rewarding hard work, risk taking and innovation”.
RTÉ could receive reduced funding after concerns over pace of reform
RTÉ could be left with a substantial shortfall in State funding next year with a reduced allocation from Patrick O’Donovan’s Department of Culture, Communications and Sport, Political Editor Pat Leahy reports.
Under a funding settlement agreed by the Minister in the previous government, Catherine Martin, RTÉ was due to receive €260 million from the exchequer next year.
However, although the figure is not broken out in the budget documentation published yesterday, it is understood that the figure allocated to RTÉ will be €240 million.
RTÉ funding was to be contingent on the reduction of employee numbers at the station and other reforms.
However, O’Donovan has previously raised questions about the pace of reform.
The issue is expected to be raised at the Minister’s post-budget press conference this afternoon, at which he is also likely to be asked about the €100 “culture card”, flagged before the budget but conspicuously missing yesterday.
RTÉ said it would issue a statement after it heard from O’Donovan this afternoon.
Consequences of Middle East war to ‘reverberate for some time’ - Taoiseach
Taoiseach Micheál Martin has started off a Budget 2027 debate of more than seven hours in the Dáil today, Marie O’Halloran reports.
Opening his 30-minute address to a virtually empty chamber he reiterated his pledge that “there will be no increase in any form of tax at the pump or in your home, during this winter”.
He said after seven months of conflict in the Middle East, “even if the conflict were to end tomorrow, the consequences for energy markets would reverberate for some time to come”.
That was the reason they will extend the reduction in excise duties on fuel until end-February, “followed by a gradual restoration to pre-conflict levels”.
He said it was a “substantial commitment” from Government but because of “strong fiscal buffers it is a cost we can absorb”.
“Restoring rates in a gradual and phased manner means families will not face a sudden ‘cliff-edge’ in costs during the winter months, and that businesses can plan appropriately.”
‘A Kit Kat budget from a TikTok Tánaiste’ - Bacik
Labour leader Ivana Bacik has described Budget 2027 as “pathetic” and “underwhelming”, saying the money the Government stressed “will go back into people’s pockets, could barely buy a chocolate bar a week”, Marie O’Halloran reports.
It was a “sort of Kit Kat budget from a TikTok Tánaiste”, Bacik said in the Dáil.
“In seeking to please everybody, you’ve ended up pleasing nobody,” she said.
“This underwhelming budget has failed so many - the PAYE workers you forgot last year, the public sector workers still left without any pay deal, the commuters facing a 15 per cent increase in public transport fares, renters facing eviction into homelessness”.
The Dublin Bay South TD cited a worker, Martina, who asked how the Government could think €4 a week would help her, “a worker who earns €33,500 per annum, who gets up to work?”.
“For people like Martina, you haven’t made it any cheaper to heat her home or any cheaper to commute to work or to school.
“You’ve put a pittance on the budget for SEAI retrofits and taken only €43 off the €1,500 cost of a home heating oil refill.
“The freezing of funding for active travel means that, in real terms, you’ve slashed budgets for walking and cycling measures,” she said.
Bacik questioned the “more than €200 million on capital gains tax cuts for the wealthiest when hundreds of thousands are in arrears on energy bills”, and asked why no windfall tax was imposed on energy corporations and data centres.
She argued they were “enriching themselves with the misery of people who can’t heat their homes” while no targeted energy credits were given to struggling households.
Taoiseach Micheál Martin disagreed “fundamentally” with her analysis, saying the budget was “quite substantial”.
Martin said they had provided €1.2 billion for public sector pay, more than 10,000 social homes would be built and they were budgeting for 11,000.
He said there was a “sea change” in building social housing, along with affordable housing.
Some €20 billion this year will be spent on infrastructure, he added.
He highlighted the cost-of-disability payment and childcare measures, saying they were “now in a clear pathway to getting down to €200 a month” for parents.
Taoiseach accused of breaking manifesto promise on pension increase
Social Democrats deputy leader Cian O’Callaghan has accused Taoiseach Micheál Martin of breaking a budget promise to give pensioners a €12 increase, Parliamentary Correspondent Marie O’Halloran reports.
Speaking in the Dáil during Leaders’ Questions, he said Martin had pledged the €12 annual increase in his party’s manifesto.
He also criticised as too low the additional €3 for the living alone allowance, a payment he said had not increased for five years.
The Dublin Bay North TD raised the case of a pensioner whose income had halved since his wife died and who described the €3 increase to the living alone allowance as a “joke”.
O’Callaghan said €3 “wouldn’t even buy you a cup of tea in a cafe”.
He noted that another pensioner “goes to bed at 8.30pm to stay warm”.
“It’s a shameful indictment of this Government.”
He said there was a time when Fianna Fáil had time for older people, but “those days are gone because pensioners have been bitterly betrayed”.
O’Callaghan said pensioners should have been given the €15 increase his party recommended.
The Taoiseach insisted Fianna Fáil “does have the back of pensioners and always had”.
He insisted the Coalition’s commitment to increase the pension to €350 by the end of the Government’s term would be fulfilled and said the €10 pension increase was above the rate of inflation.
“This is the second of five budgets that we will deliver,” he said.
The social protection budget had increased by €2 billion with a total budget of more than €31 billion “and the bulk is on pensions and disability”, he said.
Martin said they were extending the “keeping” of a deceased person’s pension from six to 10 weeks to help the bereaved partner and they were looking at an additional 10,000 single people potentially becoming beneficiaries of the fuel allowance.
He claimed the Social Democrats’ attitude “is spend, spend, spend”.
Tánaiste defends vape fluid tax hike, saying they are ‘revenge of the tobacco industry’
Barry phones in and criticises the Government’s decision to increase the excise duty on vape fluid.
Noting it is the second increase, he says the price has more than doubled.
“Why are you disincentivising adults from giving up smoking?” he asks.
Harris says he believes vapes are the “revenge of the tobacco industry”.
“I’m really worried that we’re going to look back in a period of time and wonder did we do enough to make sure the next generation don’t find themselves hooked on vaping just like my parents’ generation found themselves hooked on cigarettes,” he says.
The Tánaiste says the HSE “absolutely does not recommend vapes” for those who wish to stop smoking, and instead recommends nicotine patches, gum, lozenges and patches.
He consulted the Department of Health on the issue, he says, adding there is a public health concern around vapes.
He says the Government “has to raise revenue”, noting that a packet of cigarettes has also been increased by €1.
“We’re particularly concerned about vape usage for our young people,” he says.
In response, Barry seeks to quote from a medical journal publication on the topic, but is cut off as there is not enough time.
Another caller, Megan, says the €550 monthly childcare fee cap is welcome, but it will not come into effect until September 2027 and will only apply to providers in the National Childcare Scheme.
She and her wife have a son aged just over six months, and they have been unable to get a place in such a creche as he is not eligible yet due to his age. Providers are also “heavily oversubscribed”, she says.
She estimates they will be paying €1,450 per month for a childminder once they are both back at work full time.
She asks what the Government will do for families in her situation.
Harris says the increase to the childminder benefit was an effort to make it more attractive to be a childminder. Under the change, childminders will be able to earn €20,000 before paying tax.
The cap on the number of children someone can mind has also been removed. “The aim of this is to improve supply,” he says.
Chambers adds that work was ongoing on wider reforms around “making sure those outside of the National Childcare Scheme are included within it”.
‘A joke’: Pensioner criticises €3 increase to living alone allowance
Tánaiste and Minister for Finance Simon Harris and Minister for Public Expenditure Jack Chambers have been taking live questions on RTÉ Radio’s Today with David McCullagh from those affected by the budget.
One 80-year-old caller, Noel, is critical of successive governments, saying he and his wife “worked all our lives, paid our taxes”.
Eight years ago, his wife died, he says, adding: “Our government’s reaction was to half my household income,” going down to €243 at the time.
“You could survive on that for a week or two but for it to be a permanent, it’s not just cruel, it’s just not fair.”
Told by McCullagh of the increase of €3 to the living alone allowance, Noel responds: “Please don’t go there.”
“That in itself is a joke. If my lovely wife had survived, she would be receiving €330 a week so the Government are saving that.”
He adds he would love to “meet the genius” behind the €3 increase.
Chambers acknowledges many like Noel are under “significant pressure”.
“Over a two or three year period, we didn’t see an increase in the living alone allowance and we have increased it at a similar level to what we increased it three or four years ago,” he says, adding that it represents a 14 per cent increase.
“I accept, if you look at it in isolation in a single week, it obviously isn’t what many people would expect,” he says, adding however that the full year value will be €1,300 in 2027.
It will also coincide with increases in core welfare rates, including the pension, alongside an increase to the fuel allowance.
Noel tells Chambers not to mention the increase in the fuel allowance, saying it is not an increase.
Noting that the term has effectively been reduced after an extension last year, Noel says the Government “actually reduced the fuel allowance by €32”.
Chambers says that was an “exceptional” extension, adding that the €5 increase is permanent.
Budget struck a ‘balance’, McEntee says in response to Ifac criticism
Minister for Foreign Affairs Helen McEntee has responded to criticism by the Irish Fiscal Advisory Council (Ifac) of overspending, and over-reliance on corporation tax, by saying the budget has got the balance right, Political Correspondent Harry McGee reports.
“People are saying we’ve spent too much. There’s people who said we haven’t spent enough. So I think what we try to do is get a balance here,” said McEntee.
She said that spending growth would be maintained at 6 per cent.
Arguing that the spending was an investment in people’s futures, she said it was being put into service, into retrofitting homes, investing in SMEs, and also supports for people feeling the impact of energy price hikes.
The Fine Gael Minister was one of a large number of Fine Gael TDs and Ministers who handed out the party’s pamphlet on Budget 2027 to Luas commuters at Stephen’s Green on Wednesday morning.
Pressed about the criticism by Ifac she said the Government had done its own figures as well, and the teams in the two Government departments responsible for the budget had set out a trajectory that she said was manageable.
McEntee said the Government was putting an additional €1 billion into the two fiscal buffer funds, on top of the planned €5 billion for 2027.
Asked if Minister for Culture Patrick O’Donovan was the biggest loser of the budget, given that the €100 culture card did not materialise, McEntee said every department had seen an increase.
She also said Chambers was very clear yesterday when saying that the card project, which is part of the programme for government, is still being worked on.
“It wasn’t achieved in this budget but we have three more budgets,” she said.
Asked if O’Donovan was naive in flagging it in advance, she said the commitment from Government was there and that all Ministers wanted to achieve as much as they could in their own departments.
‘We’re trying to protect people’: Taoiseach defends budget
Taoiseach Micheál Martin has defended Budget 2027, saying the Government was trying to protect people “as best we can in the midst of an international crisis”, Vivienne Clarke reports.
Martin said the budget came amid “major international global uncertainty” – oil and energy crises – which is fuelling inflation.
“We’re trying to protect people as best we can in the midst of that international crisis by tax measures for the workers, by a really strong focus on disability over the last two years, and in terms of the childcare costs on families, and reducing those significantly.
“Those three pillars were probably the major beneficiaries of the budget,” he said.
Martin said the “fundamental driver” for putting money aside was demographics, noting Ireland will have “far more older people” in the future, who will be more dependent on social protection and health.
“We will have to provide for that into the future,” he said.
The Taoiseach acknowledged there needed to be a change in focus in the taxation framework, in the composition of revenue coming into the exchequer.
“We have to change focus in our taxation framework to encouraging indigenous enterprise and scaling up enterprise, and that’s why the seed capital gains tax has been reduced somewhat, and why I think we have to do far more to create our own indigenous base, to kind of create a greater balance,” he told Newstalk’s Claire Byrne Show.
“We need to think more about how we scale our own companies, and how we ensure that they have capital available to them to grow and to develop.”
‘People have never felt as poor’ – Mairéad Farrell
Sinn Féin’s spokeswoman on public expenditure, Mairéad Farrell, has said there could have been a fairer way in Budget 2027 for the Government to address the challenges facing workers, Vivienne Clarke reports.
“This State has never been as rich, but people have never felt as poor as they do today.
“The majority of workers were left out of the tax changes that the Government announced yesterday and the problem here is that there actually was a fairer way of doing this and that would have been by cutting the USC from the first €40,000 that people earn.
“That would have actually meant something for all workers, for the majority of workers or the majority of workers today who work hard because the Ministers kept talking yesterday about those who work hard.
“Well I’m telling the Ministers very clearly here, those people who earn under €44,000, the SNAs, all the different people that really contribute to our society and to our communities, they do work hard as well and they should have been supported,” Farrell told RTÉ Radio’s Morning Ireland.
Budget 2027 ‘anything but a workers’ budget’ – ICTU
The general secretary of the Irish Congress of Trade Unions has described Budget 2027 as “anything but a workers’ budget”, Vivienne Clarke reports.
Owen Reidy also said it had been “a wee bit cheeky and gratuitous” for Minister for Public Expenditure Jack Chambers to “make a political point” during the budget announcement about the continuing industrial action by public service workers.
“I thought it was a bit rich. Unfortunately, we’ve heard for the last number of weeks and months that this would be a workers’ budget. It’s anything but a workers’ budget.
“We didn’t look for tax cuts, but we looked for indexation. We needed double indexation because they didn’t do it last year, which means basically that the tax system keeps up to pace with pay increases.
“Workers are probably about 2½ per cent worse off than they should be, so we’re not even standing still.”
The budget had made the ongoing dispute even more difficult to resolve, he told RTÉ Radio’s Morning Ireland.
“The Minister and his Cabinet colleagues need to reflect on this.”
The budget did not change anything in relation to the dispute, he added.
Means test for carer’s allowance to be eliminated in Government’s lifetime – Calleary
Minister for Social Protection Dara Calleary has said the Government will “get rid of” the means test for the carer’s allowance during the lifetime of this Government, but it has to be done on a “sustainable basis”, Vivienne Clarke reports.
“There’s very clear determination here that we will eliminate the means test. It will be done in the lifetime of the Government. I have other priorities,” he said on Wednesday morning.
Calleary pointed out that a couple on €126,000 a year from next July will get a full carer’s payment. A couple on €155,000 will get a partial payment.
“I have increased the thresholds by 84 per cent in my first two budgets,” he said.
Calleary said he wanted to ensure existing carers were “paid for”.
“Many existing carers have had their payments increased. And increasing the main payments by €10 a week is an investment of €750 million,” he told RTÉ Radio’s Morning Ireland.
The Minister defended the €3 increase in the weekly living alone allowance, saying it was now €25 per week.
“I’ve increased the availability of the fuel allowance,” he said.
For a single person, the means-tested limit for fuel allowance has gone from €27,700 to above €33,000.
“That would bring 10,000 more single people over the age of 66 into the fuel allowance.”
The fuel allowance will be paid over 28 weeks this winter, he added.
The Government was trying to assist with costs, but they could not assist with every cost, he said, adding that supports in the budget would encourage people to go into employment.
Government committed to increasing Defence Forces personnel – McEntee
Minister for Defence Helen McEntee has said increases in Defence Forces spending show “very clearly” the Government is committed to increasing overall spending and “increasing numbers”, Vivienne Clarke reports.
“What we’ve said is we want to continue to increase significantly our investment, our investment in the number of Defence Force personnel that we have.”
Increases in the budget would go towards recruitment for the Naval Service, along with investment in IT, “making sure we have the equipment to fully see what’s going on” such as radar and sonar.
“We’re investing in AI in the same way everybody else is as well,” the Minister told Newstalk Breakfast.
Bid to cut smoking ‘abject failure’, Dáil told
A packet of 20 cigarettes will cost €20.15 following a €1 increase in the budget, bringing the tax take to €16.03 or almost 80 per cent of the retail price, writes Parliamentary Correspondent Marie O’Halloran.
Ireland continues to have the most expensive cigarettes in Europe and now has the second highest cigarette prices in the world behind Australia, where a 20-pack costs €21.02.
The €1 increase was accepted in the Dáil on Tuesday night by 110 votes to 48.
The pro-rata increase in the price of a typical pouch of roll-your-own tobacco is €1.39, bringing the retail cost to €29.72.
Introducing the tax, Minister for Further and Higher Education James Lawless said the increase on tobacco products would yield approximately €63.1 million in a full year, and €5.1 million for the remainder of 2026.
Read the full article here.
Reaction to Budget 2027
Government TDs around Leinster House were largely pleased with the budget package, though the reaction elsewhere was mixed.
Many representative and interest groups welcomed aspects of the budget but said that it did not go far enough.
Owen Reidy, general secretary of the Irish Congress of Trade Unions, said the budget was “a halfhearted apology for last year’s”.
“The Government has taken some bare minimum measures, but it is far from the workers’ budget the Government claimed, and does not make up the ground workers have lost,” he said.
Employers’ group Ibec welcomed aspects of the budget but said it was disappointed the Government had accepted recommendations to increase the national minimum wage.
Read the full article here.
Opinion: Somewhat muted reaction from all sides to budget
The first budget of the Simon Harris-Jack Chambers combination, and the second of this Coalition, was presented on Tuesday to a somewhat muted reaction from all sides, writes Political Editor Pat Leahy.
Virtually all its main features had been flagged in advance and there were no last-minute surprises to excite supporters or inflame opponents; surprises, after all, can be risky and this Government is highly risk-averse.
The budget speeches were mostly received in polite silence. Government supporters were appreciative, but hardly ecstatic; Opposition TDs were critical but not exactly brimming with righteous fury. The responses flooding into the inboxes of TDs and journalists from the army of interest groups were mostly of the “we welcome ... but not enough was done” variety.
If a budget is an opportunity for a government to provide a statement of what it is about, then this Government is about keeping things going as they are, making incremental improvements, and above all, not annoying anyone.
Read the full article here.
Do you have questions on what Budget 2027 means for you?
The Irish Times has an expert team on hand to answer your queries. You can submit your question in the form below.
Questions will be answered in our Budget Q&A going live today by our experts: Irish Times Deputy Business Editor Dominic Coyle, Beryl Power, director at PwC and Ruth Gilligan, manager, at PwC Private Client Services.
The Irish Times view: Coalition being driven by events
What’s our view on the budget? Well, you can find it here.
The final few paragraphs of our Editorial today reads: “The Government, like many others, is running to try to keep up with cost-of-living pressures. There are tough decisions here, for sure, but this is not an excuse for a lack of longer-term thinking.
“And while it has some welcome measures, the budget gives the impression of a Government responding to events, rather than shaping them. Given the international upheavals this is understandable, to an extent. But continuing to base a public finance strategy on the health of a half dozen multinationals does not look wise.”
Main Points - Full list of Budget 2027 measures
If you want to check what is in the budget here is our detailed list of the Budget 2027 main points.
And here are some of the details on the €1.3 billion income tax package.
- Level at which workers enter 40 per cent income tax rate increased from the current €44,000 for a single person to €46,500
- Personal tax credit, PAYE and earned income credit to increase by €125
- 2 per cent band of USC increased by €1,600 to €30,300
Minister for Finance Simon Harris said the changes would see workers earning €50,000 a year paying more than €700 less in income tax and USC.
Sharp criticism from Fiscal Advisory Council
Trying to make sense of it all, Political Editor Pat Leahy writes in our lead story this morning that the Government “unveiled an €8.5 billion budget package on Tuesday to bring public spending to a record level, and drew sharp criticism from the State’s budgetary watchdog for increasing the reliance on ‘high-risk corporation tax’.
“The package will bring public spending to €125.6 billion next year despite tensions in Government over the insistence of Minister for Public Expenditure Jack Chambers to limit spending growth to 6 per cent next year.”
Good morning, and welcome to our live coverage on the day after Budget 2027. We will be bringing you more details, analysis and reaction over the day.
So, if you are catching up, reaction to the budget has been mixed. The total package of €8.5 billion involves a huge amount of extra spending and yet many groups - notably those struggling with fuel bills - aren’t too happy.
And spare a thought for Patrick O’Donovan, who suffered a very public rebuff when his widely touted plan for a €100 “culture card” voucher for 16-year-olds to attend cultural events was absent from the final document.
