Government Finance Minister Paschal Donohoe justifies maintaining the current budgetary plan and refraining from additional cost-of-living payments.
Ireland's Minister for Finance, Paschal Donohoe, has announced that the upcoming Budget 2026 will not include a repeat of the one-off cost-of-living payments provided last year. The government has ruled out a new cost-of-living package despite ongoing high inflation in essentials like food, energy costs, and mortgage rates.
Donohoe emphasized the need to restrain current spending growth in government departments, which has been rising by about 8 to 9 percent annually. He highlighted the necessity to rein in expenditure to ensure fiscal sustainability.
Instead, the budget will focus on long-term structural priorities. Transforming infrastructure to address existing gaps and support growth is a key focus, as underscored by Taoiseach Micheál Martin and echoed in the Central Bank’s pre-budget letter stressing capital investment over current spending.
Building economic and fiscal resilience is another priority, including broadening the tax base to reduce reliance on volatile corporation tax revenues and preparing for long-term fiscal challenges. Maintaining a credible fiscal anchor to avoid repeating past mistakes and support efficient public investment is also a primary concern.
Donohoe expressed concerns about the future of the economy and the need to avoid creating further difficulties. He emphasized the need to rein in spending and focus on permanent measures to support the vulnerable. The government plans to shift from short-term one-off payments towards more sustainable fiscal policies that focus on investment, controlling spending growth, and safeguarding economic stability amid significant uncertainty in global and domestic economic conditions.
In addition, Donohoe is negotiating hard through the European Union to avoid tariffs and their potential effects on the Irish economy, particularly those arising from US President Donald Trump's trade war. He also mentioned the challenges facing the economy due to this uncertainty.
Furthermore, Donohoe addressed concerns about the Occupied Territories Bill's impact on Irish businesses, stating that it refers to an extremely limited amount of trade that has taken place from the territories into Ireland. He also believes it is important for the Government of Ireland to diplomatically act to lessen and weaken the harm caused to the people of Gaza.
The Minister did not provide any new information about the Government's plans for the upcoming budget in the current paragraph. He has, however, defended the Government's plans for the budget, stating that they aim to bring forward a budget that is safe, doesn't add to uncertainty, and focuses on investment.
Business and politics intertwine as Ireland's Minister for Finance, Paschal Donohoe, discusses the upcoming Budget 2026, emphasizing the importance of financial sustainability and long-term structural priorities. He plans to shift from one-off payments towards more sustainable fiscal policies, focusing on investment, controlling spending growth, and safeguarding economic stability, despite ongoing high inflation and global economic uncertainty. In the realm of general news, Donohoe is also negotiating through the European Union to avoid tariffs and their potential effects on the Irish economy, addressing various economic challenges.
