Speech by An Tánaiste, Simon Harris TD, on Budget 2026, Dáil Éireann, 8 October 2025

Check against delivery

Ceann Comhairle,

Can I take this opportunity to update the House in relation to the illegal detention of five Irish citizens in Israel.

Overnight, a second flotilla was intercepted by the Israeli Authorities.

It was carrying five Irish citizens, including a member of this House, Deputy Barry Heneghan.

I have been briefed on the situation this morning by our Irish Ambassador in Tel Aviv, Sonya McGuinness. I was also in contact with Deputy Heneghan’s office this morning to brief them.

Similar to the interception of a separate Flotilla last week, we now expect that all those detained, including Deputy Heneghan, will be transferred to Ashdod Port for processing.

From there will be brought to a detention facility south of Tel Aviv, which is likely to take up most of the day.

Ceann Comhairle, let me be clear – it is my priority and that of my Department to ensure the safety and wellbeing of our citizens.

Our officials on the ground have been in contact with the Israeli authorities regarding the next steps and will visit our citizens as soon as possible.

I will endeavour to update the House as soon as is appropriate and let me assure everyone all efforts are being made to make contact with our citizens and ensure their safety and wellbeing.

These individuals are part of a peaceful Flotilla seeking to highlight the ongoing humanitarian catastrophe and genocide in Gaza.

International law has to matter. I will continue engaging with international partners to ensure Israel is held accountable under international law.

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Ceann Comhairle,

I am pleased to have the opportunity today to commend Budget 2026 to the House.

I believe it is a budget which strikes the right balance in meeting the economic challenges facing our country, protecting our economy and jobs, delivering more homes, improving access to vital public services like health, education and disability, and supporting families and children who need the most help.

Our commitment to the Irish people in the Programme for Government and, indeed, in the preceding election campaign, was to provide stability and deliver progress, to secure Ireland’s future.

We clearly set out our strategy for the public finances based on a set of core principles which included: increasing public sector investment to address infrastructural deficits, including using windfall receipts; building up our long-term savings funds; running budget surpluses; and maintaining a broad tax base with the postponement of income tax changes in the case of economic headwinds.

Our strategy on the public finances has served us well to get us to this juncture and we have stuck to these principles in designing the coherent package contained in this first of five budgets which will be delivered by this coalition.

Minister Paschal Donohoe has put together a policy driven taxation package with a clear sense of purpose to stimulate housing development, to shore up key sectors in our economy - including small business and farming - to protect jobs, and to support households.

On public expenditure, as outlined by Minister Jack Chambers, we are making a major allocation in social welfare targeting those most in need including our pensioners, those living with a disability, our family carers, and putting a particular focus on children living in poverty.

We were very clear that it is now time to move to a more normal budgetary approach, rather than one-off packages, and I am pleased we have been able to make the kind of permanent, structural changes to help people with the cost of living, particularly:

• Extending the lower VAT rate for gas and electricity bills for 5 years;
• Permanently reducing student fees by €500 from January 1st;
• Taking the first steps to abolish the carer’s means test;
• Reducing VAT on hospitality to 9% to protect jobs across the country;
• and increasing the R&D tax credit to encourage investment and innovation.

We must make political choices over the course of the Government’s term, not just in any one Budget, and the choices we are making are about keeping Ireland economically safe, socially just and future focused.

Budget 2026 is based around three core priorities:

1. Protecting jobs and the economy.
2. Building more homes and the infrastructure our country needs.
3. Supporting the most vulnerable and improving access to services.

1. Protecting Jobs and the Economy

Unlike other members of this house, we never take full employment for granted and we know now is a time when we need polices to sustain competitiveness and protect jobs.

This Budget is very much designed to support employment and business viability, particularly in uncertain global conditions.

The permanent 9% VAT rate for hospitality, hairdressing, and food services finally provides certainty for this key sector of small businesses, which are essential employers in our towns and villages, and are for the most part the small, independent Irish outlets which make up a unique part of our tourism product.

This measure will come into effect from the 1st of July 2026. This will cost €232 million in 2026 and €681 million in a full year. It will support more than 150,000 jobs in these sectors right across the country.

Many of these workers are minimum wage workers and they will benefit from the increase in the minimum wage to €14.15 per hour as well as tax adjustments to ensure they remain outside the top rates of USC.

Overall, this minimum wage increases benefits 200,000 workers and all workers will also now have an automatic entitlement to a pension, as auto-enrolment begins.

We need to back enterprise and innovation right across our economy, and Research and Development supports are a key driver of high value employment.

I am therefore very pleased that Ministers Donohoe and Burke have overseen an increase in the rate of the R&D tax credit from 30 to 35% and an increase in the first-year payment threshold from €75,000 to €87,500 to support smaller R&D projects.

Building on the Action Plan on Competitiveness & Productivity and the Action Plan on Market Diversification, Budget 2026 will also deliver on tax simplification for businesses, and we will see an expansion of supports for the visual effects and digital games sectors.

We will also support our entrepreneurs and SMEs with targeted reliefs.

Just like other businesses, our farmers need certainty and Ministers Donohoe and Heydon have delivered a significant commitment to generational renewal with the extension of the Farm Consolidation, Farm Restructure and Young Trained Farmer reliefs as well as the expansion of the Farm Restructuring Relief to include woodlands and forestry.

We have also funded targeted industry specific supports to resource the TB Action Plan, deliver a Tillage support scheme, ensure timely payments under the ACRES Scheme and continue the National Sheep Welfare Scheme.

Meanwhile, we will increase current spending on Climate to support Just Transition and invest Carbon Tax revenues in community energy upgrade schemes and retrofitting, as well as growing investment in renewable energy generation and the circular economy.

2. Building More Homes and Tackling Dereliction

We all know the housing crisis is an emergency and that requires us to react with a multifaceted response and all arms and agencies of the state acting on an emergency basis.

That is what we see in Budget 2026 with a massive capital investment in housing, water and energy infrastructure.

The Minister for Finance is using the tax system to stimulate housing development particularly the construction of new apartments and the redevelopment of derelict properties to a much greater extent with the substantial expansion of the Living City initiative.

The conversion of the Derelict Sites Levy to a Derelict Property Tax under Revenue with stronger enforcement also sends an important signal as to the seriousness of the Government’s intent here.

The Budget will also see increases for An Coimisiún Pleanála and Irish Water to speed up planning and infrastructure delivery.

We are also extending the Help-to-Buy scheme for a further five years to support first-time buyers.

Furthermore, we have extended the Renters’ Tax Credit to over 300,000 beneficiaries for the lifetime of the Government and, for those who are continually seeking to misrepresent the priorities of this Government, I would like to point out that this measure is a larger financial commitment than the VAT9 reduction for hospitality.

The budget allocation for the Department of Housing also sees significant increases for the delivery of starter and social homes, and the provision of homeless services.

3. Supporting the Most Vulnerable and Improving Access to Services

I am particularly pleased that Budget 2026 is prioritising those most in need, including our pensioners, those living with a disability, our family carers, and putting a particular focus on children living in poverty.

We are increasing the weekly rates of the Child Support Payment by €8 per week for children under 12 and by €16 per week for children 12 and over and expanding the Back-To-School Clothing and Footwear Payment to 2- and 3-year-olds.

We are increasing the Fuel Allowance payment and extending eligibility to those in receipt of Working Family Payment meaning that 50,000 more households will now benefit. Income thresholds for Working Family Payment are also increasing by €60 for all families.

We will raise the thresholds for those receiving income assessed subsidies to make childcare more affordable and increase access to childcare with 35,000 more children to benefit from the National Childcare Scheme.

We will also invest €52 million in core funding to improve pay and grow capacity in the childcare sector.

The Minister for Children is in the process of developing the Action Plan on Childcare and this will lead future progress on the affordability, accessibility and quality of the early childhood, education and care system.

The €10 increase in core social welfare rates – at twice the rate of inflation – will also assist pensioners, carers and people with a disability as will the changes we are making to the Fuel Allowance. The Programme for Government commits us to getting the Old Age Pension to €350 over the lifetime of Government and this first Budget sets us on track to do that.

We will also begin abolishing the means test for carers by increasing the earning disregard for Carer’s Allowance by €375 to €1,000 for a single person and by €750 to €2,000 for a couple, as well as increasing the associated Carer’s Benefit income limit by €200 to €825.

We are also increasing the monthly Domiciliary Care Allowance by €20 a month.

There will be a Christmas Bonus which means a 100% increase in the weekly rate of payment for eligible recipients including pensioners, people with disabilities, carers and lone parents.

Public Services

We have also delivered a strong, balanced package for health, education, disability and social care services.

Disability

We are committed to delivering a step change in disability services and Budget 2026 will increase spending on disability by €628m in a single year which will increase residential care provision, respite, personal assistance and home support hours as well helping to secure the sustainability of the Section 39 sector.

Education

In Education, Minister Helen McEntee will introduce DEIS + which means extra funding for schools in areas where children are at the highest risk of disadvantage, as well as an increase in capitation funding for primary and post-primary schools.

Significant investment is being made in special education with 860 additional special education teachers and over 1,700 new SNAs to support students with additional needs.

We have also provided funding for the new Education Therapy Service to roll out therapy supports directly into special schools.

Health

In Health, Minister Jennifer Carroll McNeill will focus on improving access to services with a record budget of €27 billion for next year - an increase of €1.5 billion.

This includes additional funding to address the needs of an ageing population and to improve the health, wellbeing and quality of life of this cohort, including an extra 1.7 million home support hours in 2026.

There will be focus on improving regional equity in access and reducing waiting times, funding for 3,300 new healthcare positions and focused investment in older people’s care, mental health, and acute services.

Services will be available on a 5/7 basis, improving patient flow and ensuring care is accessible when people need it most.

We are investing in safer, higher-quality care through prevention, early intervention, and service-wide improvements, including: increased immunisation uptake, smoking/vaping cessation, screening, and targeted programmes to tackle obesity, frailty, and chronic disease.

To meet growing demand and improve access, we are opening new capacity and reforming how care is delivered as well as expanding the workforce.

This means 251 new acute hospital beds and 280 community beds, as well as new surgical hubs and primary care centres.

Law & Order

We are funding An Garda Síochána for recruitment of up to a further 1,000 trainee Gardaí and an additional 200 Garda Civilian staff to fill valuable specialist roles and facilitating the ongoing redeployment of trained Gardaí to frontline policing.

The Prison Service is receiving an allocation to provide up to 150 additional staff.

Additional funding of €11.5 million is also being provided for Domestic, Sexual and Gender Based Violence initiatives and the associated agency, CUAN.

Transport, Communications, Arts, Media & Sport

There will be an extra €270 million to fund continued delivery of public transport, roads, maritime, active travel and aviation sectors.

We are providing additional funding of to support the continued rollout of the National Broadband Plan.

We are bringing the total investment in the post office network to €15 million per year.

The basic income for artists pilot scheme will be replaced with a permanent scheme that will add extra capacity every year so more and more artists can benefit and the application criteria will also be broadened to accommodate more artistic disciplines.

Funding is being increased for TG4, to ensure the provision of high-quality Irish language content, and the Media Fund, supporting public service broadcasting and journalism through Coimisiún na Meán, is also being increased.

We are also providing significant increased current and capital funding for the development of world-class sports facilities nationwide and resources for local sports developments.

Department of Foreign Affairs & Trade

Turning to my own line Departments, I am proud that we are increasing the funding for Ireland’s international development programme, Irish Aid. At a time when aid cuts by some others are affecting basic health and education systems, especially in Africa, Ireland will stay true to our values – and to our interests.

Funding for the Irish Aid programme managed by the Department of Foreign Affairs and Trade will be increased by €30 million in 2026, to a total of over €840 million. This is the highest level ever in the history of the aid programme.

This increase will enable scaled up humanitarian assistance for the devastated people of Gaza and broader support for a credible two-State solution.

It will also allow us to focus more effectively on the continuing conflict in Sudan, which has created the most severe humanitarian crisis globally – with some 12 million people forced from their homes since April 2023.

This is a time of unprecedented humanitarian crisis globally, all in the context of the already existential threat of climate change.

It is a time to reassert our support for the Sustainable Development Goals, and to work with our partners to reinvigorate progress before their target date of 2030.

Our priorities, as set out in the whole-of Government development policy, A Better World, remain wholly valid. As does our overarching approach: to focus on poverty and hunger in some of the most vulnerable countries and communities, especially in sub-Saharan Africa, and to work to reach the furthest behind first.

I want to ensure that in 2026, we can redouble our focus and strengthen the impact of all of our funding: whether it is for our bilateral programmes, or through the European Union, the United Nations or in collaboration with NGOs.

For instance, I want to develop the next phase of Ireland’s child wasting initiative, which has been having an impact on the scandal of severe child malnutrition in Africa over the past three years.

We will strengthen our work with partners, including UNICEF and the WHO, to tackle the unacceptable reality in a world of plenty that almost half of all deaths globally of children under five are linked to undernutrition (with over 3 million deaths annually); that 45 million children are suffering from wasting; that at least 150 million children are stunted.

We will also strengthen our partnership with the Global Fund to Fight HIV, TB and Malaria, which is successfully reducing the incidence of these diseases and has already saved over 70 million lives.

In all of our work, we will maintain a clear and sharp focus on gender equality and the empowerment of women and girls, and on the fight to end gender-based violence.

Our commitment will be unwavering at a time when some are pulling back – because it is in line with our values and is the right thing to do; and because global prosperity depends on it: there will be no progress on sustainable development, in Africa, and globally, without a clear commitment to gender equality.

The further allocation which the Government has approve for Foreign Affairs and Trade will allow us to continue our investment in the Passport Service to ensure we continue to process passport applications ahead of target turnaround times and maintain the current excellent service to citizens.

In addition, the redesign of the passport book and card and the upgrading of the high security personalisation printing machines will ensure the integrity and security of the Irish passport as an international travel document.

I am conscious that we are facing new global trade challenges and in response, I will reinforce Ireland’s Embassy and Consulates General across the USA, as well as reinforcing our teams in key locations around the world to support Market Diversification opportunities.

The funding will allow us to reinforce and further expand our Diplomatic network as part of our Global Ireland Strategy.

Last month we opened three new embassies in Belgrade, Chisinau and Sarajevo, and plan to open two Consulates in Malaga and Melbourne next year.

Combined with the further strengthening of our existing mission network it will allow expanded promotion of Ireland’s trade, culture and diaspora priorities abroad.

We are providing an additional funding to the Emigrant Support Programme to support our diaspora and the Reconciliation Fund to further support peace and reconciliation on the island of Ireland.

Ireland will assume the rotating Presidency of the Council of the European Union on 1 July 2026, thereby becoming responsible for advancing the Union’s agenda against an increasingly complex global economic and geopolitical background.

The Presidency will impact all areas of Government and the Government is committed to ensuring the necessary budgetary provision to deliver Ireland’s important Presidency obligations successfully.

Given the centrality of our EU relationships and the leadership role we will be assuming in 2026, provision has been made in the overall Budget ceiling for the requirements of the EU Presidency and specific funding allocations will be made available to Departments in the revised estimates for 2026, published before the end of this year, including the requirements of the Department of Foreign Affairs and Trade.

With the EU Presidency fast approaching we are increasing our funding to EU citizen engagement programmes, the EU careers strategy; and the Enlargement and European Fundamental Values Fund which will assist EU candidate countries to prepare for their membership of the EU and supports the protection of fundamental values, including the Rule of Law, in Europe.

The government is firmly committed to continuing its strong support for Ukraine in the face of continuing Russian aggression. €100m was provided this year in non-lethal military support in addition to humanitarian assistance. It is planned that a further substantial package of non-lethal support will be announced separately.

Defence

Globally, and indeed in Europe, we are experiencing an increasingly challenging and volatile security environment. In that context, Ireland has a responsibility to invest in the Defence Forces, to protect our citizens, our values and our sovereign interests and to continue to contribute to international peace and security.

To that end, and in recognition of the significant ongoing transformation and reform evident throughout the Defence Sector, I welcome the increased allocation of some €1.5 billion now provided to the Defence Vote Group, comprising of the Defence & Army Pension Votes, in Budget 2026.

The Defence Vote allocation has increased to €1.172 billion in 2026 – reflecting an increase of €157 million (15%) on the corresponding 2025 allocation.

Current expenditure will increase by €72 million (9%) while capital expenditure is set to increase by €85 million (40%) on the corresponding 2025 allocations.

In 2026, the Defence pay allocation will rise to almost €600 million – an increase of €33 million on 2025. This level of pay funding will provide for the full impacts of the National Pay Agreement, along with the creation of new posts throughout the Department and the Defence Forces in critically important vital security areas, such as cyber security.

This Government remains committed to increasing our Defence Force numbers and today’s allocation will provide for the recruitment, training and support of an additional net 400 PDF personnel in 2026, as well as further funding to support the recruitment effort. As evident by the increasing number of inductions, there remains a huge interest in joining the Defence Forces and serving our country proudly.

The non-pay current expenditure allocation of €276 million has increased by €39 million, with virtually all non-pay spending areas set to benefit from an increased allocation. As well as providing for essential, ongoing operational costs, this non-pay allocation will also provide targeted funding to facilitate investment in key strategic priorities, encompassing Digital Transformation, Maritime Security and National Societal Preparedness and Resilience Campaign Initiatives.

Funding is also provided to the Reserve Defence Force and Civil Defence, two organisations with a proud record of support to the State.

The capital allocation for Defence for 2025 2026 will be the largest such allocation ever provided, at €300 million, and indeed, the Defence 2026-2028 multi-annual capital allocation will facilitate almost €1 billion in capital investment to 2028.

This level of capital funding will allow progress on significant Defence equipment and infrastructural upgrades, as well as replacement programmes across the Defence Forces, as identified for prioritisation in the Report of the Commission on the Defence Forces.

In particular, planned capital investment in 2026 on the development of our military radar and subsea awareness capabilities is very timely and welcome.

Aligned with the increase to capital investment in Defence equipment will be an increase to the Defence Built Infrastructure allocation - investment that will facilitate progress on accommodation, dining, storage and training upgrades across various military installations throughout the country.

Funding of €317 million has been allocated to Army Pensions for 2026.

Spending on this Vote is demand-led and this allocation will allow for the payment of pensions and related costs in respect of some 13,500 pensioners, in addition to providing for a net increase of 220 new pensioners next year.

I want to commend the Department of Defence and the Defence Forces for their ongoing and excellent commitment and effort to the state and public service.

The funding now provided to defence will not only progress the ongoing implementation of recommendations arising from the Commission on the Defence Forces and the Independent Review Group, but will also enable the Defence Forces to continue delivering effectively on all their key domestic and international responsibilities.

Conclusion

Ceann Comhairle, I am conscious as I stand here today as Foreign Affairs Minister of the very different budget scenarios facing our near neighbour in the UK and some of our EU colleagues.

We should not take our own economic strength for granted. It is not by accident that we are in a position to make the investments we are making, and we need to continue the careful budgetary strategy which has seen us run general government surpluses over the last three years. For this year, the surplus will be €10.5 billion and for next year the surplus will be €5.1 billion.

We know we are still facing into considerable uncertainty in a new environment of US tariffs and a time of geopolitical upheaval more generally.

We have seen the volatility in our corporate tax receipts, and we know overreliance is not a risk we can afford to take.

That is why the Government has made the choice to put money aside in our two long term savings funds so that we are prepared for challenges that may lie ahead. These funds will have built up to €24 billion by the end of next year and more than €40 billion by the end of this Government’s term.

We cannot do everything in one Budget, but I think we are making the right political choices for the year ahead and for the longer term.

It is a balanced, responsible budget which invests in our people, protects jobs and shores up our economy against outside risks.

It prioritises housing and public services in line with our values as a society.

It provides targeted assistance with the cost of living based on permanent, sensible reforms which will provide ongoing support to children and families, older people, carers and people with a disability.

It will help to meet the challenges we face in the here and now and pave the way to securing Ireland’s future.

I commend Budget 2026 to Dáil Éireann.

Go raibh maith agat.

ENDS

Press Office

8 October 2025