Statement by Taoiseach Micheál Martin on Budget 2026 in Dáil Éireann

Check against delivery

Ceann Comhairle,

Thank you for the opportunity to speak on Budget 2026.

The last number of years have shown us that we are living in times of great change and disruption.

From Brexit and the COVID-19 pandemic, to inflationary pressures, the ongoing wars in Europe and the Middle East, deglobalisation and a move towards more protectionist and divisive policies including trade tariffs, the accelerating impacts of climate change, and AI and the rapid pace of technological advancements.

Each have intruded, disrupted and added uncertainty to our society and economy in different ways.

However, throughout all of this, we have demonstrated resilience and resolve, which can be attributed in large part to the hard work and talents of our citizens, enterprises, and those who have chosen to work and live here, and who have contributed greatly to our economy and society.

This resilience is also demonstrated by the strength of our public finances, which have benefitted from our prudent guidance over the years.

Employment levels are now at their highest level ever, with over 2.8 million people at work – 64,000 more year-on-year. Real wages are on the rise, while the headline inflation rate has stabilised.

Economic growth and domestic demand continue to be positive, while the traded sector of the economy continues to flourish. Exchequer tax receipts remain robust resulting in a strong fiscal position.

This strong domestic position has allowed us to carefully manage our resources and put aside reserves for the future when times are more challenging. We will, for example, have built up to around €24 billion in these funds by the end of 2026.

Despite this, we cannot take our economic success for granted. Huge international trade and geopolitical uncertainty leaves a small open economy like Ireland very exposed.

We must be conscious of the delicate position of the public finances, largely underpinned by volatile corporation tax returns, in the face of emerging economic threats.

At the same time, successive years of economic and employment growth has created capacity constraints and cost pressures in the Irish economy that must be addressed.

Continued and accelerated progress is needed in housing and infrastructure delivery, healthcare, energy, water, innovation, public services and addressing climate change. There are increasingly difficult choices to be made.

Now, during the first Budget of this government, it is essential we take steps in the right direction and make these decisions, to address and mitigate economic and societal risks, as well as prepare for very serious challenges ahead.

To meet the challenges of a growing population and economy, the government is increasing expenditure in a sustainable manner.

We do so, to a degree that is accurately commensurate with these changing economic and demographic trends.

Budget 2026

With Budget 2026, we must make continued and accelerated progress in delivery across areas such as housing, infrastructure, healthcare, energy, water, innovation, and in addressing climate change, taking on the reforms needed to deliver our ambitious plans – while also investing in our people and the services they need.

We aim to enhance living standards, support business and improve overall wellbeing for the entire country as well as invest in the productive capacity of the economy.

We must do this without adding excessively to inflationary pressures, while protecting the public finances over the medium term.

Through this Budget, I believe we are doing so in an ambitious but sensible manner and are making real strides in furthering the ambitions and commitments laid out in the Programme for Government.

While many European Governments are currently struggling when it comes to the public finances, we, in Ireland, are in a relatively unique position. Successful and prudent management of the public finances has enabled us now to invest substantially in our country’s future.

Budget 2026, as unveiled yesterday, sets out an overall package of €9.4 billion – with €8.1 billion of additional public spending and taxation measures amounting to €1.3 billion.

We are also continuing to build up the Future Ireland Fund and the Infrastructure, Climate and Nature Fund to help deal with future budgetary pressures.

Notwithstanding our commitment to investment, we have also ensured that future fiscal policy is on a sustainable basis. While one off welfare payments were essential in countering elevated cost of living pressures, we have undertaken to transition back to more permanent sustainable social protection measures.

We remain acutely aware of price level increases in recent years, and the impact inflation has had on businesses and households throughout the country.

We have now targeted cost-of-living supports at those most in need of them, supports that are sustainable, while we move to address the underlying causes, within our domestic control, that are driving up prices.

These supports include a €10 per week increase on weekly social welfare payments, a Christmas Bonus (100% of weekly payment) for long-term social welfare scheme recipients, an increase to the national minimum wage of 65 cents per hour (to €14.15) with consequential amendments to the USC, extension of the rent tax credit to the end of 2028, extension of Mortgage Interest Tax Relief for a further two years, extension of the 9 percent VAT rate on electricity and gas until end 2030 and a €500 permanent reduction in the third level student contribution fee.

Growing and Protecting the Economy

As a small global economy, Ireland has greatly benefited from the returns of international trade and the EU Single Market, as well as strong international relationships.

The introduction of widespread tariffs by the US, although capped at 15%, will no doubt impact on our economic growth and have been a serious consideration in preparing this Budget.

We are fully committed to delivering a strong and stable economy, in which every business, throughout every region of this country, has the opportunity to grow and succeed.

Improving our infrastructure through ambitious investment commitments will future proof growth in the economy for years to come.

Our recently published Action Plan on Competitiveness and Productivity manifests this commitment and acknowledges the urgency of increasing our competitiveness and productivity offering in the changing international landscape. This is complemented by our Action Plan on Market Diversification, published in August.

In Budget 2026, €1.3 billion is being allocated to the Department of Enterprise, Tourism and Employment for enhancing competitiveness and productivity, for the promotion of regional enterprise, for AI, and for Enterprise Ireland and the IDA to support our indigenous businesses to grow and expand and to attract FDI.

We are supporting our businesses through a range of enhanced tax measures including changes to the R&D Tax Credit, the Film Tax Credit, the CGT Revised Entrepreneur Relief, the Special Assignee Relief Programme and the Foreign Earnings Deduction and are extending existing reliefs including Digital Games Tax Credit, and the Key Employee Engagement Programme.

We are reducing the VAT rate to 9 per cent on food and catering and on hairdresser services from 1 July next year, supporting jobs.

We are also working to modernise and simplify our tax code to enhance our competitiveness and reduce the burden on businesses.

Infrastructure and Housing

This government is bringing about a step-change in the approach to infrastructure delivery.

We must be better at delivering the large scale, ambitious projects that our growing population and future generations deserve. Our continued economic competitiveness depends on it - it is the clear, unambiguous message from every analysis and stakeholder.

Our revised National Development Plan represents one of the largest ever and most significant capital injections in our economy in the history of the State.

We have set out annual sectoral allocations for capital expenditure for 2026 to 2030, and overall government capital expenditure ceilings to 2035 – this is a total public capital investment of €275.4 billion over the period to 2035.

Of this, €102.4 billion is being allocated for the next five years – an additional €23.9 billion on what was previously allocated in the NDP. A further €10 billion in equity and fund releases is being provided for megaprojects in water, energy and transport.

Crucially, a significant element of government policy in the housing market is to “crowd in” investment from the private sector. The State cannot, on its own, afford to build all the homes the country needs. A successful partnership between the public and private sector is essential in meeting the housing needs of our citizens.

Funding on its own is of course not enough to get us where we need to be. We have to make sure our systems and processes are streamlined, efficient and fit for purpose.

We are tackling delays in planning through the new Planning Act and increasing the resources available to An Coimisiún Pleanála. We have looked at our governmental processes and revised them through the Infrastructure Guidelines, and we are working to ensure wider uptake of Modern Methods of Construction.

We are identifying barriers to infrastructure delivery and how we can act quickly to find solutions. We are engaging and working alongside experts and wider industry on this and in the coming weeks we will set out our actions of reform – these will be grounded in practical, real-world knowledge and experience.

Just as infrastructure delivery is essential to our competitiveness, so too is the increased supply of affordable and sustainable housing. Much has been achieved in the last number of years, but we need to do more. Scaling up our delivery of housing is an economic and social necessity.

The delivery of homes is at the centre of the revised NDP, which includes €28 billion for Housing programmes. It will create the building blocks we need to deliver thousands of new homes – through upgrading our water and energy infrastructure, delivery of roads, and providing better public transport.

We have agreed reforms to rent pressure zones; initiated the process to regulate the short-term lets market; and introduced new design standard guidelines to help drive down the high cost of construction for apartment building in Ireland.

Increasing housing supply is a common problem amongst a wide number of western economies. However, few, if any governments are committing the scale of resources to building homes as Ireland is.

Homelessness remains a big challenge. Last month, Government announced the prioritisation of €50 million for housing acquisitions to support larger families with children, and Housing First clients, to exit long-term homeless emergency accommodation into safe, secure and permanent homes.

Building on the measures already taken, and with these challenges in mind, we are now in the process of finalising a new National Housing Plan for the next five years and beyond. This new Plan will build on our success under Housing for All and achieve further momentum across all aspects of housing delivery over the lifetime of this government.

We are allocating €7.2 billion in capital funding for housing - to support delivery of social homes and starter homes, for regeneration of towns and urban areas, for a new housing activation infrastructure fund, for retrofitting and for home adaptations.

Tax measures in this Budget include a reduction of the VAT rate on the sale of completed apartments, targeted corporation tax and income tax measures, and extension and enhancement of the Residential Development Stamp Duty Refund Scheme.

We are also expanding the Living City Initiative and will introduce a new Derelict Property Tax.

These tax measures will incentivise the provision of new residential units, help address the viability gap, accelerate the delivery of affordable homes and encourage more stock, and higher quality stock, into the housing market.

Digital

We are currently refreshing our National Digital and AI Strategy to ensure we accelerate and maximise the return from the digital and AI revolutions.

This includes our commitment to invest to make Ireland an EU centre of expertise for digital and data regulation. It is critical that we get the balance right between stimulating innovation and regulation, to ensure the EU is open for innovation and for AI business. We will continue to be a strong advocate in Europe for this.

With a thriving tech sector and a strong talent base, Ireland has the foundations in place to be a leader in specialised areas of AI and a vibrant location for AI innovation.

We will ensure we all realise the benefits of AI across the breadth of our society and economy.

Climate

Climate change is not a distant threat. More and more, Ireland is experiencing first hand its growing impacts. More frequent and intense storms, prolonged dry spells and unpredictable weather patterns are becoming the new normal. Storms Éowyn and Darragh, like others before, brought flooding, power outages and damage to infrastructure. These changes threaten our businesses, our homes and our way of life.

We have accepted challenging emissions reduction targets at EU and national levels and we have considerable work to do to achieve what we have committed to.

We know that there will be cost implications if we fall short of our EU targets. We must factor these into our policy considerations.

Change is underway across our economy and society to steer Ireland towards a low-carbon future. Reducing emissions is now at the heart of all our policies and sectors.

We are seeing encouraging signs. Ireland’s emissions have been falling for the last three years, and we now have lower overall emissions than at any point in the last 35 years, despite our population growing by 55% over that period.

We are making real progress in the areas of energy, transport and agriculture but latest EPA projections make clear one thing: we have to go further – taking climate action faster and at scale, particularly over the next five years.

€1.1 billion is being allocated to the Department of Climate, Energy and the Environment for measures such as residential and community upgrade schemes, retrofitting of public buildings, and funding for the climate action and environmental leadership programme.

We will invest in flood relief schemes, in building sustainability and resilience in our grid and accelerating our transition to renewable energy.

This Budget will also extend the VRT relief for electric vehicles until the end of 2026, and Accelerated Capital Allowances schemes for energy efficient equipment and for gas vehicles and refuelling equipment until the end of 2030.

Revenue raised from the increase in carbon tax will be ring-fenced for social welfare and fuel poverty measures to allow for a just transition.

Agriculture

Budget 2026 strengthens supports for farmers, fishers and foresters in rural and coastal communities in a manner that both supports incomes and ensures their long-term sustainability.

We are providing €2.3 billion to the Department of Agriculture, Food and the Marine for measures including Bovine TB eradication, the ACRES scheme, the National Sheep Welfare Scheme, the World Food Programme, and Bord Iascaigh Mhara programmes.

Additionally, we are extending the existing Farm Consolidation (Stamp Duty) relief, Farm Restructuring (CGT) relief and the Young Trained Farmer (Stamp Duty) relief to the end of 2029, in addition to an expansion of the scope of Farm Restructuring Relief to woodlands and forestry.

Shared Island

The Shared Island Fund, now a €2 billion commitment out to 2035 is, as an integrated part of the NDP, driving a step change in all-island investment cooperation.

The Narrow Water Bridge and Ulster Canal projects are well underway, and next year government resourcing will enable a new Dublin-Derry airlink and expansion of Ulster University in Derry and continue the transformative hourly-frequency Dublin to Belfast rail service.

New all-island investment programmes on enterprise, tourism, the bioeconomy and higher education research collaboration will also move up a gear in 2026, delivering real dividends across all sectors and for the island as a whole.

We will also continue at pace to develop new projects that deliver on our NDP agenda to build a more connected, sustainable and prosperous shared future for all communities, working with the Executive and through our strategic UK-Ireland 2030 partnership.

Disability

I am determined that this will be a government which moves forward with purpose in improving the level and scale of support for disabled people and their families.

I have established a Disability Unit within my department to enhance cross-government working and collaboration, to troubleshoot, to drive innovation and change, to give momentum to policy delivery and to simplify pathways and improve services – in effect to make things happen.

Last month, we set out our vision, developed with disabled people, for how we will begin delivering a step change in disability policy, across all of Government, through our National Human Rights Strategy for Disabled People 2025-2030.

This Strategy will be the foundation for an ambitious agenda over the coming years and is a commitment to ensuring all disabled people can live the life of their choosing, without barriers, fully participating in their communities and in our society.

Budget 2026 reflects this level of ambition and commitment and marks an important first step on the journey this government will take. €3.8 billion is being allocated to the Department of Children, Disability and Equality for disability services including residential care, day services, assessments, home support and personal assistance, and respite services.

Additional special education supports includes more school places, over 1,700 more SNAs and the roll out of the Education Therapy Service.

We are also increasing the carers allowance income disregard to €1,000 for a single person and €2,000 for a couple, and are increasing the Domiciliary Care Allowance to €380 per month (an increase of €20).

Child Poverty

As we said in the Programme for Government: “Child Poverty is not inevitable, and by ensuring a determined focus we can lift more children out of poverty, giving them the futures they deserve.”

The government’s recently published child poverty target will be our North Star for the rest of this government’s term. No more than 3% of children will live in consistent poverty by 2030. This would be the lowest figure in our history and would put us amongst the very best performers in Europe.

While no child should grow up in poverty, when children do experience difficulties, we will do everything we can to reduce the negative impact of poverty on their well-being and outcomes.

Children are our single most important investment for our collective future.

With resources targeted where they are needed most, the measures outlined in Budget 2026 are absolutely vital and will be a decisive step toward our goals.

As part of a €300 million package of supports for children and families, we are increasing child support payments by €8 for children under 12 and €16 for those over 12, increasing the Working Family Payment income thresholds by €60 per week, extending the back-to-school clothing and footwear payment to 2 and 3 year olds, increasing the weekly fuel allowance by €5, and extending Fuel Allowance eligibility to those in receipt of Working Family Payment.

We will continue to drive forward in the coming years.

Public Services

As our population rapidly increases, it is essential that everybody can continue to avail of our public services when they need them, in a timely and efficient manner, through increased access and improved delivery.

Education

We will continue to deliver a world class education system which breaks down barriers and ensures every child can achieve their full potential.

We remain committed to improved school attendance and supports for families in this regard and for further special classes and special school places for children with more complex needs.

Considerable progress continues to be made across the Senior Cycle redevelopment programme. We have also recently launched the Redeveloped Primary Curriculum Specifications for all primary and special schools across Ireland.

Investment in further education infrastructure, course choice, place availability and the tertiary sector including skills and apprenticeships is continuing at a rapid pace.

We have placed a particular emphasis on strengthening Ireland’s research performance. This will be critical to maintain and enhance our global competitiveness, drive innovation and create sustainable jobs. In this regard, increased funding has been allocated to post-graduate and PHD students.

A key theme of our Action Plan on Competitiveness and Productivity, which I mentioned earlier, is embracing research, innovation and skills. Changes to the research and development tax regime in this Budget, along with the publication of a Research and Development compass in the coming weeks are aligned with this.

These are important steps towards investing in the future, fostering and supporting innovation among our SMEs, boosting the innovation ecosystem and moving toward a more balanced, resilient model, underpinned by sustainable public investment.

Additionally, work is underway in the Department of Education and Youth to establish a Convention on Education. This will provide a once-in-a-generation opportunity for children, young people, parents, educators and wider society to help shape Ireland’s education system for decades to come.

Budget 2026 will continue to support the early years, education and further and higher education sectors through continued funding for Early Years including the National Childcare Scheme, Early Childhood Care and Education (ECCE), additional childcare places, additional teaching posts, investment in the school transport scheme, an increase in primary and post-primary capitation rates, funding for DEIS Plus and a new DEIS Plan, increased apprenticeships, and additional third level places.

Health

The demographic composition of Ireland is shifting. Our population is growing and ageing at a rapid rate, resulting in a greater level of demand for our health and social care services.

Preparing for this, since 2016, our Health budget has increased by over 94% from €14.1 billion to the €27.4 billion allocated in Budget 2026.

Through the ongoing implementation of Sláintecare and sustained investment, reform, and leadership, we are providing access to high-quality patient care, reducing waiting times and further cutting the cost of care.

Funding through Budget 2026 will provide for increased acute and community bed capacity, Home Support Hours, staffing, nursing home places, enhanced community care and expansion of mental health services.

Justice

In Budget 2026, €6.17 billion is being allocated to the Department of Justice.

We are committed to getting more Gardaí on our streets through increased recruitment and civilianisation, building safe and secure communities across the country.

We will equip frontline officers with body worn cameras and extend the use of facial recognition technology to tackle serious crimes.

Last month we published the new Rural Safety Plan. We are also establishing Local Community Safety Partnerships throughout the country. These will ensure that the needs of local communities will be addressed collectively, by those who are closest to both the problems and the solutions.

Work is underway on a Retail Crime Strategy, with actions to reduce retail crime and support affected businesses.

We are committed to support the rollout of the current Youth Justice Strategy, including expanding the network of Youth Diversion Projects. These initiatives make a significant impact by diverting and supporting young people at risk of becoming involved in anti-social and/or criminal behaviour.

Alongside this, we will confront crime and anti-social behaviour by strengthening Anti Social Behaviour Orders and banning face coverings to protect public safety.

We will dismantle organised crime gangs, target the drugs trade, and strengthen international cooperation to disrupt criminal networks.

We are also taking a health led approach to personal drug use, diverting people to treatment and support services, rather than the criminal justice system, so that we address the root causes of harm while keeping our communities safe.

Conclusion

In Budget 2026, we have set out to ensure sustainable economic growth against a very challenging and uncertain international economic background.

While economic growth is not a goal in itself, it gives us the resources to put the services and supports in place, to take care of people when they need a helping hand, and to ensure every person has the opportunity to succeed.

The objectives of this Budget are clear. It strikes the correct balance between addressing the challenges of today and ensuring our public finances remain sustainable over the medium-term to enable investment for future generations.

Along with the NDP, Budget 2026 plots an ambitious and inclusive course for our country and provides us with a tremendous opportunity to build a future that ensures prosperity and opportunity for generations to come.

I commend it to the House.