All eyes remain on next Tuesday when Simon Harris and Jack Chambers will unveil Budget 2027. While it may seem to some that the Government are flush with cash, it has long been clear that this will be the leanest budget since before the pandemic.
It is Harris' first budget as Minister for Finance, and he hasn't been shy about what to expect. The Tánaiste has spent months trailing his new Savings and Investment Account in the media, which he clearly intends to be his legacy in Finance before he returns to the Taoiseach's office in November 2027.
The last Budget favoured business, introducing the 9% VAT rate for hospitality, and as a result, most households felt little benefit. The Government is determined not to repeat that mistake. An increase in the point at which workers pay the higher rate of tax looks certain, another Harris priority for the Fine Gael base. Movement on childcare is likely too, if the Government is to meet its commitment of €200 per month childcare by the end of its term.
Energy supports and what form they may take will also be one to watch on Tuesday, with this summer’s fuel protests still fresh in the Government’s mind. Universal energy credits are off the table, with targeted supports more likely such as through the fuel allowance and changes to the VAT on home heating oil. Whether these measures will be enough to help households through another expensive winter will be the real test.
The minimum wage is a harder call. The Low Pay Commission has recommended a 79c increase to €14.94 from January 1st. If implemented, a full-time minimum wage salary would pass €30,000 for the first time. Business groups are united in their opposition, and with this Government often proclaiming its pro-business approach, it will be a difficult decision to make. Government has never rejected a Commission recommendation, but in theory they could compromise by opting for a smaller increase. However, the Government remains committed to reaching a living wage, currently set at 60% of median hourly earnings, by 2029. Any smaller increase now will only make the climb steeper later.
Opposition parties also had their share of Budgetary attention this week, with Sinn Féin, Labour and the Social Democrats each unveiling their alternative budgets this week. Notably, Labour called their document ‘A Future We Can All Afford,’ while the Social Democrats went with ‘A Future You Can Afford.’ If the parties can’t tell their own slogans apart, voters may well struggle to differentiate them as well.
The substance of these proposals is all too familiar: far more spending than the Government has committed to, paid for by higher taxes on the wealthy and large corporations. Unsurprisingly, little of it will make it into Tuesday's Budget.
Gone are the days when what is announced on Budget Day comes as a surprise to keen politicos, but there is plenty of time for the Government to throw a surprise announcement into the mix.
Political Update
Civil Service industrial action threatens disruption to Ireland’s EU presidency
Senior Government officials have warned that a Civil Service work-to-rule could cause serious disruption to Ireland’s Presidency of the Council of the European Union. The action could slow efforts to secure agreements on European legislation by restricting duties, travel and work outside contracted hours.
The dispute forms part of wider public sector demands ahead of expected pay talks, with a one day strike planned for 14 October. Ireland’s presidency has progressed smoothly to date, but prolonged industrial action could complicate ministerial meetings and negotiations in Brussels and Luxembourg.
Economic Update
Tourism sector seeks Budget support amid slowdown in US visitors
The Irish Tourism Industry Confederation (ITIC) has warned that falling North American visitor numbers, rising business costs and limited accommodation capacity are putting pressure on Ireland’s tourism sector. CSO figures show arrivals from North America fell by 3 per cent in August compared with the same month last year, while spending declined by 3 per cent to €262 million. Although overall visitor numbers are up this year, ITIC said the slowdown was concerning given the importance of US visitors, who typically stay longer and spend more.
Ahead of Budget 2027, ITIC is seeking the restoration of the 9 per cent VAT rate for visitor attractions, campsites and adventure operators to improve competitiveness and support regional businesses. Tourism bodies are also calling for additional accommodation, particularly outside Dublin, amid concerns about new short-term letting rules. ITIC argues that addressing costs, capacity and overseas marketing would help protect the sector against weaker demand and international uncertainty
Sustainability Update
European Commission to scrutinise Ireland’s progress on climate targets
The European Commission will hold talks with the Government over Ireland’s slow progress towards its 2030 emissions reduction targets. EU Climate Commissioner Wopke Hoekstra said all sectors, including land use, would be reviewed to identify barriers and potential solutions. Ireland is among nine EU member states falling significantly behind their national targets, with Hoekstra stressing that agreed commitments must be taken seriously.
The Climate Change Advisory Council and Irish Fiscal Advisory Council have separately warned that Ireland could face costs of up to €26 billion for failing to meet its 2030 obligations. Minister for Climate Darragh O’Brien reiterated that Ireland would miss its targets but said its ambition remained unchanged, citing retrofitting supports, public transport investment and the renewable energy pipeline. The intervention comes ahead of Ireland leading the EU delegation at the COP31 climate summit in November.
Around the World
Investigation launched into attempted crash of Israel-bound flight
The United Arab Emirates has launched an investigation after a co-pilot allegedly attempted to crash a flydubai flight carrying 170 passengers from Dubai to Tel Aviv, stabbing the captain in the process. The aircraft descended almost 14,000 feet in under 30 seconds before the injured captain opened the cockpit door, allowing passengers to restrain the attacker. A reserve crew on board subsequently landed the aircraft safely in Saudi Arabia.
Israeli Prime Minister Benjamin Netanyahu said Israel may participate in the investigation, which will examine the attacker’s motives and whether others were involved. Israeli security officials initially assessed that the co-pilot was likely acting alone, while UAE authorities are investigating possible terrorist links. No Iranian involvement has been established, and flydubai has warned against premature speculation. The incident has heightened security concerns ahead of Israel’s forthcoming election, where national security is a central campaign issue.