The Government’s focus in the next budget has to be on transforming infrastructure, Taoiseach Micheál Martin has said as Sinn Féin insisted a cost-of-living package had to be included.
Such a package has been ruled out in advance of Budget 2026 in October, including payments that have benefited the average worker by €1,000.
In the Dáil Mr Martin said there would be supports in the budget but said the focus “quite simply has to be on transforming our infrastructure”.
Challenging the Government’s budget stance, Sinn Féin leader Mary Lou McDonald said the Taoiseach was “doubling down” on the removal of support payments “for struggling households at a time when living costs are through the roof”.
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Irish households are paying 30 per cent more than the EU average for electricity each year, almost €350 extra, recent Eurostat data shows. The ESRI said it was difficult to explain such a difference. The Government proposes to cancel the “very help they desperately need” in energy credits as part of a cost-of-living package in the budget, Ms McDonald said.
“People are being fleeced now today, when they open their electricity or gas bill, when they get to the checkout with the weekly shop, when they go to fill the car, and when they go to buy basic toiletries like toothpaste or shampoo,” she said.
Mr Martin acknowledged that prices are “relatively elevated” following the peak of inflation and that Ireland has the third lowest rate of inflation in the EU.
He said the Government had done a lot and “more than any other European government” in terms of cushioning and trying to reduce the impact of cost-of-living increases on people. This included extending the VAT reduction to 9 per cent on electricity and gas, which will save households €70 for gas and €55 for electricity.
Mr Martin said there will be a significant increase in the number of people eligible for the fuel allowance in September and that the carers support grant increased to €2,000 in January, benefiting 138,000 people. He said from June women can receive HRT free of charge.
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He also pointed to the back-to-school clothing and footwear allowance, the free schoolbook scheme and the free hot meals scheme in primary schools.
“We have to be prudent,” he said. “We have to be cautious and careful in terms of the resources that we have. And I know everybody wants us to spend billions, but that is not open to us.”
He said “we will be spending a lot. There won’t be any austerity in itself but there has to be some degree of caution because the situation could change” he said, in reference to the threat of US president Donald Trump’s 30 per cent tariff.
