Happy Budget Eve everyone. On Tuesday afternoon the Minister for Finance Paschal Donohue and the Minister for Public Expenditure Jack Chambers will take to their feet in the Dáil chamber and unveil the first major financial statement of intent of the (relatively new) administration.
We all know that it will offer us very little by way of comfort, and while it won’t be a hair-shirt budget like we saw at the height of the crash, it won’t be a giveaway one either.
The fiscal coyness that we’re expecting is a far cry from the pre-election budgets of 2024 and 2023, when there were all manner of tax cuts and so-called one-off measures rolled out aimed at helping Irish consumers get through the cost-of-living crisis and the government through the election.
Now that the main parties are through the election gap and won’t have to face us again until 2029 or even 2030, maybe they think the need for giveaways has receded.
RM Block
Although that is not the narrative being spun in the run-up to this budget.
Speaking last month Donohoe promised that the Government would provide further supports to struggling families and individuals who continue to find the financial going tough.
“Over the last number of years, the last number of budgets that we have done had a series of one-off measures that were needed because inflation was so high,” he said. “Now what we need to do is replace those kinds of measures with more permanent, targeted measures that we can build on in the time ahead.”
He is entirely correct to suggest that more must be done to help those in our society who are struggling the most and more targeted measures aimed at lifting people out of poverty are essential – and they should have been deployed in 2024 and 2023 too.
Many will take issue with any suggestion that simply because the general rate of inflation appears to be under control – or at least is no longer flirting with double digits as it was two years ago – it means we are all doing just fine and no longer need any financial support from the State.
So, as they polish their speeches and add the final flourishes, maybe the Ministers might benefit from a whistle-stop tour of just how bad things still are for Irish consumers and how enduring that cost-of-living crisis is proving to be.
Every household faces different costs and at different levels but for the sake of clarity we will focus on some key areas including housing, groceries, heating and lighting our homes, fuel for our cars and insurance products.
The higher cost of housing
The people who have somewhere to call home tonight are the lucky ones and, as everyone knows, there are many thousands of people in Ireland who are relying on emergency accommodation or do not even have access to that.
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There are also many thousands more who are still living with their parents or in house-share situations when they want nothing more than a place to call their own.
But while people who own their own home or have secure rental accommodation might count their blessings, they also have to count the much higher cost of keeping that roof over their heads.

European Central Bank interest rates have been on a real rollercoaster ride over the last three years after a decade of stability.
In the middle of the summer just past the ECB cut its rates for the eighth time in just over a year. The move saw its main lending rate falling to 2.15 per cent compared with 4.5 per cent in the middle of 2024.
The multiple cuts have meant that a tracker customer with about €150,000 left on their mortgage has seen their monthly repayments fall by about €170 in 13 months.
So that is obviously good news for many people, but context is key.
While the rate cuts since the middle of 2024 have saved a certain cohort a significant amount of money, the rate hikes over the 18 months before that cost them dearly.
A typical tracker-mortgage holder paying about €1,100 a month in 2021 saw their repayments soar to close to €1,600 at the top of the ECB rate cycle. Their repayments today are about €1,350, so the annual cost of their mortgage is about €3,000 more than it was in 2021 just before the cost-of-living crisis started.
It is not just tracker holders who have felt the pain. People on variable rates and coming off fixed rates as well as those stuck with loans owned by so-called vulture funds are also in a much harsher financial environment and paying substantially more than before the cost-of-living crisis.
And anyone looking to borrow money to buy their first home can expect to pay substantially more than they would have at the end of 2021.
And leaving aside the higher cost of borrowing, the cost of actually buying is much, much higher than it was. While property-price inflation has eased in recent months according to the latest Daft.ie property price report, the average price of a three-bedroom semidetached house is now just over €421,000, with asking prices nearly 6 per cent higher than this time last year and almost 40 per cent more than five years ago.
The news is no better for renters, with a separate report from Daft suggesting that the cost of renting increased by an average of 1.6 per cent between April and June, taking the average open-market rent to €2,053 per month. That compares with a low of just €765 in 2011. It is also 51 per cent higher than before the outbreak of Covid-19 in 2020.
While the circumstances are different for every renter and rents differ wildly across the country, someone paying just 20 per cent more for their rental accommodation now than they were at the start of 2022 is likely to be worse off by about €4,000 a year.
The higher cost of shopping
According to recent figures from the Central Statistics Office, inflation was 2 per cent in August, up from 1.7 per cent the previous month.
Such a rate seems manageable.
But is only a small part of the story as anyone who has done a grocery shop over the last 18 months will readily testify.
The most recent Consumer Price Index (CPI), the State’s official measure of inflation, showed food prices rising at an elevated rate of 5.1 per cent year on year. That is the highest level of food price inflation recorded since December 2023, when the annual increase was 5.6 per cent.
But even that does not tell the full story.
According to recent figures from retail analysts Kantar Worldpanel, supermarket inflation is running at just under 6 per cent.
That is a long way adrift of the rate of almost 17 per cent that Kantar reported at the height of the crisis two years ago but – as we have said many times – the latest price hikes come on top of – and not instead of – previously high inflation.
It’s worth looking at that in more detail.
In the spring of 2022 Pricewatch filled a virtual shopping trolley in the name of research. The basket of 25 commonly bought supermarket staples includes items such as bread, butter, milk, chicken, steak, pasta, cornflakes, tea, baked beans and vegetables.
Last week we priced the same items. Not one of the items cost less than in 2022, with many of the items increasing sharply since the spring of this year.

Last week an 800g loaf of Brennan’s bread cost €2.09, which is 22 cent more than in 2022. Instant coffee from Nescafe that was €6.50 three years ago was priced at €14 – and the 200g jar we were able to buy back then has shrunk to 190g now. Eggs that cost €2.09 last week cost €1.59 in April 2022.
Chicken Breasts that were just €5 in 2022 were €12.98 last week, while steak that was €10.66 a kilo in the spring of 2022 cost €19.49 last week.
In April 2022, the 25 items cost €87.06, whereas at the end of March this year, the very same basket cost us €115.93, an increase of €28.87. Last week the price of the basket had climbed to €135.04, up €47.98 since April 2022, an increase of about 55 per cent.
But that is just 25 items and the same kinds of price hikes have been replicated up and down our shopping aisles.
According to the most conservative estimates the cost of groceries is about a third more than it was before the cost-of-living crisis began.
If a household typically spent just €200 a week to cover the cost of all shopping – from the big weekend shop to the midweek milk or bread bought in the local convenience store – the annual total in 2021 would have been €10,400. If the cost of groceries is now 35 per cent more than it was, then the annual price of groceries over the next 12 months will be €3,640 more than it was just four years ago.
Heat and light
Then there is energy. The cost of oil and gas soared in the immediate aftermath of Russia’s invasion of Ukraine in the spring of 2022 and consumers paid dearly for it.
In 2021, a typical Irish home would have been spending €2,000 on gas and electricity but over the course of 2022 and the first half of 2023, the annual average jumped to about €4,000.
Prices started to ease back again but in recent months they have begun to climb for many Irish consumers. The most recent hikes rolled out by most providers have added about €200 to the annual cost of domestic energy.
If prices stay at their current level over the next 12 months – and there is no guarantee they won’t go up – then most people will be spending about €1,400 more between now and Budget 2026 than they were over the course of 2021.
The high cost of insurance
The news is equally bleak when it comes to insurance.
The three main health insurance providers have all recently increased their prices for the second – or even third – time in just 12 months.
First out of the blocks in recent weeks was Laya Healthcare, which introduced hikes averaging 4.5 per cent. Then it was the turn of Irish Life Health, which imposed an increase amounting to an average of 3 per cent. The VHI announced hikes of the same percentage.
But the headline price increases are misleading and hide a more grim reality, which will see many people paying between 15 and 20 per cent more for their policies next year than they have done this year.
According to the Health Insurance Authority, prices jumped by about €200 between 2024 and 2025. And that is for just one person for one year. It is not a wild exaggeration to suggest that a family of two adults and two children have seen the annual cost of their cover climb by more than €800 since 2021.
The latest inflation figures from the CSO showed the cost of motor insurance climbing by 5.8 per cent in the 12 months to August. But that is just a single year and a typical family is spending more than €400 more a year on car insurance than they were four years ago – and we are being conservative with that estimate, as many people will readily testify.
And speaking of cars. In September 2021, a litre of diesel cost an average of €1.45 according to the AA.
In August of this year, it cost €1.67. The average motorist drives 16,000km (9,900 miles) every year. Driving the average family car, which does 12.4km per litre (35 miles per gallon), the average Irish driver spent about €1,870 on diesel in 2021 while 12 months driving at today’s prices will cost a motorist €2,154, or €284 more.
Then there is the higher cost of broadband, mobile phones and television packages, which will add another €500 at least to the costs of a typical household.
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On top of that there is the high cost of entertainment – or social inclusion, to give it the formal name adopted by the Insolvency Service of Ireland. If we allow a family of four €5,000 a year to cover a social life – and that is close to the recommended figure from the ISI – and allow for a 20 per cent increase over the last three years, the bills will be €1,000 more than they once were.
Obviously tax cuts and once-off measures introduced in recent budgets, as well as wage increases for some, have offset a portion of the hikes outlined above but it is undeniable that the spending power people once had has been greatly diminished.
If we tot up the numbers above – and they are by no means comprehensive – then many Irish households will find themselves spending about €12,000 more over the next 12 months than they did in 2021.
And of course that is an after-tax figure, so many will need to earn about €25,000 more just to keep themselves in the same financial position they were in four years ago.
The money Ministers might do well to remember that when they are telling us how well we are all doing and how we no longer need those one-off measures in Tuesday’s budget statements.