Budget 2026: Ministers iron out department-by-department spending details

Paul Hosford and Louise Burne break down what we are likely to see on Tuesday across each of 12 government departments 

Budget 2026: While the budgets for many departments remained unsettled tonight, Sunday, there are some indications on what has been agreed. Irish Examiner Visual Media

Frantic last-minute negotiations on the final shape of Budget 2026 will continue on Monday with government sources describing the process as “a slog” on Sunday evening. 

Taoiseach Micheál Martin, Tánaiste Simon Harris, and minister of state Seán Canney met tonight, Sunday, to iron out the details.

While many departments’ budgets remained unsettled, there are some indications on what has been agreed.

Enterprise and tourism

After some debate, it is expected that Vat for restaurants will drop from 13.5% to 9% from July.

Despite some public criticism of the fact that there will be no distinction between smaller restaurants and chains, one source argued that many of the chains are franchises and “they’re all small businesses and families”.

“They just have the benefit of the name over the shop to attract people,” one person stated.

It is also expected there will be “heavy investment” in new markets for tourism, focusing investment in locations where new flight routes have been recently introduced.

“This will be a pro-enterprise budget to ensure we protect every one of the 2.81m jobs in Ireland against whatever financial shocks that may arise,” one source said.

Culture, communications, and sport

Despite pushback from the Department of Public Expenditure, it understood that minister Patrick O’Donovan has secured the extension of the basic income for artists.

It is further expected that the scheme, which currently provides grants of €325 to artists enrolled in it, will also be placed on a permanent footing.

Sources told the Irish Examiner that some elements of the budget package were still being “ironed out” last night.

Finance

Usually, the main element of the Department of Finance’s budget focuses on changes to the tax bands and credits. However, this was ruled out last week by Paschal Donohoe.

The Irish Examiner understands that there will be an increase to the cost of a packet of cigarettes as part of Budget 2026.

This will be done in addition to the new tax on vapes, which will come into effect from November 1, that will double the price of a 10ml refill cartridge of e-liquid from €5 to €11.15. A disposable vape will increase from €8 to €9.23.

Agriculture

Martin Heydon was one of the few ministers who settled their budget before the weekend, wrapping up negotiations on Friday.

It is understood that his department’s new TB plan was a “central tenet of this year’s ask”.

The disease has been on a steep increase and affected 6,000 farm families last year.

Health

The health budget is expected to be one of the final ones to be decided, with sources unclear last night what the final outcome will be.

It is understood that health minister Jennifer Carroll MacNeill is pushing for a continuation of service and protection of the existing budget, which has been dogged by over-runs.

At the health committee last week, the minister said that the “focus” will be on ensuring the “expanded health budget delivers for more patients and taxpayers”.

“It’s clear from the purposes of the State that we cannot continue to grow the health budget or any budget at that rate and also maintain security in our public finances,” she said.

“We must make sure that we are getting the value from that investment by the taxpayer in the health system.”

Public expenditure

Much of the focus from a public expenditure standpoint has been on one word: Moderation.

Minister Jack Chambers has made it clear to a number of ministers over recent weeks that they will have to find savings and efficiencies and that an ongoing need for supplementary budgets was not sustainable.

Housing

A cut to the Vat rate in the construction sector was one measure expected to be cleared by the leaders, as was an extension to the living city initiative, which offers tax reliefs against money spent refurbishing or converting residential or commercial properties.

At present, the initiative is restricted to regeneration areas in cities such as Cork, Dublin, Galway, Kilkenny, Limerick, and Waterford. Properties are required to be built before 1915, but the extension would include increasing this after age.

Justice

Funding to allow justice minister Jim O’Callaghan to build up recruitment in An Garda Síochána will be made available, with the minister aiming to get to as many as 1,000 recruits a year.

Mr O’Callaghan has also been given funding for new equipment for gardaí, as well as a ramping up of resources for handling immigration.

Mr O’Callaghan will also receive funding for a nationwide youth diversion programme, as well as for both gender-based violence agency Cuan and for victim support measures.

Further and higher education

A €500 cut to college fees remained on the table as the leaders met late last night, with sources saying that they believed it would be agreed.

Social protection

There will be an increase in the income disregard for the carers’ means test, with sources saying it was unlikely that the test would be abolished outright this year.

In core rates, minister Dara Calleary was “pushing hard” for an increase by €12 a week — but some sources suggested he may have to be content with €10 a week. There is likely to be an extension of the fuel allowance to address concerns on energy pricing. It is expected that there will be the traditional Christmas bonus payments for the State pension and jobseekers’.

Children

It is understood that a push will be made towards bringing down childcare fees, but this year’s budget will focus on those paying the most by bringing down the upper fee cap. Norma Foley will also seek to make increased funding available for disabilities.

Transport, climate change, and energy

An extension of the 9% Vat rate on energy has been agreed, as have new tax exemptions for selling energy back to the grid.

Sources have confirmed that there won’t be any increase in public transport fees, and that there will be further electric vehicle incentives in expanding benefit in kind for businesses.

The State target of 195,000 EVs on the road by end 2025 was exceeded last month.

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