Tax and spending package of €9.4bn to form basis of Budget 2026
budget
, the Government said on Tuesday in the Summer Economic Statement (SES).
Still, the Coalition warned it may have to 'recalibrate' its strategy, reducing the size of the overall package, if there is a 'deterioration in the tariff landscape' over the coming months.
Budget 2026 will include additional spending €7.9 billion and tax cuts amounting to €1.5 billion.
The SES, which sets out the spending parameters for the budget, was approved by Cabinet earlier on Tuesday, the same day the Coalition published its revised National Development Strategy.
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Ireland's €156bn tax windfall: Where has it gone?
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The figures come against a backdrop of warnings from the Central Bank and State spending watchdog, the Irish Fiscal Advisory Council (Ifac), about the trajectory of Government spending.
In its latest fiscal assessment report, Ifac said in June that current spending grew at a rate of 5.9 per cent during the first five months of this year amid higher-than-expected spending on education, health and justice when the Government forecasts are for a full-year increase of 1.4 per cent.
The Central Bank, meanwhile, has repeatedly told the Coalition that it must strengthen Ireland's fiscal position in preparation for what could be a permanent hit to economic output stemming from shifting US trade policies.
In his pre-budget letter to Minister for Finance Paschal Donohoe, Central Bank governor Gabriel Makhlouf warned last month that public spending will need to increased by around €265 billion over the next 25 years to pay for an ageing population, more housing and cutting emissions.
Amid what he described as 'heightened uncertainty' around the global economy, Mr Makhlouf urged the Government to broaden the tax base, amid concerns about how reliant the exchequer is on a small number of companies and individuals to pay maintain its tax revenue.
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