Budget 2026 must be 'sensible and prudent'

RTÉ News​

3 days ago

Business group Ibec has said Budget 2026 must be "sensible and prudent" given the fragile global environment.
Launching its pre-budget submission, it urged the Government to take a "measured and strategic approach".
The group has also called for targeted investment in areas that enhance productivity and competitiveness.
It said sound economic policy must focus on restoring a balance between income and expenditure over the coming years and reduce the over-reliance on volatile tax receipts, such as corporation tax.
Ibec also warned that "persistent or emerging tariffs pose a serious threat to Irish business" and it said the economic model Ireland has relied on for the past 50 years is under serious strain.
It said while the broader economy may remain resilient, "some sectors will suffer significant and lasting damage to competitiveness".
As part of its submission, Ibec said such impacted businesses and their employees must receive targeted support, such as measures on PRSI and trade supports.
Ireland needs to 'make right choices'
Ibec's Chief Economist and Head of National Policy Gerard Brady said the budget must be framed in the context of ongoing trade tensions and recent US tax reforms
Mr Brady said Ireland needs to "make the right choices to safeguard our competitiveness and ability to attract and retain business".
"That means investing in productivity focused areas like infrastructure and committing to continue that investment regardless of the economic climate," he added.
Ibec also said the high cost of doing business here needs to be addressed and it said more needs to be done on skills and innovation.
Mr Brady urged the Government to use funding from the National Training Fund "to make sure that we're investing in skills, particularly at a time where there's significant change in the labuor force due to AI and other new technologies."
Mr Brady said: "Ireland still falls short of where it needs to be as an innovation leader and R&D performer."
In order to assist in attracting investment, he called on the Government to enhance and widen the scope of the R&D tax credit, which he believes would make Ireland "more attractive investment, both for Irish companies and for multinationals".
"Other measures take time to see the benefits for business on things like infrastructure and skills. R&D tax credit would work 1 January," he added.
He said the scheme should be expanded to include process innovation, AI, and green technologies.
"Allow application to offshore related-party research (with safeguards), provided IP and value remain in Ireland."
€3bn budget package proposed
Among the other measures in its submission, Ibec has proposed a budget package of €3bn, including €1.3bn in additional infrastructure spending under the National Development Plan.
And the business group has called on the Government to "maintain a strong, predictable capital investment pipeline".
It said public investment should be "prioritised above all other fiscal commitments."
In relation to tariffs, Ibec's Executive Director of Lobbying and Influence Fergal O'Brien said the group is hoping for a framework agreement.
Mr O'Brien said Budget 2026 is going to be "predominantly about the stress and pressure in our traded economy, and the uncertainty that the potential global trade war continues to have on the economy".
He said the 10% rate, which is currently in effect, is "materially hurting" low margin businesses particularly in the food and drink sectors.
"That 10% hurts, especially when you layer it on top of the dollar weakness of pretty much the same scale that we've seen since the start of the year."
Mr O'Brien said if the threatened 30% tariff did become a reality, "it will be extremely damaging".
He said Ibec members also have "a lot of concerns" about what countermeasures will be introduced by the EU.