The Dáil returns after recent weeks dominated by presidential candidacies, with the Budget now on the horizon  - Minister for Finance Paschal Donohoe joined The Pat Kenny Show to discuss. 

The Central Bank warned overnight that the government will need more taxation in place if they want to carry out their current planned expenditure.

“I take on board very much what the Central Bank are proposing, and their need for care regarding our public finances," Minister Donohoe said.

"I believe I have demonstrated that in recent years by the scale of the budget surplus that we are running, and as we move into the next year, there will be a number of moves that are taking place - that will lead to a broader tax base within our country."

Budget 2026

 The Minister was keen to highlight three particular areas of focus for the Government.

“Firstly, we will be making further changes with regard to carbon taxation. Secondly, the rate of PRSI within our economy will be going up, to help fund our auto-involvement system and better pensions in the future.

"Finally, the tax package that we will be bringing forward, is created by the kind of income growth that we are seeing taking place within our economy”.

Minister Donohoe says his department forecasts the country’s economy to grow again in 2026.

“If we look at the rate of growth this year so far, we have seen a rate of growth just above 3% within our own domestic economy and for that reason it gives me confidence that a rate of economic growth that is driven by having 2.8 million people at work will continue into next year."

So what would be the position of particular areas of public expenditure - such as social welfare - if the economy was to fall short?

“Indeed, we deal with [the issue] in two ways, by running budget surpluses, if we ever got to a point where our tax revenue came down sharply, the first line of absorption is a budget surplus.

"We already have by the end of this year, between 13-15 billion euros set aside in a fund to help us deal with that risk in the future.”

The topic of social welfare payments engaged one listener, who described that her situation was that she was earning less money working full time on 40 hours a week than someone who was working part time, on 19 hours a week.

“The challenge is that if we were to remove social welfare payments for those that need it, in part-time employment - they could actually end up worse off, in a time where we want them to get back to part time work and then full time work.

“For the vast majority of workers within our economy, though I accept not all, because of the way our tax code is structured - it does pay to be in work, and it does in turn help with your ability to own a home, pay your rent and so on."

Universal payments

The Government has come in for criticism in some quarters for fewer universal payments likely to be forthcoming in the autumn announcement.

“I would just ask your listeners to be aware of all the risks that are taking place around us at the moment, we face a choice.

"Do we want to spend the money that is available to us in building more homes, investing in our future, investing in our water, investing to save our energy in the future - or do we want to repeat one-off measures?” he says,

“I will be making the argument that we need to prioritise investment now - prioritising spending on things such as schools, education - to give us a better chance of trying to keep Ireland safe in the years ahead."

Student accommodation

The Minister was questioned on the ongoing problem of student accommodation, with both a shortfall in rooms and the price thereof being a focus of ire.

“We have projects underway now in many different universities to deliver more student accommodation.

“We have to move to measures that are capable of making a more permanent and a more sustainable difference to the cost of going to college."

Despite this commitment to building additional accommodation, the question was raised if these proposed lodgings would be of lower standard to comply with budgetary needs.

“What we are trying to do is to have somewhere that will have more uniform standards”, Mr Donohoe said.