Paschal Donohoe has refused to rule out student fees returning to €3,000 a year in Budget 2026. 

As part of a number of measures to mitigate the impact of the cost of living crisis, the student contribution was cut to €2,000. 

With inflation now under control, Fianna Fáil Higher Education Minister James Lawless has speculated that fees could return to their original rate. 

On The Pat Kenny Show, Minister for Finance Paschal Donohoe described the Government's position as “very clear”, but declined to say how much students should expect to pay for their degrees going forward. 

“We have to move to a more normal budgetary cycle that we’ve been in in every other year, except for the last few years," he said. 

“Where we make decisions on budget day about measures that are going to be permanent, that we’re confident that we can afford. 

“We will engage in that process now; myself and Minister Jack Chambers will be in the middle of it, agree everything within Government and present it then in October.” 

Ministers Jack Chambers and Paschal Donohoe on the steps of Leinster House. Picture by: Alamy.com.

During the pandemic, the VAT rate for the hospitality sector was cut from 9% to 13.5%. 

In 2023, the rate returned to its former level - much to the consternation of the many within the industry.

The Programme for Government acknowledged that restaurants and pubs are suffering from “increased cost pressures” and promised there would be “changes to VAT”. 

However, Minister Donohoe declined to say when such changes would be implemented. 

“It is certainly my intention to respond back from a VAT perspective to the challenges the hospitality sector faces,” he said. 

“But no decisions are made in relation to it and all these decisions are made on budget day. 

“What we have to do is ensure that if we make a decision like that permanently on budget day, that it’s affordable.” 

Outdoor dining in Galway. Picture by: Alamy.com.

Minister Donohoe added that all changes must be “affordable in the round”. 

“And that’s what I’m comfortable we will be able to do,” he said. 

“That we will present a budget that will be responsible, that will be safe and will also explain the different tradeoffs that are there. 

“The final point I would make is [that] the theme of this particular budget is going to be how we support jobs, how we support an enterprise culture here in Ireland.” 

Budget 2026 will likely be presented to the Dáil in October.

Main image: Paschal Donohoe and Jack Chambers. Picture by: Leon Farrell/© RollingNews.ie