Budget to focus on capital projects over more cost-of-living packages

Chambers criticises 'absurdities' of environmental objections at Navan business breakfast

Moderating current expenditure in favour of more capital infrastructure investment, and a need for major reform of the State systems to create better efficiencies was the theme of a wide-ranging business breakfast speech by the Minister for Public Expenditure, Infrastructure, Public Services, Reform and Digitialisation, Jack Chambers, in Navan last week.

Chambers was taking part in the annual Fianna Fáil pre-Budget event, in which he said that as the first budget in a five year term, it is a critical moment for the Government, all too aware of the difficult choices to be made between “maintaining a strong fiscal stance to protect Ireland for the future on the one hand, and also to deliver the ambitious and positive proposals to improve the quality of life for our people which exist across government”.

“That’s a tight line to walk and the stakes are higher than ever, against a really uncertain global backdrop,” he continued.

“But despite all the turbulence and state of flux across the international trading landscape, Ireland approaches this budget at a position of real economic strength, and sensible management of the economy has resulted in a level of employment now exceeding 2.8 million people, with nearly half a million more people working in Ireland since 2019, an extraordinary statistic of employment resilience in our economy, compared to most European countries.”

The minister stated that modified domestic demand – the best barometer to the health of any economy - increased by two per cent in the first quarter of this year and despite tariffs, continued growth is forecast this year and next.

“But there is a need to diversify our economy with a better support for indigenous and become less reliant on just a few revenue streams,” he pointed out.

“And there is also a need to moderate current expenditure as we move out of a series of crises which forced us to provide interventions – necessary interventions – over time,” he added.

Budget 2026 will comprise of a package of €9.4 million with public spending amounting to €7.9 billion and taxation measures of €1.5 billion, the minister stated.

“What we are trying to do is to create the space to really invest in capital infrastructure, but to do that you cannot continue the rate of growth on current spending. We have increased overall current expenditure by 45 per cent in the last five years. That is not sustainable for the next five years.

“We cannot continue to provide an additional level of spending above what we have set out in the fiscal parameters, for cost-of-living packages which would provide a wider economic risk if they continue to roll every year. That’s why capital investment and investment for the future is a priority.”

Minister Dara Callery will utilise the social protection system to safeguard vulnerable families and workers against the challenges of the cost of living, he added.

Housing is the single biggest issue we must advance in this budget and in all policy proposals. A national housing plan will be published in the next number of weeks by Minister James Browne, with more than one in every three euro of allocated capital funding for 2026 to 2030 going directly to housing.

Transport is also a priority, with a fully funded the roads programme for the rest of the decade, but also the critical public transport infrastructure needed to advance our economy.

“We recently published a national development plan which sets out a 10-year trajectory of investment - €275 million over the next 10 years, to drive generational change in critical infrastructure, for our economy, to house our workers, for power, energy and water systems, and to build our roads and public transport we need to support a growing and changing population.

“A pro-enterprise approach will be more central to this budget than ever before, to promote and support SMEs, enhance our domestic and international competitiveness, and position Ireland to really harness the AI and digital revolution which is changing so quickly,” Minister Chambers added.

“We have been listening to businesses and are committed to reducing costs and simplifying regulation and taxation, and rebalancing regulation in our economy.”

He said the time it now takes to deliver a project in waste water, transport, or in the energy system is twice the time that it took during the 2000s, “an unacceptable delay which harms Ireland, restricts growth and shows why there is a need for wider systemic reform, or practices, of procedures, and of the processes within the State which are no longer fit for purpose”.

And Minister Chambers was critical of those taking cases designed to delay or prevent essential projects.

“It is worth considering for example the absurdities of many of the environmental objections in housing, renewable energy and public transport, and some of the advocates in those areas, who seek to block the very road that busses will travel down or the layers of regulations which delay projects to the point where constructing significant infrastructure is considered almost impossible in this country.”

Chambers quoted from Barack Obama’s inauguration speech as US president: ‘The question we ask today is not whether our government is too big or too small, but whether it works as it should for the benefit of society.’

“We are trying to get away from the classic budget position every year where everyone is asking ‘what do I get?’ or ‘who got what?’, and we get every different interest group asking how it affects them. Ultimately reform is about making sure we take the systems that operate and mandate them to be better for people, creating the conditions to power our economy and employ more people, ensuring sustained growth and supporting a modern, innovative, digitalised economy, ready for the opportunities and challenges of the next decade and beyond.”