Summer Economic Statement 2025 – What it means for you

Strong tax receipts set the pace for Budget 2026

The Government’s Summer Economic Statement (SES) lays the groundwork for a €9.4 billion Budget 2026 package. It builds on strong tax revenues and a stable economic backdrop, while acknowledging that global uncertainty may temper future surpluses. It is important to be aware that this package was drafted before the 15% EU-US trade deal was reached, on the basis of the baseline rate of 10%. Following the agreement, we would expect that the package may be adjusted downward to reflect this. 

The message is clear: Ireland’s economic strategy is holding steady. But there’s also a shift — a growing focus on resilience, long-term investment and delivering impact where it matters most.

We welcome this direction. Our pre-Budget submission called for sustainable growth and responsible fiscal planning. The SES reflects that thinking — balancing support for households and businesses with a clear-eyed view of structural risks.

Budget 2026: A chance to reset and refocus 

As the first budget of a new political cycle, Budget 2026 provides an opportunity to consolidate recent progress and refocus attention on strategic investment. The SES outlines €116.6bn in total gross voted expenditure of €116.6bn, with increased allocations for key public services such as housing and education and signals a continued ambition to support a resilient and sustainable economy.

Core spending will rise to meet demographic pressures. But the Government is mindful of the need to future-proof — investing in what lasts, not just what’s urgent.

Housing: Unlocking supply, not just managing demand  

The SES highlights housing as the most important priority for strategic investment, with anticipated changes set to impact the sector. The Government's planned review of the Residential Zoned Land Tax (RZLT), an incentive that aims to optimise land use and stimulate housing development, continues to remain under consideration. Any changes will be considered as part of the Finance Bill cycle. Recent adjustments to the Rent Pressure Zones (RPZ) regulations are designed to manage rent increases, yet the focus on attracting greater investment to boost housing supply is equally crucial.

As demand continues to outpace supply, a balanced approach that encourages both protection for renters and incentives for developers will be essential. This dual focus is needed to ensure Ireland's housing market can meet current challenges while fostering long-term growth and affordability.

Public services and healthcare

The SES confirms that public services, particularly healthcare, will continue to receive increased support through a €5.9 billion increase in current expenditure. As demand grows, funding stability is essential. Continued investment in health outcomes, workforce capacity, and service efficiency will be important for sustaining improvements over time.

We acknowledge the complexity of healthcare reform and recognises that modernisation efforts will take time. Ongoing investment in innovation and digital transformation in the sector may help alleviate future cost pressures, though the government has signalled the need to proceed cautiously.

Tax revenues and resilience

Ireland’s tax receipts remain robust, up 10.5% year-on-year to €49.5 billion in the first half of 2025. But the SES is clear: these gains are vulnerable to global shifts. 

The SES reflects an awareness of this dynamic and includes measures to ensure windfall revenues are not used to fund permanent expenditure. Minister Donohoe has emphasised the importance of avoiding decisions that could create future fiscal risks.

We welcome the commitment to financial resilience, including continued contributions to sovereign funds. These steps support long-term fiscal stability and provide a cushion against future challenges.

Capital investment and growth potential

The SES reinforces the importance of capital investment in transport, education, and energy infrastructure as core components of Ireland's growth strategy. 

• By prioritising transport, the focus is on improving public transit networks and road infrastructure to enhance connectivity and economic efficiency. 

• In education, investments aim to upgrade facilities and expand access to cutting-edge training, preparing Ireland's workforce for future challenges. 

• Energy infrastructure initiatives support Ireland's commitment to a carbon neutral economy, promoting renewable energy and sustainable practices. 

These priorities align with our call to elevate Ireland’s productive capacity, addressing key bottlenecks and positioning the country for long-term growth and competitiveness.  

Supporting business and innovation

While the SES focuses predominantly on expenditure frameworks, the broader context for Budget 2026 offers scope to introduce further support for entrepreneurship and innovation. 

Targeted tax measures that improve access to funding and encourage scaling would complement investment in infrastructure and skills.

We continue to advocate for policies that help Irish businesses grow sustainably, compete globally, and invest in the digital and green economy. This focus is of increased importance as we enter an era of unchartered territory with increased tariffs now in place for Irish exports to the US.

Looking ahead

The SES presents a considered and measured outline of the Government’s approach to Budget 2026. With a favourable fiscal position, the Statement reflects efforts to balance immediate needs with long-term planning.

As always, the challenge will be to convert this potential into outcomes that deliver value for citizens and the economy. A strong focus on prioritisation, efficiency, and impact will support continued progress on Ireland’s path to sustainable growth. The government has reiterated its commitment to permanent supports over one-off measures.

We are here to help you

Keep in touch with us for further updates from our Tax Policy team. With Budget Day scheduled for 7 October 2025, we will be sharing insights in the coming weeks, including a pre-Budget webcast on 10 September which will provide an overview of the key measures we expect to see in this Government’s first budget. We will also be there on the day to analyse Budget 2026, seeing what it delivers and where opportunities are missed.