Metro on track in State €30bn splurge on new infrastructure
It is understood that there will be a sufficient allocation to the Department of Transport for substantial tunnelling to begin on the long-awaited Metro. However, no specific capital spending projects will be outlined until October's Budget.
It had been anticipated that the increase in infrastructure would be €20 billion, but senior sources noted: 'There are unique factors like Apple and the AIB money from the final sale of the bank's shares. It is understood that there will be a sufficient allocation to the Department of Transport for substantial tunnelling to begin on the long-awaited Metro. Pic: MetroLink
'This is a one-off opportunity to make sure when it comes to infrastructure in five years' time that we won't be saying 'sorry you can't come, we've no electricity'.'
With a scaling back of current expenditure and no 'cost-of-living' package in the Budget, the Government is relying on a distribution of infrastructure projects as the central political boost. Spending allocations for key Departments such as Housing, Health, Transport and Education will be decided by the leaders.
Micheál Martin and Simon Harris, along with Finance Ministers Paschal Donohoe and Jack Chambers, met last night to finalise allocations to the three biggest capital spending departments: health, housing and education. Ministers said the final division of the €30billion has not yet been finalised, and how much each department received will not be announced for a few days. Pic: Maxwell's
Ministers said the final division of the €30billion has not yet been finalised, and how much each department received will not be announced for a few days.
'This NDP is going to be about €30 billion of extra expenditure . . . We've announced €20 billion, but we'll also give money to Irish Water and Eirgrid,' said a Cabinet minister.
There is a €22billion capital allocation but according to ministers involved in negotiations, when additional monies from the Apple Tax rebate and the sale of AIB shares are factored in, the NDP allocation will come to €30billion. There will also be funds allocated to the Department of Education for a school-building programme and the Department of Transport for a major road-building programme. Pic: Colin Keegan, Collins Dublin
There will be major announcements of funding for energy, water and other fundamental infrastructure. There will also be funds allocated to the Department of Education for a school-building programme and the Department of Transport for a major road-building programme.
Ministers confirmed the Dublin Metro will go ahead. 'The major spending on the Metro comes later in that project's timeline,' said a Cabinet source, 'so it's not a very contentious matter in Government at all.
'But it's fair to say the Metro affects a number of Cabinet ministers, including Jack Chambers, Paschal Donohoe and Darragh O'Brien, it will run through two of their constituencies and significantly benefit Jack's constituency.' It follows weeks of bilateral meetings and engagements between different Government departments and Minister Chambers's department, as well as a public consultation. Pic: Fran Veale
Ministers stressed that many 'departments aren't settled'. 'There are major outstanding issues in Housing and Health this weekend,' said a source.
'It won't be a list of 10 roads, here's five schools, and all that,' said a Cabinet source, 'you'll see on Tuesday the allocation for each department for the next five years, and then the ministers will do the work on their projects, which will be announced on Budget Day.'
Ministers explained the lack of specifics. 'We won't be able to announce Garda stations, etc, for two reasons,' said a Cabinet source. 'The first reason is a big announcement like that, or series of announcements, would just be kind of lost in the middle of the summer silly season, the public aren't listening. Public Expenditure and Infrastructure Minister Jack Chambers will inform Cabinet colleagues that there is profound uncertainty surrounding global trade, and the threat of tariffs by US President Donald Trump poses a significant risk to the economy. Pic:)
'Secondly, because we're going to be having a big giveaway budget, this will mean capital would be a big part of our budget story. It's a capital budget, announcing money we don't have to spend today or tomorrow.'
Public Expenditure and Infrastructure Minister Jack Chambers will tell Cabinet colleagues there is profound uncertainty around global trade, and the threat of tariffs by US President Donald Trump poses a big risk to the economy.
He will say the best way to safeguard the economy, protect growth, jobs and living standards, and increase competitiveness is to address infrastructure deficits through investment in the key growth-enabling sectors of the economy.
The review, which has been fast-tracked, has a significant focus on scaling up housing delivery by providing big 'once-in-a-generation capital funding into Irish Water, ESB and EirGrid. The key utilities' difficulties in delivering services to new housing developments has been identified as a significant barrier to scaling up housing.
Ministers will also be briefed on work to reform the country's delivery systems so project life cycles can be reduced and better value for money can be achieved. The review of the NDP will allocate over €90 billion over the next five years.
Tuesday's publication will set out departmental capital ceilings to 2030 and overall capital investment to 2035. Government ministers will outline specific programmes and investment they will prioritise in October's Budget.
It follows weeks of bilateral meetings and engagements between different Government departments and Minister Chambers's department, as well as a public consultation. Ministers stressed that the economies of Britain, Germany, France and Italy are already in trouble.
And that is before Trump has even rolled out his trade tariff scheme. Cabinet sources and officials across the Government warned that widespread concerns about a pending global economic downturn are influencing all economic and fiscal decisions in the Government.
Our sister publication, the Irish Mail on Sunday, revealed last week that there will be no cost-of-living payments in the Budget. There are no plans to have double welfare payments or payments to help households.
It is likely there will be targeted social welfare increases and there is already a raising of the ceiling of qualification for winter fuel payments factored into the finances. There were accusations of cynical vote-buying when the Government brought in household supports in last year's Budget.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Extra.ie
3 hours ago
- Extra.ie
Electricity bills set to hike for thousands of Irish homes
Thousands of people are set to see an increase in their electricity bills soon with energy company Flogas hiking its rates. Starting on August 25th, the Irish provider is set to increase its variable electricity charges by around 7%. For a typical Flogas residential electricity customer, the changes will mean an increase of around €10.51 a month, or €126 a year, on their bills. Flogas are increasing their rates on August 25. Pic: Shutterstock The energy company currently has about 43,500 residential electricity customers on variable rates. Flogas Energy Managing Director Sean O'Loughlin stated, 'We will support affected customers through our Customer Service team as much as possible and have a range of options, including payment plans, Budget Plan and pre-payment meters.' The hikes come as the government has confirmed that one-off cost of living measures, bonuses and electricity credits will not be a feature in the upcoming budget. In recent years, the public has come to expect energy credits as part of the government's annual budget announcements. For Budget 2025, two €125 energy credits were issued with one in January and another in November. Previous budgets have included a range of cost-of-living supports such as double payments and bonus lump sums. However, these measures will not be included this year. Minister for Public Expenditure, Jack Chambers, stated that while several one-off payments were made in recent years for certain social welfare schemes, this year will mark a departure from that approach. Public Expenditure Minister Jack Chambers revealed no electricity credits will be in this year's Budget. Pic: Fran Veale Chambers appeared on RTE's News at One to give information on what shouldn't be expected in Budget 2026 and pointed out that the government wants to take decisions that would be 'sustainable with global uncertainty'. According to the Irish Independent, around one in eight domestic electricity customers were behind on their electricity bills earlier this year. Commission for the Regulation of Utilities figures showed that in the three months before April, a total of 286,000 households were in arrears. Pic: Getty Images This is up by 85,734 when compared with the same quarter last year. A total of 175,500 households are behind on gas bills, up around 15,000 on last year. Average arrears on electricity bills is €437, according to the CRU. On gas bills, the average arrears amount is €213. A sobering thought for many as we gallop towards autumn and winter and the colder months ahead.
Irish Independent
11 hours ago
- Irish Independent
Irish pensions will suffer without access to private markets, says Elkstone
Significant pension reforms in the US as well as UK initiatives to funnel funds to growth mean Ireland is now in danger of falling even further behind. Elkstone's Brian Merriman said he is relatively pessimistic of action in the coming Budget but argued long-term thinking is required – including leadership from Government – or future pension provision is going to fall significantly short in Ireland. He was commenting as the Trump administration is expected to sign an order that will allow the 401(k) pension plans used by millions of ordinary American workers access investment in private markets, including private equity, real estate, infrastructure schemes and higher return forms of lending. In Britain, Work and Pensions Secretary Liz Kendall announced this week that she is reviving a pension commission to tackle what she described as a coming 'tsunami of pensioner poverty' after her department found people due to retire from 2050 are on track to be poorer than those retiring today. Brian Merriman said there is now an expectation that returns from Irish pension savings will decline over time, if the current restrictive investing regime remains in place that in effect box most ordinary pensions savers into public investments like equities and bonds. Facilitating access to private markets would allow pension savers to benefit from higher returns, he said. Private market investments – hedge funds, private equity, venture capital investment in start-ups and private companies – have exploded in scale globally since the financial crisis of the late 2000s, while the role of traditional public assets has been in relative decline. Pension rules here have not reflected the shift, Mr Merriman said. Personal Retirement Savings Accounts (PRSA), a popular savings option, restrict investments in assets where fees may be higher or valuations are less transparent. High fees may well be justified where returns are higher, while the net return to investors should be the key consideration, Mr Merriman argues. Private capital investments are less liquid, which comes with less valuation transparency, but are suitable for long-term pension investing, he said. While high returns generally reflect higher risks, Mr Merriman said failing to open pensions to diverse investment opportunities creates its own problems. 'It is riskier not to be investing in private markets,' he said. ADVERTISEMENT A shift to facilitate Irish savers would benefit the domestic economy too, he said. 'The UK is also grappling with this question of do you force people to invest in the UK economy. In Ireland we should at a minimum have it as an opt out, so you'd have to make a decision not to put 5pc or 10pc of your investment into Irish investments.' He cited housing and infrastructure as areas where the Irish economy needs investment and where Irish savers are not active. Pointing to the push happening in the US and UK to funnel pensions into growth opportunities he said Ireland needs to be more agile and should look to get ahead rather than just catch up with other regimes. Elkstone's investments include a string of Irish tech start-ups as well as housing and student housing schemes. It advises wealthy families and individuals on their long-term investments. Opening such schemes to ordinary pensions would allow more people to access higher returns, Mr Merriman said.
The Journal
21 hours ago
- The Journal
Government urged ‘not to delay solemn promise' of VAT cut for hospitality sector
THE GOVERNMENT HAS been urged 'not to delay its promise' of cutting the VAT rate for the hospitality sector to 9% in the upcoming budget. Despite election promises and ministerial pronouncements, government this week has been signalling that a cut to the VAT rate for the hospitality sector may not go ahead in Budget 2026. Tánaiste Simon Harris said the government had made a 'solemn' commitment in the election to reduce the VAT rate for the hospitality sector, but this week the government has been sending mixed signals on how it will proceed. Speaking to RTÉ Radio 1 yesterday, junior justice minister Niall Collins said the VAT cut was not a 'done deal'. VAT for the tourism and hospitality sectors was reduced to 9% during the Covid-19 pandemic at a cost of €1.2bn to the exchequer. The previous 13.5% rate was reinstated last August, despite the sector's opposition. Retail Excellence Ireland (REI), the largest representative body for the retail industry in Ireland, has called on the Government to follow through on its 'promise to permanently cut the rate of VAT for the hospitality industry to 9% in Budget 2026'. Jean McCabe, CEO of REI, said that 'after a tough few years, the Government's solemn promise to cut the VAT rate for the hospitality industry was welcome'. 'It would be regrettable for it to delay its promise now,' she added. 'There are too many livelihoods at stake not to introduce a measure as soon as possible that would have such a significant impact on the industry, and on related industries such as retail.' She said the government must do 'everything in its power to strengthen our domestic economy at a time when we need it most'. McCabe also called for the general rate of VAT be cut from 23% to 21% to assist the retail industry. Advertisement Meanwhile, the Irish Hotels Federation (IHF) has criticised the 'deeply misleading' figure of €1 billion per year that was quoted earlier this week regarding the cost to the Exchequer of reducing VAT for hospitality businesses. On Tuesday, during a press conference on the Summer Economic Statement, Minister for Finance Paschal Donohoe told reporters that the one-year cost for reducing the hospitality VAT rate to 9% for restaurants and hotels would be between €950mn and €1bn. However, later in the press conference, Donohoe said he would need to clarify if that figure did include hotels. A spokesperson for the minister told The Journal today that, based on CSO data, the total one-year cost for restaurants and hotels is actually €810mn. This is split €675mn for restaurants and cafes and €135mn for hotels. The cost for hairdressers would be an additional €40mn. IHF Chief Executive Paul Gallagher said it's time for an 'honest and balanced debate' that 'recognises the economic and social importance of hospitality food service businesses and gives them a fighting chance to survive'. He noted that the 'true cost involved is significantly lower than the widely quoted €1bn figure cited by the Government in recent days' Gallagher added: 'The Government's narrative has had the effect, intended or otherwise, of driving a wedge between the public and the hospitality industry, framing the VAT reduction as a giveaway to businesses. 'This is extremely divisive and simply not true.' He said the 9% VAT reduction sought would apply to prepared food services, such as meals in restaurants, takeaways, commercial kitchens and food served on transport. 'The real beneficiaries are small food businesses,' said Gallagher, 'many of which are operating on the brink of survival due to extreme food cost inflation and shrinking margins. 'Reducing VAT on food services is not a handout to hospitality businesses – it is a vital intervention for a sector that supports over 270,000 livelihoods and contributes significantly to the economy.' Readers like you are keeping these stories free for everyone... A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation. Learn More Support The Journal
