3 days ago
No harmony as Micheál and Simon express differing views on next budget
The Government appears split on spending plans ahead of Budget 2026.
Taoiseach Micheál Martin has said economic forecasts the Government received last weekend were 'sobering' – but Tánaiste Simon Harris told reporters he wanted an 'expansionary' Budget.
A row between the two Government parties over the student contribution charge blew up over the weekend after Higher Education Minister James Lawless appeared to confirm the charge would revert to €3,000 this year once cost-of-living measures ended.
This led Fine Gael to launch an attack on Minister Lawless and say they wanted to continue to reduce the cost of the student contribution charge over the lifetime of this Government. Speaking in Tokyo yesterday, Mr Martin moved to dampen expectations ahead of the October Budget. James Lawless. Pic: Gareth Chaney/Collins Photos
Mr Martin said he had received stark warnings about the state of Ireland's macroeconomic factors, including the potential impact of tariffs from the US. Mr Martin met with Mr Harris, Finance Minister Paschal Donohoe and Minister for Public Expenditure Jack Chambers about Budget 2026 and the National Development Plan over the weekend.
He said: 'It was a sobering enough meeting to be frank in terms of the challenges that lie ahead, given the backdrop of [US] tariffs and uncertainty in trade.' Mr Martin added that another factor of concern related to 'warnings we have received' in relation to 'certain corporation tax revenues.'
'It's challenging, and expenditure has been rising very significantly in Ireland, and that has to be factored into the equation.' However, Mr Harris appeared to have a different approach. Simon Harris. Pic: Stephen Collins/Collins Photos
Asked about Mr Martin's comments, the Tánaiste said: 'Our Budget in Ireland will be expansionary… will have an ability to do more, and we'll be doing more to actually to invest in our economy and our society, to reduce the cost of running the cafe, to reduce the cost of running the restaurant, to reduce the cost of education, because we know the security of our economy depends on investing in the ingenuity of our people.'
Asked how he squared the political circle of global economic headwinds with an expansionary Budget, Mr Harris said they were not contradictory objectives.
'It's all about balance and context. We will continue to put money aside in the funds for the future of our country, both in the Nature and Climate Fund and in the Future Ireland fund.'
He said the Government would run budget surpluses, adding: 'But we will also be working our way through our Programme for Government. I don't think that's a shock.'
He said both Fine Gael and Fianna Fáil had flagged economic headwinds during the general election, adding: 'We're not going to not try to help people where we can, but we're going to do it in a balanced way.' Jack Chambers. Pic: Sam Boal/Collins Photos
Mr Harris also played down a rift over the student contribution charges. He and Jack Chambers warned that the threat of US tariffs has brought uncertainty to the economy which would be taken into account in Budget negotiations.
Controversy over future student contribution fees began last Sunday after Mr Lawless said fees would 'reset' to €3,000 – what they were three years ago. On Monday he said he currently does not have the funds to reduce fees but would 'fight' his case as part of budgetary negotiations.
Asked if there was a rift in Cabinet, Mr Harris said 'certainly there is not'. He said fees would not go up in September as those fees are covered under Budget 2025.
He said most families pay the fee in instalments, in September and the new year, so the second instalment of the upcoming academic year would come under Budget 2026. Minister of State Thomas Byrne said: 'I think we are at one on this.'
