Nowadays the Budget is much less of an event than in the past. By the time the Minister for Finance gets up to speak in the Dáil, his colleagues have already leaked most of it to their pals in the media. So, there are generally few real surprises.
But a class-based analysis of Budget 2026 can expose who has won and who has lost. As we pointed out when this government first took office, it would govern in the interests of the business elites. Budget 2026 confirms this.
Who Wins?
The big winner from the Budget is the hospitality sector. Not the hundreds of thousands of workers who provide the services. No, the winners are the bosses who hoover up the profits. A cut in VAT to 9%, which will come into effect from July of next year, will cost the state an estimated EUR 632 million per year. This is a nice little bung to huge corporate interests like McDonald’s, Supermacs, Starbucks and other hospitality sector giants.
The VAT reduction is a testament to the lobbying power of the hospitality industry. Every news outlet for months on end has had a daily sob story from a restauranteur or publican about how hard it is to make a profit. In a sector where union busting, chronic low pay, long hours, precarity and extreme exploitation are the norm for workers, the media focus is always kept exclusively on the bosses’ complaints.
Who Loses?
Workers is the short answer. An Economic and Social Research Institute (ESRI) analysis shows that most households will lose an average of 2% in disposable income because of this budget. This rises to 4.1% for the lowest income households.
Inflation for August was 2.7%, the highest figure for 18 months. Food prices are surging. Unlike last year, Budget 2026 contains no subsidies for household energy prices. This will, by itself, plunge thousands of households into financial difficulty over the coming winter.
Prices in Ireland are the second highest in the EU. Ireland has the most expensive electricity in the EU. Workers pay through the nose for everything from housing to food to energy. Budget 2026 turns the screw a little tighter.
Substantial wage rises will be needed just to allow workers break even on their income and expenditure. The rise in the minimum wage in Budget 2026 is welcome but still falls short of the living wage.
How to Respond
Trade unions argued strongly against the hospitality VAT reduction. The government is going ahead with it anyway. This is a government dominated by small business owners who are determined to protect the interests of their class. They will ignore trade unions’ pre-budget submissions, polite protests outside the Dáil and strongly worded press statements. Instead, they will continue to quietly do business with private lobbyists who represent viciously anti-worker employers like the hospitality bosses.
With the cost of living rising again and the budget impacting on household incomes, the working class needs to go on the offensive. We need above inflation real pay increases for every worker. It is clear that the private interests who dominate the energy sector are engaged in massive profiteering. Gas and electricity must be brought back into public ownership, under workers’ control, and prices capped.
Budget 2026 sets the pattern for what we can expect in Budget 2027, Budget 2028 etc. More measures that make life difficult for ordinary working people, while filling the pockets of the bosses.
Just as the capitalist class brings to bear their power to force concessions from the government, the trade unions must take action to protect our living standards. This government has never felt the full lash of the workers movement. It is about time they did. Budget 2026 shows why they must.