Labour Mini-Budget would bridge gap for PAYE workers
Labour Mini-Budget would bridge gap for PAYE workers - The Labour Party
- Dáil to debate measures next Thursday
- Reverse VAT cuts to fund tax indexation
- €100 grocery support via Child Benefit
- Windfall tax on energy profits to pay for energy credits
- Increase bank levy to support small business energy grants
- Pilot free public transport to tackle congestion
- Deploy Apple funds to turbocharge retrofitting
Labour’s finance spokesperson Ged Nash TD has urged government TDs to back Labour’s mini-Budget proposals that would bridge the cost of living gap for households between now and October’s Budget.
Nash said government must honour commitments made before the 2024 General Election and act now to ease cost of living pressures, rather than asking families to wait another five months for relief.
Deputy Nash said:
“There’s too much back-of-the-envelope short-termism from Fianna Fáil and Fine Gael when it comes to dealing with the ever rising cost of living. Labour’s mini-Budget proposals to be debated next week are crafted to provide targeted and sustainable supports for the households who most need some respite between now and October’s Budget.
“These measures would transfer profits from the big energy companies, big tech, the banks and burger barons to the pockets of PAYE workers and the self-employed who are struggling to make ends meet in the teeth of what has all the hallmarks of a permacrisis.
“PAYE and self-employed workers have been left behind during this onslaught, and are seeing real cuts to their disposable income, all thanks to decisions made by Fianna Fáil and Fine Gael in last year’s budget.
“That’s why Labour’s mini Budget proposals are clear: we are calling on government to show leadership and to reverse the ill-thought through VAT reductions due in July, and use the savings to provide for indexation of income tax bands and credits, backdated to January 2026, to put money back into the pockets of working families.
“Grocery prices continue to rise. Just this morning, The Irish Times is reporting that certain branded butter is 65% more expensive in Ballybunion than Berlin. Labour has already proposed stronger powers to tackle excessive pricing through our Competition & Consumer Protection (Excessive Prices) Bill.
“Our package includes a €100 grocery payment to be targeted through the Child Benefit payment to provide relief to families, particularly during the summer months when the Hot School Meals fall away.
“We are also calling for the restoration of the €100 previously cut from the Back to School clothing and footwear allowance and to remove State exam fees. Families are already staring down the barrel of the annual back to school costs, so let’s be proactive now and help families prepare for the tough months ahead.
“This crisis is rooted in a failure to invest in sustainable energy, crucially in Fine Gael and Fianna Fáil’s failure to invest in Ireland’s energy capabilities through renewable energy. Labour’s mini-Budget will introduce a windfall tax on energy profits to fund targeted energy credits and support an additional ‘summer bonus’ social welfare payment in June.
“We would also increase the bank levy to €500m to provide targeted energy grants for small businesses and focused supports to increase the uptake of electric vehicles for households and businesses. If we want to be serious about driving down the cost of business, we need to see real investment, now, in renewable energy.
“This includes deploying the windfall Apple funds to turbocharge retrofitting, deploying solar power and offshore wind and the electrification of heating and transport to drive down the cost of bills.
“Commuters have been particularly impacted by the latest energy crisis and are under serious pressure from high fuel costs. Our package proposes the introduction of pilot trials of free public transport to reduce fuel use. It’s not a silver bullet, but we need to provide options to commuters who are feeling the pinch at the pump.
“Analysis carried out by the ESRI on Budget 2026 is clear. Households lost an average of 2% of disposable income with low-income households hit hardest. Coupled with the illegal war launched by the United States and Israel against Iran, Ireland’s cost of living crisis has seen increased inflation with further price rises still to come on energy, food and other commodities. The government can no longer hide from this fact, and it’s about time they did the business for PAYE workers.
“The Labour Party is proud to be the only Party to come forward with real, meaningful and fiscally responsible proposals to address the crisis that is consuming households across the country. We would urge government to implement these measures and protect the people who need it most, next Thursday.”
ENDS
Motion re: Cost of Living Mini-Budget
That Dáil Éireann –
notes that:
- Budget 2026 failed to provide for indexation of income tax credits and bands, providing instead untargeted VAT cuts for the hospitality and construction sector;
- despite clear evidence of an ongoing cost of living crisis, the government withdrew energy credits and cut pre-election once off payments that in recent years had cloaked the inadequacy of existing social welfare payment rates;
- ESRI analysis of Budget 2026 measures shows that it resulted in household income losses averaging 2% of disposable income, with low-income households hit hardest;
- the illegal war launched by the United States and Israel against Iran has created an energy crisis that has already led to increased inflation, with further price rises still to come on energy, food and other commodities;
- the energy sector is reaping windfall gains, with BP reporting more than a doubling of profits in the first three months of 2026;
- in advance of the Budget last year, Department of Finance officials warned that the hospitality VAT cut was a blunt measure, would be poorly targeted and comes with a significant amount of deadweight; while Bord Bia consumer spending in food services data shows that 60% of the benefit goes to fast food outlets and hotels;
- sectoral fuel supports and cuts to excise duty have been introduced by government that includes changes to the diesel rebate scheme that were backdated to January 2026;
- struggling households will have to wait over five months until October to find out what supports may be introduced to ease the increased cost of living;
- the State has yet to deploy the Apple windfall funds and carries significant cash balances;
recognises that:
- PAYE and self-employed workers have received no targeted support in the cost of living crisis and are now subject to effective cuts in their disposable incomes due to government Budget decisions;
- rising grocery prices continue to impact on household budgets, 14% of households can’t afford to warm their home, and nearly half a million households are in arrears on their energy bills;
- those most at risk of energy poverty and reliant on fossil fuels will continue to be hit hardest by further increases in energy prices;
- Ireland has the highest energy prices in Europe due to an overreliance on natural gas for electricity generation leaving us exposed to geopolitical shocks and international market prices;
- only by rapidly transitioning away from fossil fuels through faster rollout of renewables and electrification of transport and heating can prices be permanently reduced;
calls on the government to immediately introduce a Cost of Living mini-budget that will:
- reverse the VAT reductions and use the savings to provide for indexation of income tax bands and credits, backdated to January 2026;
- introduce a windfall tax on energy profits to fund targeted energy credits and social welfare supports including a summer bonus double payment;
- provide a one off €100 grocery supplement to Child Benefit, restore the €100 previously cut from the Back to School Clothing and Footwear Allowance, and remove State exam fees;
- increase the bank levy to €500m and provided targeted energy grants for small businesses, and tailored supports to increase uptake of EVs for households and businesses;
- introduce pilot trials of free public transport to reduce fuel use and cut school transport fees;
- deploy the windfall Apple funds to turbocharge retrofitting, the installation of solar PV and offshore wind, and the electrification of heating and transport to bring down the cost of bills, and;
- further calls on government to introduce a Budget in October that puts the interests of middle- and low-income households first.
Ged Nash, Ciarán Ahern, Ivana Bacik, Alan Kelly, Eoghan Kenny, George Lawlor, Robert O’Donoghue, Conor Sheehan, Marie Sherlock, Duncan Smith, Mark Wall.