Labour’s mini-Budget would bridge gap as Eurostat reveals Ireland most expensive EU country for energy

Ged Nash

06 May 2026

Labour’s mini-Budget would bridge gap as Eurostat reveals Ireland most expensive EU country for energy - The Labour Party

• 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 to accept Labour’s mini-Budget proposals to be debated tomorrow (May 7th) in the Dáil.

Speaking in Leinster House today, Deputy Nash said:

“Exceptional times call for exceptional measures. Fine Gael and Fianna Fáil have not been found lacking when it comes to throwing out money to sectoral interests. Tomorrow, the Labour Party are giving them the opportunity to do the business for PAYE workers who have been stranded in the midst of the cost of living crisis.

“Eurostat figures today confirm what people are already feeling in their back pockets – Ireland has the highest household electricity prices in the EU. Yet this Government has done nothing to support households from the shocks this is causing in the family finances.

“Tomorrow, the Dáil will debate a Labour Party motion to introduce an emergency mini-Budget to bridge the gap for households, in the five months to Budget 2027. Among the suite of measures in our package are targeted €400 energy credits to aid households who are forking out for the most expensive electricity in the EU.

“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.

“Our package also 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.

“The restoration of the €100 previously cut from the Back to School clothing and footwear allowance and to remove State exam fees is a key component of our plans. 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.

“The cost of living crisis is not a fait accompli. It is a direct result of this Government’s failure to grasp the nettle and take action for PAYE workers rather than leaving them feeling short-changed time and again. It’s clear Government simply does not get the damage the cost-of-living crisis is wreaking across the country. An emergency mini-Budget is needed to get people through the next number of months. Nothing less will do.”

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.