Speech
Statement by Minister Donohoe on Budget 2025
From Department of Public Expenditure, NDP Delivery and Reform
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From Department of Public Expenditure, NDP Delivery and Reform
Published on
Last updated on
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Ceann Comhairle, today’s Budget sets out a positive path for the future while striving to meet the needs of today. It is a Budget for an Ireland with a growing population, full employment, public finances in surplus and public services expanding to meet our country’s needs. This positive position is the result of a balanced and planned approach to stewarding our economy and the hard work of the Irish people.
Before we look to the future, I want to take a moment to reflect on the last four years. A series of shocks from beyond our shores guided many of the measures taken in the Budgets I have had the privilege of delivering since the election of this Dáil.
Since 2020, we have faced unprecedented challenges and risks of economic instability. These challenges: a pandemic, war in Europe, and spiralling inflation were external in origin, but caused real impacts here at home, which we dealt with due to the careful management of the public finances.
Before I announce the measures in Budget 2025, allow me to take a moment to highlight some of the lasting improvements we have delivered, despite all of these challenges.
Our investment has resulted in:
Minister Chambers and I appreciate the challenges confronting so many of our citizens. We recognise the many difficulties that clearly exist. But we make the case that Budget 2025 will make a difference to these difficulties, just as previous budgets have.
Our strategy during this Dáil was to grow and improve public services by increasing spending by five percent each year. Given the nature of the particular challenges we faced, including inflation and the pandemic, the five percent anchor was simply not appropriate to cover the growth and expansion of services our country needed.
Instead, our Government provided a robust response to these challenges to ensure:
Our strategy was the right one. We made essential adjustments to it, depending on the particular set of challenges we were facing. Not to do so would have meant not being able to protect and provide for our people during times of great need.
I am sometimes asked why we don’t spend more of our Budget surpluses. During the pandemic, to keep people safe, we had to ask people not to go to work. Hundreds of thousands of people became unemployed and this Government spent billions of euro supporting them and businesses through that difficult time.
Just as we were getting back on our feet, the cost of living crisis hit and we were in a position to help once more as prices went up. That is the reason to run Budget surpluses – it allows for flexibility and gives us a far better chance of being able to deal with the risks that we do not see coming.
Every budget process is a balancing act – we are tasked with making difficult decisions and our choices have a real impact. I am confident that our decisions, such as investing surpluses into the Future Ireland Fund and the Infrastructure Climate and Nature Fund, will greatly benefit our nation in the decades ahead.
Indeed, our public finances continue to show strength and resilience and Budget 2025 will build on the progress made in this Government’s previous four budgets. As set out in the Summer Economic Statement, Budget 2025 sees expenditure of one hundred and five point four billion euro, an increase of six point nine percent on last year.
Ceann Comhairle, turning now to this Budget’s specific expenditure measures, we are all aware that many of us are still feeling the impact of the external factors that I mentioned earlier. Although inflation has come down, prices have been slow to follow, and cost of living increases of over nineteen percent between January 2021 and August this year, have left many in Ireland worrying about their finances.
While we have successfully insulated the lowest earning households from the worst effects of the price increases, this Government is still conscious that prices remain high. We are committed to protecting the most vulnerable in our society, through a series of supports.
Budget 2025 will include an energy credit of two hundred and fifty euro for all households. This will be paid in two equal payments, one before the end of the year and one after. A further three hundred euro lump sum payment will be made to recipients of the Fuel Allowance in November 2024.
An additional two hundred euro will be paid to recipients of the Living Alone Allowance. There will be a four hundred euro payment to those who receive the Carer’s Support Grant, Disability Allowance, Blind Pension, Invalidity Pension and Domiciliary Care Allowance in November 2024.
To support parents and students, funding will continue for the School Transport fee reduction and for the State Exam Fee waiver.
I am also providing for:
I am also providing additional funding to support students at a time of increased strain from cost of living through the Student Assistance Fund.
In addition to these temporary measures, I am pleased to announce a Social Protection package for 2025 worth almost one point two billion euro targeted to those with the greatest need.
This includes:
Further support to those with a disability and carers. I am:
To further support families and children, I am:
I am also pleased to announce a further one billion euro for a range of cost of living supports, including an October bonus double payment for recipients of long-term Social Proection payments. Nearly one point four million people will benefit, including pensioners, people with disabilities, carers, lone parents and the long-term unemployed.
Ceann Comhairle, this Government’s ambition is for Ireland to be one of the best countries in the world in which to be a child.
This Government has made eradicating child poverty an absolute priority and in the last five years, there has been a complete overhaul of supports available to parents.
Under this Government, investment in early learning and childcare has increased ninety-five percent, from five hundred and sixty-seven million euro in 2019 to one point one billion euro in 2024. Free GP care has also been made available to all children under eight.
To provide further support to families raising children, two double payments of Child Benefit will be made to all qualifying households in November and December. There will also be a double payment of the Foster Care Allowance.
To ensure that our supports are targeted to the families that need them most, a four hundred euro lump sum payment will be made to recipients of the Working Family Payment later this year. This Budget also provides a lump sum payment of one hundred euro per child to recipients of Qualified Child Increase payments.
When we talk about the future of Ireland, we are not just talking about infrastructure or the economy – we are talking about the young people who will go on to lead and look after our society and our country.
Today, I am allocating eight point three billion euro to the Department of Children, Equality, Disability, Integration and Youth, with investment in early learning and childcare increasing to nearly one point four billion euro.
Funding for the National Childcare Scheme will increase by a further forty-four percent. This investment will mean that next year parents will see full-time childcare costs reduce even further by an additional eleven-hundred euro. In addition, the number of children availing of the NCS is set to increase to two-hundred and sixteen thousand in 2025.
A three-hundred and thirty-six-million-euro increase is being provided for Disability Services, which will facilitate additional residential care beds, more respite provision, additional home support hours and a day service place for school leavers.
Increasing the Tusla budget to one point two billion euro will provide more residential placements, increased therapeutic services, and increased payments for foster carers for initial placements.
At the core of creating a brighter future for our young people and our country is education. Developing a dynamic, inclusive and affordable education system allows us to build the Ireland of tomorrow.
In education, a capital allocation of one point three billion euro will support three hundred and fifty building projects currently underway as well as a further two hundred new school projects.
Budget 2025 provides funding for seven hundred and sixty-eight additional special education teachers and one thousand six hundred more Special Needs Assistants.
Building on the success of the ‘Keeping Childhood Smartphone Free’ initiative, 2025 will see the rollout of supports to allow post primary schools to do just that throughout the school day. This policy will support the wellbeing of our children and provide them with the best possible environment for learning.
This Budget will see a substantial increase in funding for the School Transport Scheme in recognition of its importance in providing access to education for children living remote from their nearest school.
Ceann Comhairle, reducing the cost of education is a priority for this Government. Today, I am providing funding to extend the Free Schoolbooks initiative to all transition and senior cycle pupils in recognised post-primary schools within the free education scheme.
Education is one component in ensuring a thriving population, as is feeling supported in times of ill health.
In July, I reached an important agreement with the Department of Health and the HSE to provide additional funding of two point seven billion euro for the Health sector over two years. This plan provides a stable funding base, bringing the total Health allocation to twenty-five point seven six billion euro.
We agreed that this additional funding must support better financial planning and governance, demonstrating a clear link between this significant level of public funding and improved health outcomes.
Our health service workers are central to delivering positive results for patients. In 2025, the numbers working in our health service, not including disability services, will reach over one hundred and thirty thousand whole-time equivalents, an increase of twenty-seven percent since 2019.
Budget 2025 includes funding for a range of new measures that will increase access, affordability and capacity in our health service, including;
This Budget includes funding to facilitate the continued development and enhancement of mental health services, as set out in the National Mental Health Strategy, ‘Sharing the Vision’. Implementing the recommendations of the Strategy is a key commitment in the Programme for Government and a priority for the Department of Health and the HSE.
Funding provided in Budget 2025 will enable enhanced provision of services including:
This Budget ensures that the health service is well funded and able to deliver better access and better outcomes into the future.
Today, governments around the world are encountering new and varied challenges linked to climate change, public health, geopolitical security and more.
Ceann Comhairle, we want to provide the necessary infrastructure and growth in services to ensure that they deliver for all our citizens, whether they were born here or chose to make their home here. This is an absolute priority for this Government – to support the delivery of the right infrastructure in the right place at the right time.
Ceann Comhairle, I would now like to briefly address the funding arising from the recent decision of the Court of Justice of the European Union. These funds are estimated to have a current value of fourteen point one billion euro.
Clearly this is a very significant amount of money. But we should also recognise that this amount is one-off in nature and that it is equal to the sum that we are already planning to invest through the National Development Plan next year alone.
It is vital, therefore, that we maximise the potential of these funds, delivering the best possible outcome for the longer term.
Government has agreed the principle that these funds should be invested to expand our infrastructure for the future development of our society. Specifically, water, electricity, transport, and housing have been identified as four strategic investment pillars. Investing in these areas will support the needs of our people, assist in growing our economy, and help in meeting our climate and nature goals.
Officials from my department and the Department of Finance will now begin work on developing an investment framework for the use of these funds, ensuring co-ordination with existing investments being made through the National Development Plan.
Through the record investment provided under the National Development Plan, this Government is increasing infrastructure delivery, while also ensuring value for money. We are investing sums well above the EU average through the NDP.
A significant number of capital projects have already been delivered including five hundred kilometres of new walking infrastructure, one hundred and seventy kilometres of new roads, and the expansion of rural public transport through Local Link services.
Today, I am providing an additional one point seven billion euro in 2025 for more homes, schools and hospital infrastructure, and to tackle climate change. This will include an investment of four hundred million euro in the National Broadband Plan. Total capital investment in 2025 will be close to fifteen billion euro, the highest annual spend we have ever seen in this country.
As we focus on infrastructure and the growing needs of our population, the most fundamental of these is having a home in which to live.
In Budget 2025, I am providing over seven point eight billion euro to the Department of Housing, Local Government and Heritage including:
An unprecedented one point six five billion euro in current funding will continue to support sixty-six thousand households in active social housing tenancies and will provide for
I am also allocating ninety million euro to retrofit approximately two thousand five hundred social homes in 2025, demonstrating the State’s commitment to help people reduce their energy bills and to ensure Ireland meets our climate targets.
The Infrastructure, Climate and Nature Fund is one of two funds established this year to manage windfall tax receipts and to prepare for the future. The ICNF has two roles:
More than three billion euro is being set aside for this second role between 2026 and 2030.
We will shortly set out how this money will be invested to provide a clear and consistent signal to the market. The allocation process will be subject to engagement between myself and other relevant Ministers.
The fund will be used to support designated environmental projects that can assist with:
In practice this will mean supporting projects that help Ireland to meet its climate and environmental obligations and ambitions, including climate neutrality. This will improve the lives of the people of Ireland.
Further details on the plans for our proposed approach are set out in the Budget documentation published by my Department today.
It was very positive to record a six point eight percent reduction in Ireland’s greenhouse gas emissions last year. As we continue to invest in tackling climate change we will see further benefits including warmer homes, less congestion in towns and cities, enhanced biodiversity and cleaner air and water.
In support of these goals, capital funding for the Department of Environment, Climate and Communications has been increased to over one point one four billion euro, allowing for record allocations to be made for investment in energy efficiency and renewable energy.
‘Warmer Homes’ funding will reach record levels, likely to reach more than ten times the funding provided in 2020, increasing the number of households benefiting and providing for deeper retrofits.
Funding will support up to half of the cost of energy efficiency upgrades being met by the State, complemented by State supported loans.
To support our farmers in becoming more environmentally sustainable, over seven hundred and sixteen million euro is being provided in 2025 for those participating in agri-environmental schemes such as ACRES.
Applying a Carbon Tax remains an integral part of our climate action response as a Government. The Carbon Tax will increase by seven euro and fifty cents per tonne as part of Budget 2025, bringing the total Carbon Tax revenue available for investment to nine hundred and fifty-one million euro. Half of this amount will be invested in improving the energy efficiency of our homes; an additional eighty-nine million euro compared to 2024.
In addition, the Carbon Tax will fund three hundred and six million euro of Social Protection spending in 2025. An additional forty-four million euro for targeted measures, namely, increases to the Qualified Child Payment, and to the income eligibility threshold for the Working Family Payment, ensuring that the most vulnerable are protected from unintended impacts of the tax increase.
As we seek to identify ways to reduce our carbon footprint, one of our clearest avenues is our transport system.
A strong transport infrastructure is necessary for connectivity and for our climate ambitions. A connected Ireland is a forward-facing Ireland.
Today , I am announcing three point nine billion euro for the Department of Transport, with over one billion euro in current funding and two point nine billion euro in capital funding.
This funding will enable:
Additionally, I am pleased to announce that a financing agreement has been reached between the Port of Cork and the Ireland Strategic Investment Fund to extend the Port’s quay-side berth at Ringaskiddy.
The agreement, a ninety-nine-million-euro financing package, will allow the Port of Cork to develop multi-purpose infrastructure capable of meeting the requirements of the offshore renewable energy sector. The agreement marks a significant milestone in our ongoing commitment to deliver a greener, more sustainable future.
A key driver of that greener future will be our agri-food sector; a driving force that supports communities across the country.
Today, I am allocating over two billion euro for the Department of Agriculture, Food and the Marine for 2025. This demonstrates the broad support that will be provided across the sectors, ensuring we support farmers, fishers and foresters.
The agri-food sector is a core part of our rural communities and our largest indigenous industry. Budget 2025 will support an innovative and sustainable sector that enriches our biodiversity, protects our landscapes and supports our economy.
This Budget will also provide additional funding for a range of supports across sectors, including:
Some one hundred and forty-three million euro of Carbon Tax funding will be provided to the Department of Agriculture, Food and the Marine next year. This funding will continue to support farmers as they work to improve biodiversity, climate, air and water quality outcomes.
The Department of Agriculture, Food and the Marine will also administer over one point two billion euro of EU funding in direct payments to farmers.
Ceann Comhairle, this Government believes that the development of sustainable communities is necessary to drive enterprise growth, increase remote working capability, and support our people to grow and flourish.
I am providing four hundred and seventy-two million for the Department of Rural and Community Development. This will help deliver key commitments set out in ‘Our Rural Future’ and the National Development Plan, and will promote social inclusion in both urban and rural areas.
The Department of Rural and Community Development will have total capital funding of two hundred and thirty-five million euro in 2025 to support the revitalisation of rural Ireland through schemes including the Rural Regeneration and Development Fund, the LEADER Programme, Town and Village Renewal, the Outdoor Recreation Infrastructure Scheme and the CLÁR Programme.
Ceann Comhairle, our ability to fund these schemes depends on a growing economy. The enterprise sector lays the foundations for economic growth, future wellbeing and prosperity.
In saying this, we also must recognise the difficulties that businesses have been facing. To support them we are investing:
Recognising that rising energy costs have impacts for hospitality and retail businesses, I am today announcing an Energy Subsidy Scheme for these businesses worth one hundred and seventy million euro. This will provide a support to approximately thirty-nine thousand firms.
Budget 2025 provides for over four point five billion euro for the Department of Further and Higher Education, Research, Innovation and Science. This is a demonstration of our commitment to investing for our future.
In my Budget speech last year, I spoke about the role of the National Training Fund in providing vital funding for skills and lifelong learning and committed to further work on this opportunity.
The NTF is in surplus due to the growth in the numbers at work and increased employers’ PRSI receipts.
Today, I am announcing an almost one point five-billion-euro package over a six-year period to 2030, comprising both current and capital investment to better fund research, further and higher education, skills and development and decarbonisation.
This multiannual commitment will include an increase in core funding to Higher Education by one hundred and fifty million euro per annum. The main focus of this will be on meeting the funding requirements of our universities, as set out in the ‘Funding the Future’ framework.
This funding will include support for:
Funding for further education will support:
This Government is committed to building stronger, safer communities, and, with this in mind, I am announcing a package of over three point nine billion euro for the Justice sector. The record allocation available in 2025 will allow for:
We are working to maintain a safe and secure Ireland and to support where we can overseas.
Crucial to this goal is the work of the Defence Forces and today I am announcing an allocation of one point three five billion euro for 2025.
A twenty-two percent increase in capital investment to a record allocation of two hundred and fifteen million euro will enable the advancement of major Defence equipment and infrastructural upgrades, such as Military Radar and Subsea surveillance projects.
In recognition of the significant transformation and reform underway in the sector, today’s allocation will provide for:
This budgetary increase builds on investment in recent years and underlines this Government’s commitment to the transformation of the Defence Forces through the implementation of the Commission on the Defence Forces, and Independent Review Group’s recommendations.
Ceann Comhairle, I believe that Ireland holds a unique position in the world, where our culture, ár dteanga and our artists are the beating heart of our society. There are record numbers visiting our national cultural institutions. Irish writers are some of the best in the world – giving us pause to reflect on the world around us, to make sense of it or, indeed, to escape it entirely for a moment.
In 2025, I am allocating:
Ceann Comhairle, our country can be proud of our tradition as a champion for peace and prosperity across the globe. We are privileged to live in a country with robust and fair democratic systems, high levels of trust in our public institutions, and a strong economy.
This privilege brings with it the ability to invest in peace and development on our own island, our continent and across the world. Our Government continues our commitment across a number of areas.
We will continue to support the Shared Island initiative engaging with communities to build consensus around a shared future and delivering benefits for the whole island. Support will be delivered by:
The Taoiseach and the UK Prime Minister have committed to resetting relations between Ireland and the UK. We will allocate resources to support this important work.
Being a member of the European Union has been transformative for our country – it has given us a powerful global voice on the world stage. EU funds have contributed to infrastructure improvements and have been invested in our people’s future through education and training to improve our people’s lives.
Today, I am providing significant additional resources in 2025 to the Department of Foreign Affairs to commence the preparations for the important policy work that will take place during Ireland’s Presidency of the Council of the European Union in 2026. I am also providing an additional thirty-five million euro to support the Global Ireland strategy.
Next year will see the highest ever allocation to Overseas Development Assistance, when funding for international co-operation in the Department of Foreign Affairs will increase by thirty-five million euro to reach over eight hundred and ten million euro.
Investing in development programmes abroad that protect nature, respond to climate change, and provide humanitarian assistance, aligns with the approach we also take at home in helping those who come to our country as result of war, poverty and other global challenges.
Part of our international role is to welcome those coming to Ireland who need our help. Two point one billion euro is being provided to support accommodation for those fleeing Russia’s illegal war in Ukraine and to those seeking International Protection.
In addition to the core funding for rural and community development for 2025, I am providing thirteen million euro to help integrate arrivals from Ukraine into local communities. This will enable the Social Inclusion and Community Activation Programme workers to continue to support new arrivals and those already in our communities. I am also providing an additional twenty-five million euro to the Community Recognition Fund, which supports communities welcoming those in need.
Ceann Comhairle, this Government knows that public expenditure management does not exist in a vacuum. It is important that we recognise and measure the impact of the decisions that we make beyond just their monetary cost. For that reason, my department uses performance-, equality-, green-, and well-being budgeting as a key component of the spending review process so that we can measure and judge the full cost of decisions being made across Government.
Ceann Comhairle, we live in a volatile world – a world in which the pace of change is accelerating and the level of complexity is building, but the scale of opportunity is growing.
This is why we must run budget surpluses. This is why we must set aside some of our country’s money for the future. This is why we must invest our recent gains in the Ireland of tomorrow. Not spending everything today, no matter how tempting.
In my many years serving as a Finance Minister for our country I have led our finances from deficit to surplus. Twice. These healthy public finances have allowed our country:
all while dealing with the crises of a pandemic, a war in Europe and then soaring inflation.
The politics and economics of the centre, of a steady approach to the many and competing demands, of embracing the opportunities and responsibilities of our role in the world, of supporting growth and jobs – under this Government, that approach has worked.
Let me be clear, making the case for progress is not the same as denying the reality of the many pressing problems that I know exist.
The Government appreciates the urgency of the challenges of today. We are working to meet them head-on.
But, with optimism and with hope, I say to the Dáil, look at what our country has achieved in recent years, look at what we have overcome. Look at what we can yet do. Look at what is yet to come.
Our recent Budgets, and the choices that Minister Chambers and I are presenting today, have and will play an essential role in this. In lessening our problems. In pursuing the great opportunities that await. In building a better Ireland with a brighter future for all.
That is why I commend Budget 2025 to Dáil Éireann.
ENDS