Taoiseach Micheál Martin has defended Budget 2026 from Opposition criticism, saying it was "not sustainable" to continue to give one-off measures, like electricity credits.
He maintained that the VAT reduction for the hospitality sector will prove to be a "significant fillip", particularly for restaurants and cafes in rural areas where businesses is often seasonal.
VAT for food and catering businesses, as well as hairdressing services, will be reduced from 13.5% to 9% from 1 July 2026 - at a cost of €232m next year and €681m in a full year.
The Taoiseach, speaking on RTÉ's Nine O'Clock News, said that amid the global economic uncertainty, the Coalition had to protect the jobs we have, and he noted that wages were due to increase by 5% this year.
Watch: As it happened - Budget 2026 from Dáil Éireann
He defended the VAT cut on completed apartments, saying that Ireland has not built enough and that supply is needed to bring down prices.
Mr Martin also said that it was "difficult to put a figure" on how many apartments would be built as a result of the reduction in VAT to 9%, but that the new rate was designed to narrow the viability gap.
He also said Budget 2026 would ensure that the lowest incomes would be protected the most, while also targeting child poverty.
The Taoiseach added that Ireland has a rising population and an infrastructure deficit and that the Government needs to create more water supply and wastewater treatment, as well as providing energy and building more roads, rail, public transport and housing.
Mr Martin said the Budget is about "protecting the most vulnerable", adding that the lowest income households will benefit the most.
Govt pledges to 'secure jobs' with Budget 2026
Earlier, the Government pledged to "secure jobs and stability at a time of global challenge" as part of its annual Budget announcement.
The suite of new measures announced includes €2.9bn for the delivery of new-build social homes and second-hand acquisitions and €10 increases to weekly social protection payments.
The national minimum wage is to increase by 65c per hour to €14.15 per hour, however there was no change to personal income tax for workers.
There will be funding for additional Defence Forces members, gardaí, and education workers as well as funding for a contentious cut on student contribution fees, the commencement of a new Dublin-Derry airlink, and progression on infrastructure projects such as the M28 in Cork.
Budget 2026 was announced by Minister for Finance Paschal Donohoe and Minister for Public Expenditure Jack Chambers in the Dáil this afternoon.
Mr Donohoe said: "This Budget builds up our resilience and will help us to adapt at a time of historic challenge and change for our economy and our society."
Watch: Donohoe says 63,500 jobs expected to be added by end of next year
He said it was "regrettable" that US tariffs were introduced and said they would impact upon growth in the coming years.
"This year saw greater fragmentation as widespread tariffs were introduced. The world has been pulling away from its near universal commitment to free and open trade, a commitment that benefited many, and our fortunes are connected to the world around us," he said.
Elsewhere in the measures, a full week's "Christmas bonus" will be paid for social protection payment recipients.
The national minimum wage is to increase to €14.15 per hour and the Government said the 2% Universal Social Charge band will be increased to avoid minimum wage workers falling into the top rates of USC.
The renters' tax credit, which had been due to expire this year, will be extended for a further three years to the end of 2028.
The 9% VAT rate on gas and electricity bills will be extended until the end of 2030, while that rate will also apply to construction of new apartments.
Additionally, the Budget includes a typical increase on the cost of cigarettes (50c more for a pack of 20), a new Defence Forces uniform, and a carbon tax increase for auto fuels from tomorrow - and applying to all other fuels from May.
Mr Donohoe also announced a new Derelict Property Tax, to replace the Derelict Sites Levy, stating that dereliction is "a blight on our towns and cities".
He said he does "not intend" for the new tax to be charged at a lower rate than the levy, which is currently set at 7% of the site market value.
Mr Chambers also said there would be a "record level of investment" in the Department of Health.
It is the first Budget delivered by the Government since the election which returned Fianna Fáil and Fine Gael to power, supported by several independents.
Mr Chambers announced an increase in the standard capitation rates paid to all schools.
This will include, on a per pupil basis, €50 for primary and special schools (from €224 to €274), and €20 for post-primary schools (from €386 to €406).
Elsewhere, a successor scheme to the piloted basic income for artists is to be introduced next year, Mr Chambers has said.
Read more: At a glance: Here are the key points from Budget 2026
Housing, infrastructure, child poverty critical areas in Budget - Chambers
Speaking on RTÉ's Six One programme, Mr Chambers said housing, infrastructure and child poverty were the critical areas in Budget 2026.
He said that there was a need to drive investment and that was a central focus of the Budget in trying to accelerate infrastructure investment and build more homes.
Mr Chambers said he felt it was correct that the State used regulation or taxation to drive the supply of homes particularly where there is a viability gap.
He added that the Government was also trying to ramp up capital investment and protect the jobs that exist in communities across the country.
On workers, he said that due to wage growth, the Budget did not change the income tax position for most workers for next year. He said that in a period of risk and uncertainty such as in global trade, the Government was trying to ramp up investment to mitigate risk and protect jobs.
He added that there is a series of budgets for this Government, and he expects through future budgets that the Government will be able to make adjustments to the level of income tax in the Irish economy.
Watch: 'Christmas bonus' for €1.5m recipients of long-term social welfare schemes to be paid
Budget gave nothing to those hit by cost-of-living crisis - SF
The budget was immediately criticised by Opposition parties, with Sinn Féin's spokesperson on finance Pearse Doherty claiming the Budget "gave nothing" to those impacted by the cost-of-living crisis.
He said: "When all the clapping is done, when all the back-slapping is over and the Government benches die down, when all of the spin that we have heard, the bluster, the deluded arrogance that has come dripping from both ministers' speeches - ordinary people, where are they? They are left in the cold."
He added: "Your big message in this Budget, and people have heard it loud and clear today, is that 'you are on your own'.
"This is a Budget which abandons workers and families to look after those at the top. No help with the cost-of-living crisis … no break from taxes, a blueprint for the continuation for the never-ending crises in our housing and health.
"Election promises one after the other, torn up and thrown in the bin," said Mr Doherty.
