Budget 2026 (Enterprise, Tourism and Employment): Statements Seanad Éireann — 2025-10-14 ============================================================ Ollie Crowe (FF), Industrial and Commercial Panel I welcome the Minister and thank him for joining us to talk through budget 2026 from an enterprise, trade and tourism perspective. The budget was very positive for Irish businesses and companies that have invested in Ireland. It reflects the Government's commitment to supporting our businesses and its determination to continuously attract foreign direct investment that will further strengthen the Irish economy. Our economy has rebounded well from Covid but it is important not to take that for granted, particularly in light of the challenges from a global perspective. I welcome, in particular, the VAT reduction for the hospitality sector. As the Minister will be aware, the current 13.5% VAT rate in Ireland is one of the highest rates on food services in the EU. The industry has faced spiralling costs in recent years, leading to a raft of closures. We also have data which makes clear the impact this has had on employment within the sector. The labour force survey for quarter 2 of 2025, which was released in August, made this obvious. Hospitality employment stood at 181,000, down from 184,200 in the same quarter of 2024. This is a 1.7% reduction year on year. By way of comparison, total national employment grew by 2.3% in the same period. The labour force survey also shows that full-time employment in hospitality fell by 6.7%, which is very worrying. It should also be noted that these are frequently jobs in small towns and villages that are very difficult to replace and that have an outsized impact on local economies. I know from speaking with hospitality businesses in Galway city and county how much pressure they have been operating under in recent years and how incredibly tight margins have become. It should also be acknowledged that the industry is vital to the regions, particularly to small towns and villages where cafés, bars and restaurants serving food are often the main employers. Such businesses are also a resource to their local communities. They provide premises for events and when they close, communities are often left without a suitable venue to host confirmation, communion, and birthday celebrations as well as sadder occasions. These businesses are not just important to the families who typically run them but also to the communities they serve. Anyone with any knowledge of the hospitality industry will recognise that in the absence of Government action the sector would have continued to struggle and would have faced ongoing closures. The move has been met with criticism in certain quarters from those who have used examples that are outlandish and that ignore the thousands of small family businesses across the country that employ tens of thousands of people. The VAT reduction is a vital and essential measure for an industry facing considerable challenges. I acknowledge that the Minister, Deputy Burke, pushed strongly for the reduction. The rate is due to be introduced from 1 July next year. Ideally, however, the reduction would be introduced earlier in view of the pressures businesses are facing, such as high inflation, sick pay costs, pension auto-enrolment and so on. Is that possible or is the July date effectively set in stone? I previously raised with the Minister the issue of excise duty on draught products for rural establishments and alcohol-only, non-food pubs. A small investment there would have a significant return for pubs across the country. I ask the Minister to consider that. The efforts to strengthen regional development from an enterprise perspective in budget 2026 are especially welcome. As the Minister outlined, the budget provides enhanced funding for local enterprise offices, targeted enterprise supports and strategic investment in innovation and scaling. We want to see jobs growth across the country and these are vital measures which will support businesses that are seeking to grow and create sustainable jobs across Ireland. I also welcome the increase in the research and development tax credit, from 30% to 35%, because it will enhance Ireland's position for both foreign direct investment and domestic innovation. Given the recent US tax changes that discouraged research and development activity outside the US, this measure was particularly needed and welcome. I also welcome the fact that the first-year payment threshold was raised from €75,000 to €87,500. This will support smaller research and development projects. The establishment of the AI office of Ireland is also an important measure. This is an area we are still learning about. I expect, on the basis of what has happened in the past 20 years, that Ireland will also become a leader in this new technology sector. It is especially important in the context of continuing to attract foreign direct investment that we maintain our reputation. AI is clearly a helpful resource for companies if used appropriately. The establishment of an office which can assist businesses in achieving that goal is a logical measure. The Minister has said that the office will be up and running by August 2026. What staffing resources are planned for that office and how will it engage with businesses? If available, such details would be appreciated. I also want to highlight the measures taken to continue to attract foreign direct investment. I already mentioned the research and development tax credit which is just one of a number of measures included in budget 2026. The €100 million next-generation sites fund is obviously the stand-out initiative and it is very welcome. This fund will be used to prepare large-scale regional serviced locations for future foreign direct investment. It is my understanding that the first of these sites is expected to be in the west of Ireland. I ask the Minister to tell us a little more about the process and whether there has been any progress in identifying suitable sites. A number of smaller measures will also assist in attracting foreign direct investment, including the extension of a special assignee relief programme and the extension of the foreign earnings deduction. These are both positive and welcome. I welcome the €120 million in funding for important projects of common European interest which will position Ireland at the forefront of strategic European industrial initiatives, including advanced semi-conductor and AI technologies. This is essential, given our determination to continue to be at the heart of Europe and to work closely with partners across the EU. Budget 2026 is a pro-enterprise, forward-looking budget which supports businesses and workers. It balances the need for short-term supports with long-term vision. It recognises the need for balanced regional development, the vital role that SMEs across the country play and the importance of foreign direct investment. --- Source: Houses of the Oireachtas. Licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). The Official Report is revised after first publication; the fetch timestamp below identifies the version quoted. Record URI: https://data.oireachtas.ie/akn/ie/debateRecord/seanad/2025-10-14/debate/main Retrieved: 2026-08-14T04:54:13+00:00 Sitting date: 2025-10-14