Budget 2027 - a Budget for the Common Good

A budget directed towards the Common Good must do four things in 2027. It must promote fairness and a more equitable distribution of the economic resources at Government’s disposal. It must protect the most vulnerable and enhance resilience in the face of cost of living pressures, poverty and deprivation. It must address the deficits in our social infrastructure and services, not least of all housing, energy, healthcare and education. Finally, Budget 2027 must also prepare for the future and address the risks posed by an unsustainable fiscal policy.

The Common Good and Fairness

Social Justice Ireland welcomed the progressive profile of Budget 2026 in comparison with previous years. While increases in welfare payments last year, including those targeted at children, were welcome they were insufficient to compensate for the discontinuation of once-off measures which dominated previous budgets. Indeed, the deterioration in the relative standing of low- and middle-income households as a result of Budgetary policy from 2020-2025 presents a challenge to Government. It also points to Budgetary priorities for Budget 2027, to build on the small steps made in Budget 2026. We strongly encourage Government to do so. 

Cost of Living Pressures and Resilience

Having fallen from a high of 7.8 per cent in 2022, inflation began rising again in 2026. Once again driven by conflict, this time due to war in the Middle East,  and continued fossil fuel dependence, the annual rate of inflation stood at 3.6 per cent in May 2026. Within that headline figure, the price of certain essentials have risen at a faster pace, with transport increasing by 6.1 per cent and housing, water, electricity, gas and other fuels rising by 7.1 per cent. The CSO has previously noted that the impact of inflation is greatest for those households in the bottom twenty percent (bottom quintile) of the income distribution.

Previous measures in response to severe cost of living pressures provided untargeted universal supports. While recognising the need for intervention, Social Justice Ireland disagreed with this blanket approach. While we may all have been experiencing the same storm, those with greater resources were better equipped to weather it. Should the need arise again, Government must deliver a more sophisticated response that targets low income households. 

More than reactive measures, ongoing enhancement of resilience is sorely needed. If we are to protect those most exposed to price shocks, then we must tackle poverty and invest in adequate incomes. Ad hoc increases to welfare payments, unrelated to other movements in the economy, fail to address income inadequacy in a strategic and sustained manner. Budget 2027 is an opportunity to commit to benchmarking and chart a pathway to index social welfare rates to average weekly earnings. For full details of our proposals see Budget Choices 2027.   

Invest in Infrastructure and Services

Securing the wellbeing and prosperity of Irish society does not depend solely on putting money away for the future, it requires investment today so that we are prepared and resilient when tomorrow’s challenges present themselves. We must invest in sufficient services and infrastructure, in areas such as housing, public transport and healthcare. We must prepare for demographic change, invest in climate action, and get to grips for digitalisation. Budget 2027 must do so in a responsible and socially fair manner.

 Proposed Stance: Fairness, Resilience and Future-Proofing

In many respects global volatility has become the new normal over the past decade. As mentioned, in spring of this year, price shocks, again driven by conflict, once more pushed up the cost of living. In the context of ongoing geopolitical uncertainty, Social Justice Ireland  believes that Budget 2027 should reflect fairness and the protection of the most vulnerable. Any Government measures to alleviate energy-driven cost of living pressures must be targeted and prioritise those most exposed: low-income households.

At present, while the public finances are in surplus, the underlying fiscal position is in deficit when windfall corporate revenues are excluded. A sudden or rapid reduction in these receipts would expose Ireland to the risk of a return to austerity. Therefore, Social Justice Ireland proposes that the forthcoming Budget be taken in two parts: 

• In Budget 2027 and in the coming years, Government should move towards investing once-off windfall tax receipts in one-off projects. This revenue and capital spend should then be accounted for separately from the “normal” Budget.
• At the same time, Government must move to a position where recurring expenditure is resourced from increased recurring revenue. 

The relationship between recurring revenue and current spending should then be presented using the regular budget process. This would ensure full transparency of the budgetary process and avoid any sudden major shortfall in revenue as windfall tax receipts reduce over time.

As well as taking the Budget in two parts, Social Justice Ireland proposes that Budget 2027 should outline a clear plan for the investment of short-term windfall revenues in the long-term interests of Irish society, as well as for their eventual withdrawal.

In light of population growth and the challenges identified in the Department of Finance’s 2025 Future Forty report, as well as the anticipated withdrawal of windfall revenues over the long-term, Government should use Budget 2027 to outline a clear plan for broadening the tax base and increasing sustainable revenue. We must be realistic about how much will need to be spent on our social infrastructure and services both in future and to address existing deficits. Social Justice Ireland’s proposed overarching fiscal framework is that Government set a per capita tax-take target. This would link Ireland’s overall level of taxation to population size and the related demand on resources. 

In this article, we briefly lay out a range of taxation measures that would contribute to broadening the tax base. The tax measures we have proposed here would yield €4.1bn in 2027, as a step towards reaching the overall tax-take target.

Packages Proposed for Budget 2027

In the following sections, Social Justice Ireland sets out a series of proposals (and costings) to address all the issues identified here. Proposals for the reform of taxation are also set out. These are the choices we believe Government should make in Budget 2027.

Major Packages Proposed include:

Housing: €627m net package including an increase in stamp duty for transfers of property exceeding €1m, an end to the Help to Buy Scheme and investment in homelessness prevention. A further €2.2bn to be invested from windfall receipts for the construction of social housing. 

Just Transition: €278m net package including biodiversity, Just Transition and the Circular Economy, and an aviation tax on commercial flights. A further €500m of windfall revenue is to be invested in our energy infrastructure.

Social Welfare: €726m investment core welfare payments and moving towards benchmarking, extending the fuel allowance and raising the living alone allowance.  

Healthcare, carers and disability: €384m investment prioritising social and community care, disability, and mental health. A further €300m for Sláintecare infrastructure from windfall receipts. 

Children and Families: €842m investment in an increase to Child Benefit, the child support payments, Early Childhood Care and Education, and child protection. 

Rural, Regional and Community Development: €143m investment prioritising the regional development and transition, rural transport, PPNs and community and voluntary efforts. 

Education: €276m investment in areas such as reducing class sizes, increasing special needs places, adult literacy, DEIS, skills development, community education, and higher education. 

Pensions and Older People: €111m investment prioritising adequacy of pensions, and investment in social and home care.

Overseas Development and International Protection: €208m investment in ODA, to move towards the UN target of 0.7per cent of national income, and international protection. 

Taxation Reform: +€2,161m

• Changes to income taxes - €233m
• Increases to capital and corporation taxes - €1,928m

Overall impact of Social Justice Ireland proposals

Following our own proposal to split the Budget in two and account for both parts separately, and using the most recent projection of the General Government Balance for 2027, we outline the Budgetary impact of our proposals: