Dáil Éireann Debate, Tuesday - 9 December 2025
317. Deputy Ken O'Flynn asked the Tánaiste and Minister for Finance the fiscal rationale used to justify removing electricity credits in Budget 2026; the estimated Exchequer saving; and if the Department evaluated the risk of renewed inflationary pressure from rising energy bills. [69904/25]
View answerSignificant support has been provided to households and businesses over the last four years to help absorb the worst impacts of inflationary pressures. Among Government’s response were electricity credits to households – Budget 2025 included two credits of €125 each as part of the temporary package of once-off measures: at the time it was estimated that this would cost the Exchequer in the region of €0.5 billion.
Budget 2026 was calibrated to protect jobs, maintain our competitiveness and keep our public finances safe while allowing for increased capital investment. It moved away from once-off measures to more sustainable and permanent supports which are targeted at those most in need.
Budget 2026 also extended the 9% VAT rate on gas and electricity for households and businesses.
My Department’s forecast, prepared at the time of Budget 2026, is for inflation of around 2 per cent in 2026. These forecasts are prepared in line with Eurostat guidance on the treatment of energy price compensation measures in the Harmonised Index of Consumer Prices (HICP), which states that electricity credits should not be accounted for in the calculation of the CPI/HICP.
