Look back: Budgets gone by, what can they tell us?

Published 05/Oct/2026 By Ross McGann

There’s a well known phenomenon in Irish politics called The “Political Business Cycle” where budgets presented by government will cycle from being beneficial for people in the lead up to elections, to being more tightening of the belt in the years between elections.

Where are we now?

The last general election was in 2024 and the next one is not due until the second half of 2029, leaving us right in the middle.

What does that mean?

Well, you’ll be sorry to hear but historically speaking, the years between elections are typically less friendly to peoples pockets, public services and major infrastructure projects.

Budgets within the middle years can range anywhere from dry, keep things as they are, no major changes, to austerity and introduction of additional taxes.

Will this budget be bad?

The weeks between the end of summer break and budget day always bring speculation, alternate budgets, pre-budget submissions, essentially a lot of political noise.

To cut through the noise we look at what’s being said by government leaders, Michéal Martin has already said that not everyone will be happy with this budget.

While Tánaiste and Minister for finance Simon Harris is apparently still fighting for the €100 “Culture voucher” for 16 year olds, who coincidentally will be 18 just in time for the next election.

In my opinion, its likely that this will lean more to the dryer side of budgets, no major increases in tax, maybe slight move on income tax bands, reduction on carbon for home heating oil and maybe slight excise cuts on Petrol and diesel.

There will be some increases for social welfare payments and minimum wage. Over all, when including inflation I feel most workers will end up worse off in 2027 than in 2026 budget.

Could be worse?

Things can always be worse, we only have to look back to the austerity budgets from 2009-2011 after the financial crash. Introduction of USC, slashing of public sector pay and cuts to most public services.

Going back to the 1970’s, 1977 saw a massive give away budget that did away with Domestic rates, the property tax of the day as well as road tax on most cars. Much of this was covered by the government borrowing money.

The mid election budgets basically took back everything that was given and due to slowing down of the global financial markets which lead to an increase on interest rates, by the 1980’s VAT and income tax rates rose dramatically while spending on public sector plummeted.

Not always extremes

Looking outside of extreme examples such as those above, the political business cycle can also be seen during non crisis times such as the 1990’s. These middle years budgets tended to be more “Dry” with no need for any extreme swings either way.

By leaving income tax brackets as they are, more people end up in higher brackets creating what’s known as a fiscal drag. these kind of tactics allow them to build up a buffer, maybe pay down national debt, then leave enough for that give away budget in the final year of an election.

Conclusion

Given the current crisis regarding the price of energy and fuel, many people have been calling for strong supports in budget 2027, but going by the current messaging from top government officials its looks like many wont be happy with the outcome.

The budget is to be read out by the government on Tuesday 06th of October and only then will really know what it contains.