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Chapter 1: What are the main business headlines for today?
Breakfast Business with Enterprise Ireland on Newstalk. Good morning and welcome to Breakfast Business and thank you to Eamon Torsney. It is Monday the 6th of October at 6.31. Happy World Architecture Day.
Coming up on today's show we'll be talking to the boss of the Foresight Group about private equity investment and we'll be looking at new changes in our current accounts and all the markets as usual. You can email us business at newstalk.com.
But first, let's have a look at the main business stories in the newspapers and websites, which we shall do in the tip top company of Leona McCann from Irish Life Investment, Irish Life Investment Management. Good morning, Leona. Morning, Joe. Hope you had a nice weekend. A lovely weekend. Not too windy, I hope. Now, tomorrow is Budget Day.
What should we be looking out for and what will the markets be especially looking out for?
Yes, so Budget 2026 is to be announced tomorrow. What we know so far or what's been alluded to is that it should be a Ā£9.4 billion budget package. About Ā£7.9 billion will be in spending and about Ā£1.5 billion in tax cuts. So the rumours so far are that we will see a VAT cut coming through for the hospitality sector.
Very controversial.
Very controversial, but a sector that's been struggling and lobbying hard for it. So it's expected that VAT will be reduced from 13.5% to 9%, and the estimated costs to that are 870 million. So far, we're not expecting any income tax packages. The relatively small budget tax package of 1.5 billion doesn't leave a lot of room for any income tax or USC changes.
And the VAT cut is included in that 1.5 billion?
Yes.
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Chapter 2: What should we expect from Budget 2026?
Yeah. So maybe just for context, the US fiscal year runs from the 1st of October. It starts on the 1st of October. And ahead of that, the US government looks to... agree a funding bill to fund the government for the next year. And what's happened is that Republicans and Democrats haven't been able to agree that bill. Hence, you've got this shutdown. Now, shutdowns aren't a rarity in the US.
We have seen them before. If you go back to the mid 1970s, there's been about 20 US shutdowns. This is the first one that were nearly seven years, so it might feel newer. It's actually the third one under Trump that we've seen. So they are things that we have seen before. So what happens in a shutdown is that you get most of the government agencies being shut down.
There's no funding essentially for them during that period. What stays open? So things like mandatory programs, so things like Medicare, Social Security and Medicaid, as well as the Mail Service and the Fed, which are self-funding, so they're not impacted by this. And essential functions also stay open.
But I saw the TSA, the security people in LaGuardia Airport downed tools over the weekend, which I thought was very interesting. I would have thought that would be fairly essential.
Yeah, so essential functions, typically you would see those linked to national security and public safety will operate, but they will have a skeleton cruise. So I suspect that's probably in protest that they can't do what they're meant to do with a skeleton crew. Now, what does it impact? Federal employees are furloughed.
Now, Trump is saying and threatening that he's looking to lay off employees. Now, there are questions. Actually fire them. Actually fire them. Exactly. Now, there are questions whether legally he can do that. The potential for government spending delays are possible for projects and procurement and things like that. And you see data blackouts. So, for example, the U.S.
jobs report that was due from the Bureau of Labor Statistics was due out last Friday. That didn't come.
What about the non-farm payrolls this coming Friday?
So they won't be out either if the shutdown is still there. So you have some issues around some data blackouts during this period, which I think means that you'll see a bit more focus on private data during the period. So we saw the ADP labor report come out last week, probably a bit more focus on that, given the US shutdown. In terms of the market impact from shutdowns... Muted so far.
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