If the next budget does not honour all the commitments made in Partnership 2000, there will be no future national wage agreements, SIPTU has warned.

In its pre-budget submission, the State's largest trade union says the next budget is the "last chance" the Minister for Finance, Mr McCreevy has to honour the commitments made under the deal.

"Last year's Budget was totally inequitable and the tax package was not the one promised under the Partnership 2000, so this year is Mr McCreevy's chance to finally get it right," said Mr Jimmy Sommers, SIPTU's president. He said the next budget will be the last one under Partnership 2000.

He added that SIPTU was putting Mr McCreevy "on notice" that low- and middle-income taxpayers have to be properly addressed in this budget or "they will be looking to advance their position by seeking wage increases".

SIPTU's submission, A Budget for the Needy not the Greedy, says cutting tax rates is "too simplistic" and instead recommends increasing the exemption limit for income tax for a single person by £150 per year.

It also calls for a £475 increase in personal allowances and a £475 increase in the upper threshold of the standard tax band. It says this would allow people to earn £475 more annually before they hit the higher band. SIPTU calculates the total cost of this package at £360 million per annum.

"As a result of such measures a single PAYE worker would enter the tax net at £85 per week from April 1999 and pay the top rate of tax at £286 per week," says the submission.

It says the package would be significantly improved if personal allowances are increased by £950 a year and this would mean that people qualifying for the minimum wage of £4.40 per hour would be exempt from tax.

It argues that the last Budget was too generous to "the corporate sector" and says any further cuts in corporation tax should be made conditional on full implementation of the £4.40 minimum wage by employers by the year 2000.

It also wants the 40 per cent rate of capital gains tax restored. "This was among the factors fuelling speculative rather than productive investment and further aggravating spiralling prices in the housing market during the year," it says.

It adds that PRSI should not be reduced as this "would threaten our longer-term ability to finance required improvements in pensions and other social insurance payments".

It says under Partnership 2000 a commitment was given that social welfare rates would correspond to those recommended by the Commission on Social Welfare. To achieve this, rates will have to be increased across the board by an average of £5, the submission says.

Mr Des Geraghty, vice-president, said the measures proposed will not increase inflationary pressures. "If these tax changes are implemented they will have the effect of bringing more people into the workplace and reducing social welfare bills."

He said the legitimate demands of low- and middle-income earners are not a threat to inflation. "We rarely hear anything about the inflationary pay increases of senior managerial people," he added.