The country is facing economic challenges according to the Tánaiste, Mary Coughlan, and the budget will provide "clear direction" on how to face these challenges over the next 18 months.
Her comments came as Minister for Finance Brian Lenihan today warned of implications due to the shortfall in tax revenues.
"Our tax shortfall this year could be in the order of €5 billion, and that would have implications, that would mean we will breach the general government balance in terms of the [EU] stability and growth pact," Mr Lenihan said.
Ms Coughlan said the early budget was being held because of the expected tax shortfall of up to €5 billion and the desire to take "decisive management action" to deal with the economic downturn.
She was responding to questions on RTÉ radio this morning about the decision to bring forward the 2009 budget by almost two months. The Minister for Finance will now present his budget for 2009 on October 14th.
“This country is a low tax, high wage economy which has developed considerably,” she said. “The general public appreciate that readjustments need to be made. At the same time there must be clarity about where we’re going over the next 18 months to 2 years and that is what will be given in the budget.”
The Minister for Enterprise, Trade and Employment refused to be drawn on whether the Government will seek a public sector pay freeze when it resumes negotiations with the social partners tomorrow on a new national pay deal.
She said she didn’t want to “pre-empt” the talks but said all partners were anxious to resolve the issue.
Ms Coughlan also refused to say what tax measures might be introduced in the forthcoming budget.
“I’m not going to give any signal because there is no signal to give as to what tax measures may or may not be introduced,” she said.
She said the Government was spending €53 billion this year. “Sometimes when you listen to what’s going on you’d think there wasn’t a bob being spent,” she said.