The Government will today give health spending an unprecedented boost of over €400 million (£315 million) as it moves to position itself for an election next year.
The Minister for Finance, Mr McCreevy, will announce the extra allocation this afternoon when he delivers his fifth and most politically sensitive Budget speech in the Dβil.
Despite the deterioration in the Government's financial position Mr McCreevy is expected to borrow for the first time in five years rather than impose harsh restrictions on spending in the run-up to the election.
The rise over and above the Government spending estimates of a fortnight ago contrasts with an equivalent €250 million last year, seen then as a major increase.
The extra money will mean health spending will rise 7 per cent over the estimates figure, which in turn involved a 13 per cent rise on last year's estimates.
However, sources said last night that none of the extra money would be spent on extending medical cards to people on low incomes, despite the political furore on the issue.
The Government insists it will not change it position, and last night defeated a Labour motion calling on it to climb down.
There will be no cuts in tax rates, with Mr McCreevy instead increasing tax credits to take more people out of the tax net. He will announce a significant increase in the £144 per week an individual can earn before paying tax.
The increase will fall short of the £183 per week threshold required to meet last year's commitment to take all minimum wage earners out of the tax net.
Additional spending on health, roads, child benefit and welfare increases, together with the tax reductions will see the Government borrowing for the first time - possibly up to €1.5 billion - unless Mr McCreevy finds some creative new source of revenue.
The publication last night of the November Exchequer statement underlined the Minister's increasingly limited room to manoeuvre. The slowdown in tax receipts and rising spending have shrunk the Exchequer surplus to £1.9 billion from £3.8 billion this time last year, with a further fall expected.
On top of the additional health spending of over €400 million will be welfare and pension increases costing the same, while fulfilling last year's commitments on child benefit commitments would also cost some €400 million.
Mr McCreevy has also promised additional spending on roads and other infrastructure projects. 2002 will see the tax year aligned with the calendar year for the first time. However, tax and welfare changes will not be felt immediately, but taxpayers and welfare recipients will receive backdated lump sums in late February or early March.
Follow live coverage of today's Budget on The Irish Times website at www.Ireland.com/special/budget/2002