By David Raleigh

The Minister for Finance, Michael Noonan, has said tomorrow’s budget will be focussed on increases in public expenditure more so than tax breaks for “squeezed middle” income earners.

Speaking in his native Limerick, Mr Noonan said, while there will be tax cuts for employees, the “big benefits” will be seen in increased spending in public services.

“There is some money to spend, which there hasn’t been in previous budgets. We have decided the resources available will be divided on at least a 2:1 basis, between tax reductions and increased expenditure – in favour of public expenditure. There’ll be quiet significant increases in public expenditure,” Mr Noonan said.

“There will be tax reductions, and they will apply to low paid and middle income people, but the big benefits of tomorrow’s budget will be improvements in the services; there’ll be extra money for health and education, and for law and order on the streets, and for childcare.”

“These are issues the squeezed middle are very interested in as well. So the big benefits will be on the expenditure side, rather than on the tax side,” he added.

Mr Noonan said he believed the current row between the government parties, over Fianna Fáil’s demand for a €5 state pension increase ahead of the Budget, would not delay the Budget.

“There are two ministers involved – I’m on the tax side and (minister) Pascal Donoghue is on the expenditure side – and this is an expenditure issue. I understand (Pascal Donoghue) was in talks yesterday evening, and again this morning, to try to resolve what appeared to me to be rather small difficulties between the Fianna Fáil view and the view of the government. I expect it to be resolved and I expect it to be resolved as the day goes by,” Mr Noonan said.

“I think it will be resolved amicably. There’s a difference, but it’s not a huge amount of money (involved). I think (the Budget) will go through without drama tomorrow,” he added.

Mr Noonan said “challenges” for the minority government “were quiet foreseeable when the Government was formed”.

“This is the first minority government in the history of the state. Not only do we have Independent ministers in partnership with us in the Cabinet, but we also rely on the support of the main opposition party Fianna Fáil, and, Fianna Fáil have been very responsible in their role so far, and I’m sure that will continue through the Budget.”