Minister for Finance Michael Noonan has moved to ease fears over another harsh budget, claiming it will be “two thirds” as difficult as last year.
But he hinted tough measures still lie ahead, stating the Government was faced with tough policy decisions over the coming months.
Earlier, Taoiseach Enda Kenny refused to rule out the possibility of tax increases in December's budget
The Minister said a three-year plan to restore the country's economy will be published in October, giving people a better idea of what to expect in December.
"The 2012 budget will be about two thirds as difficult as the 2011 budget, but of course a lot of the reasonably easy options have been taken already, so we're down to rather difficult policy decisions.," Mr Noonan said in Galway as the Fine Gael two-day parliamentary party meeting came to a close today.
Mr Noonan signalled all will be revealed when the Government publishes its budgetary strategy next month. "Anybody with a reasonably good knowledge of what's going on will have a very good idea of what's up ahead after that comes up," he said.
The IMF said the Government is on track to meet its targets this year as it continues to implement its bailout programme, but it downgraded economic growth projections from 0.6 per cent to 0.4 per cent for this year. The Government is expected to revise its growth projection of 0.8 per cent when it publishes its three-year plan.
Speaking this morning, Mr Kenny said the Government was committed to cutting the deficit to 8.6 per cent next year and that savings of €3.6 billion to €4 billion were required to do so.
Mr Kenny said he could not say how the savings would be achieved at this point as some "pieces of the jigsaw" such as overall tax receipts and growth projections were not yet clear.
Asked if he would backtrack on promises not to raise taxes or cut payments to groups such as pensioners or the blind, Mr Kenny said the Government needed to strike a balance between what can be achieved and what was fair but it was prepared to be "radical" in order to secure the necessary savings.
"We will achieve the target we have set…it is absolutely necessary we do that if our country is going to have a future," he told RTÉ Morning Ireland.
Mr Kenny said everything was on the table with regard to the Government spending review, following suggestions yesterday that the National Lottery was among the assets that could be disposed of.
Mr Kenny said the Government was cognisant of people struggling to pay their mortgages but ruled out any form of debt forgiveness. "There will not be general debt forgiveness because that's asking every taxpayer who is paying their way to pay for all of the others and that will not apply," he said.
He said an expert group would soon bring recommendations on what could be done to assist distressed property owners. The Government will then make decisions that it hopes can give people a chance to work out things for themselves, he said.
Fianna Fáil said Mr Kenny’s refusal to rule out tax increases and social welfare cuts from the budget will spark alarm among the public. “These were promises first made at election time, were then included in the Programme for Government and were reaffirmed by the Taoiseach and Tanaiste on the Government’s 100th day in office,” said finance spokesman Michael McGrath. “However, the Taoiseach was less than clear on the status of those promises.”
Additional reporting: PA