The Government's budgetary policy is now a complete shambles, and Mr McCreevy needs to go back to the drawing board, according to the chief economist at AIB Group Treasury.

Mr Oliver Mangan, in a note on the Budget measures, says the policy was "completely illogical". According to the AIB economist, the Minister has not cleared up the problems of the individualisation of the tax bands, despite the granting of an additional £3,000 (€3,812) tax allowance to many stay-at-home spouses.

The result of the Budget and subsequent changes is that the tax system now gives an incentive for spouses of taxpayers on the standard rate band to leave the workforce and those on the top rate to join it.

In addition, if Mr McCreevy pursues the current strategy it will prove costly to increase the new £3,000 stay-at-home allowance to compensate one income families.

Mr Mangan says the Minister should allow non-working spouses to keep their £14,000 standard rate tax band - that is half the amount that will apply to working taxpayers in three years.

This would mean that all one income families earning up to £42,000 would benefit from the individualisation of the tax bands. Mr Mangan also pointed to another major anomaly in the move to individualise the standard tax band. Married couples on the same gross income where both spouses work could end up paying very different tax bills. For example, if the gross income of two couples is £60,000 there could be a difference of up to £4,000 in the tax paid, even if both partners in both couples work.

For example, he takes one couple with one spouse earning £50,000 and the other earning £10,000 as a job share. Under the plan outlined in the Budget, they will start to pay the higher rate at £38,000 in two years, when the process is complete.

Another couple, who both earn £30,000 will be able to earn £56,000 before moving on to the higher rate and will pay £3,960 less than the first couple.

"The Government has a golden opportunity to put in place a more coherent strategy. It must prioritise its tax objectives by removing low income earners from the tax net by increasing personal and PAYE allowances and by widening the standard tax band substantially."