All new Government spending measures will be announced alongside tax and social welfare changes on budget day in December in a major revamp of how public expenditure decisions are presented. Laura Slatteryreports.

The Tánaiste and Minister for Finance, Brian Cowen, said a new "unified" budget would include the spending measures normally announced to the public in the abridged estimates in November.

Mr Cowen said "streamlining" the budget arrangements would allow the Government to manage the public finances in a more transparent manner.

It also means that this year's budget day speech will contain more fresh announcements than in previous years - when measures announced for the first time on budget day typically only represented a small fraction of public spending.

Mr Cowen will publish detailed pre-budget estimates in mid-October showing the money required to maintain public services at their existing levels in 2008, taking into account demographic changes, inflation and other matters.

He said this expanded pre-budget outlook (PBO) would make it clear to the Dáil and the public exactly the level of extra spending being proposed under the budget.

The pre-budget outlook will also set out the economic and fiscal outlook for the next three years. But unlike the abridged estimates publication, it will not contain any new measures.

All policy initiatives involving an increase in public expenditure beyond the "existing level of service" figures will be dealt with in budget 2008, which will take place on December 5th.

The Minister said he was responding to a recommendation by the Dáil Committee of Public Accounts, which asked for a clear distinction between the pre-budget and post-budget allocations in a report on estimates reform in 2005.

"Spending and revenue decisions will be made clearer and handled within the framework of the Government's overall budgetary and economic parameters," Mr Cowen said.

"In this way, we will ensure that Ireland maintains a sound and sensible fiscal policy, fully in line with the provisions of the EU's stability and growth pact."

Speaking at the opening of the Economic and Social Research Institute's new premises, Mr Cowen also said the new system would be better value for money for the public.

The revised estimates volume, which sets out the post-budget position, will be published as usual next February. However, under the budgetary reform process, it may eventually be phased out or reformed.

Next February will be the first time that the Government publishes an update on the annual output statements prepared by each Minister. The statements, which were introduced earlier this year, set out what each department is to achieve with the public money granted to them.

Economists broadly welcomed the budget reforms yesterday.

"The budget process at the moment is incredibly opaque and anything that changes it will improve it," said Pat McArdle, chief economist at Ulster Bank.

"It's not going to change the budget balance, it's not going to change the impact on the economy. It is going to make clear what is going on," he said.

"You won't get policy changes buried in subheads in the estimates and re-announced on budget day."

The White Paper on Receipts and Expenditure, a document that traditionally updates the figures in the estimates to include any new Revenue information on the expected tax take and some other changes, will continue to be released about a week before the budget and will now revise the figures in the pre-budget outlook.

"You are getting a clean document six weeks ahead of the budget and the estimates campaign by Government departments will be finished by then. It will give information early and it will enable a debate in the Dáil. The White Paper will then give an updated opening position," Mr McArdle said.

Goodbody Stockbrokers economist Dermot O'Leary said the reforms were another step forward in simplifying the "convoluted" budget process and would help "manage expectations" within Government departments.

"What the Department of Finance comes out with on budget day, or what the Government can afford to do, has been a big secret, and I don't think that secrecy is necessary."

Meanwhile, a group set up earlier this year to examine how the Government could make more accurate tax forecasts is due to report to Mr Cowen shortly.