A call from a leading economist for promised tax cuts in the 1999 Budget to be abandoned because they may cause the economy to overheat has been strongly rejected by the trade union movement.

Reacting to an RTE television interview from UCD economist, Professor Brendan Walsh, the general secretary of the Irish Congress of Trade Unions (ICTU), Mr Peter Cassells, said the Government must keep its commitments on tax cuts.

Prof Walsh said that a budget next year which includes tax cuts might be not be "appropriate" economically, because the economy was already growing strongly.

Mr Cassells said he agreed that next year's Budget should not give tax cuts to the well-off, but people on lower incomes should have their tax burden lessened.

Professor Walsh said there are indications of wage pressures in the economy at present, caused by labour shortages.

He said that with interest rates cuts on the way due to EMU, the Minister for Finance, Mr McCreevy, should introduce a "cautious" budget next year.

Mr Cassells said any inflationary pressures were created in the last budget when wealthy people were given too many benefits.

Prof Walsh told RTE the risk in overheating the economy is that it would result in a "hard landing" for everybody.

He said despite the recent phase of growth, the "required structural changes" have not been made. He said "sustainable growth rates of 4 to 4 1/2 per cent are preferable" to the very high rates of recent years.

Meanwhile SIPTU President Mr Jimmy Somers, said in a statement that the upcoming Budget must be used to address outstanding commitments in respect of increased personal allowances, the expansion of the standard rate tax band and increasing the exemption limit.