The Taoiseach has said the forthcoming Budget will be designed to prevent the economy overheating. Tax cuts would be balanced against the need to curb inflation.
Mr Ahern said the Government would employ tax-cutting measures to increase the wages of lower-income earners instead of offering pay rises, which could have a detrimental effect on the national economy.
He said the State would record a 10 per cent growth rate this year and the likelihood was that in the coming year growth would be sustained at 7 per cent.
However, because of the possibility of overheating the economy, careful measures would have to be taken to deal with tax cuts.
Mr Ahern said suggestions that the tax cuts might exceed the £520 million offered in the 1998 Budget could not be confirmed.
However, he indicated that the third-quarter economic figures, to be produced at the end of next week, might serve as an indicator of how the Budget would be framed.
"We are likely to target those on low to middle incomes through any tax measures we adopt. Every independent economic group, from the ESRI to the OECD and the EU, is warning us not to over-stimulate the economy."
Mr Ahern added that the current claim by nurses did not represent a new wage claim. The claim would have to be put through the framework of Partnership 2000 and this was the forum through which any negotiations should take place.