Significant increases in income-tax allowances aimed at boosting low earners' take-home pay and encouraging married women to return to the workforce will be among the main features of tomorrow's Budget.
A key element of the package to encourage married women to return to employment will be a substantial rise in the annual PAYE tax credit - an amount deducted from the tax bill of everyone on the PAYE system - from £1,000 to around £1,600. This credit will benefit anyone in the PAYE system, no matter what allowances are already claimed by a working spouse.
Responding partly to demands from the Irish Congress of Trade Unions, the Government will move to ease the burden on taxpayers and ensure that fewer pay at the top rate by increasing allowances.
However, the Minister for Finance, Mr McCreevy, is also expected to take one percentage point off the top 46 per cent income tax rate and the same off the lower 24 per cent rate.
Mr McCreevy will put the final proposals to Cabinet this morning. His speech will allude to the need to avoid overheating in the economy, but still provide around £800 million in tax reductions, together with generous increases in social welfare spending, the most generous package of recent years.
The main personal income tax credits - currently £4,200 for a single person - are also likely to be raised significantly, by up to £800 a year. Together with the increased PAYE credit this will take many people out of the tax net altogether and also mean that fewer pay at the top tax rate.
The standard-rate tax band will also be widened but not by as much, a rise of up to £500 is likely. This is because it is only those on the higher rate of tax who benefit from widening the standard rate.
There will also be specific measures to reform capital acquisitions tax. Huge house-price increases in recent years have led in some instances to very large inheritance tax bills.
Tobacco taxes are likely to rise, with the Minister for Health, Mr Cowen, indicating that he would like to see a 50p increase on a packet of 20 cigarettes
The childcare package will mainly focus on the provision of services, with further incentives to build and run creches, including encouraging employers to do so. In addition there will be substantial increases in child benefit of at least £10.