The Cabinet met today at Farmleigh House in the Phoenix Park, Dublin, with ministers discussing how to achieve €3 billion in savings in the next budget.
Speaking after the meeting Taoiseach Brian Cowen said the Cabinet was “predominantly looking at adjustments on the expenditure side.
“I think it is important to point out that domestic consumer spending is an important part of generating growth in the economy.
“People increasingly are recognising the confidence building measures we are bringing forward particularly in relation to rectifying the public finances…that’s a crucial part of the recovery of the economy.
“Obviously in coming months, in preparations for budgets and the autumn term, be looking at various initiatives in that area.
“At the end of the day it will be a matter for the Minister for Finance to decide on any taxation matters in any budgetary situation,” Mr Cowen added.
Minister for Justice Dermot Ahern said it had been a long day and no decisions had been reached.
“We’ll be looking at the entire issue between now and the budget which is in December so we were just sort of scoping out the situation that we find ourselves in," he said.
“I think the €3 billion is well known that we’re looking at the issue of capital of €1 billion and then obviously €2 billion...I think there’s an acceptance that the economic situation while difficult, we’ve reached the bottom and that there are hopeful signs and obviously we have to build on that and we have to give people confidence.
“I think when you see the level of savings in our situation, where the level of savings have gone up from about four per cent to somewhere about 12 per cent, people are saving their money. So what we really need to do as a nation is to try to get those people who are saving their money to spend their money in the economy.
“You have seen that in some areas like in the motor industry and some other areas, some areas in the retail where there has been significant increase,” he added.
Before the meeting Minister for Foreign Affairs Micheál Martin said: “Every year we have to work hard on the budget and without question there are a range of options that will be put before us today.
“We’ve already been engaged with the Department of Finance, every department has, identifying savings and areas where we can save money and we will continue that exercise today and over the coming weeks.”
Asked if he was expecting a tough day, Minister for Communications Eamon Ryan said "We'll get there."
Officials from all departments have submitted documents outlining a series of options to save money, following an instruction from the Department of Finance. Each department is understood to have been given an individual savings target and a confidential budget strategy memo has been circulated among Ministers.
At the meeting, the Cabinet will also sign off on the €40 billion five-year capital spending programme.
Minister for Tourism, Sport and Culture Mary Hanafin said: “Well it’s an important day in the whole budgetary process because it’s too early yet to start making decisions but obviously we have to ensure that we take the overall economic situation into account while at the same time ensuring that we create employment.