Setting out the government's policy priorities last month, Cowen said in a keynote address to the Indecon Public Policy Lecture that he anticipated "a more difficult fiscal environment" next year compared with 2007.

"In a tighter economic environment it is unrealistic to expect the type of tax cuts which have been a feature of recent years," he remarked, according to national media reports

He added that only tax cuts "which are consistent with the prudent management of the economy" will be considered by the government.

In last year's budget, the Irish Finance Minister indicated that he would cut the top rate of income tax to 40%, but his more fiscally conservative comments last month suggested that these plans may have been shelved.

Commenting following the recent publication of the Receipts and Expenditure White Paper, which revealed that a continued economic slowdown is likely to squeeze tax receipts still further, Labour Finance spokesperson, Joan Burton told the Irish Times that:

"What is obvious from these figures is that the Minister is now finally acknowledging and admitting that there will be further flattening of the construction industry. The Minister must now make clear his priorities for next week's Budget."

She concluded: "It would have been preferable if the Minister and his department had been more forthcoming before the election on what the figures were really going to be like."