Although the government faces a general election in 2002 Mr McCreevy has had to cut expenditure in many departments - but this allows him to spend more on vote-winning measures in health, education and social welfare.

Pouncing on figures for reduced capital investment, the Opposition immediately claimed that the Government's vaunted National Development Plan had been virtually shelved. Capital investment is to rise less than 5%, compared with a 9% rise in departmental running costs. Last year's growth in GDP was over 10%, but this is expected to fall to below 5% in the current period, and may be as low as 2% next year (2002-03).

In answer to Opposition attacks, Mr McCreevy said he couldn't spend money he didn't have, but that he would be announcing some new spending projects in the Budget. He also pointed to a 13% rise in spending on health and education, including the employment of nearly 4,000 more professionals in the two sectors, and said that capital expenditure in these two sectors would actually rise by 30% and 16% respectively as the construction of new hospitals and roads was cranked up.