Budget predicted to be easy on taxpayers

Charlie McCreevy today unveils Budget 2004, with tax cuts aimed at lower waged and significant increases in social welfare benefits, at a cost of €750m to the Exchequer.

The Exchequer, with a surplus of €842m in the year to November, has exceeded analyst expectations.

McCreevy is expected to increase tax credits for lower earners to benefit minimum wage earners on the €7 hourly rate.

It will also prevent many workers from shifting into the higher (42%) wage bracket.

The Minister will most likely raise money for these measures by Government borrowing rather than VAT and excise duty increases, except for petrol, diesel and cigarettes.

A major five-year capital investment programme in transport, primary schools and other areas is also expected to form part of the Budget.

The full-year cost of this move would be around €320m and may preclude other moves by the Minister to widen the standard rate tax band for the second year in a row.

The Minister's speech to the Dáil is due to begin at 3.45pm.