Lenihan warns of €3bn in cutbacks and tax increases

The Finance Minister Brian Lenihan has warned that cutbacks and tax rises are on the horizon.

Mr Lenihan said there will be €3bn worth of spending cuts this year.

In December's Budget, Mr Lenihan announced €1bn in pay cuts for public service workers, ranging from 5% for those on average pay to 15% for those at the most senior level.

Those who pay no tax are likely to bare the brunt of any changes to the taxation system.