The Minister for Finance, Brian Cowen, has said that increasing public expenditure in 2008 at the same rates as he did in recent years would be very damaging for the economy and will not be accepted.
He said his ministerial colleagues would have to prioritise the spending programmes under their control.
Mr Cowen said the growth in public expenditure will be limited to 8% in 2008, down from 12% this year.
However, he said that spending on infrastructure will be increased by 12.5%.
The minister made his comments while giving the keynote speech to the Indecon Public Policy Lecture at The Royal Irish Academy today.
Mr Cowen also appeared to downplay any prospect that he would follow through on the commitment outlined in his Budget last year, to cut the top rate of income tax by 1% to 40%.
The minister said he made it clear at the time that the commitment to cut the top tax rate was contingent on the strength of the economy being maintained. He pointed that economic conditions since that time have softened.
Mr Cowen also said in his lecture that he would not consider any taxation proposals that might result in lower tax revenue for the Government.
He also said he would be following through on the proposals to increase vehicle registration tax and motor tax on cars with high carbon emissions.
