New figures from the Department of Finance show that the Government is expected to take in €1.1bn less in taxes next year than it did this year due to the continuing economic recession.

Minister for Finance Brian Lenihan will have up to €10bn less in taxes in 2009 than he was expecting only 12 months ago.

Unless Minister Lenihan raises taxes or cuts spending further in the budget, he will have to borrow €15bn to run the country next year.

These figures are contained in the Estimates of Receipts & Expenditure for 2009.

After allowing for cuts in non-pay expenditure in all Government departments, the general Government deficit will be as high as 7% of GDP, before any changes to social welfare payments and tax rates are announced in next Tuesday's budget.

This is one of the largest fiscal deficits in the industrialised world.

Today's figures show that the Minister already plans to restrict the growth in net current spending by all Government departments to 2.5%.

Nearly two-thirds of the increase in departmental spending is a provision for a rise in the number of people claiming unemployment benefits and related social welfare payments.

Non-pay spending by all Government departments is to be cut.

In addition the Minister has decided to scale back on net capital spending on infrastructure by 9% or €760m.

€50m of these savings will be delivered as a result of a decision to postpone the Government's decentralisation programme.

The figures have been described as the worst set of pre-budget figures published by the Government since the 1980s.

Ministers protecting departments

Minister for Agriculture Brendan Smith has said tough and very severe decisions have been made by the Cabinet about the budget for 2009.

Speaking on RTÉ Radio One, Minister Smith said the decisions taken were very responsible and very balanced.

He described the mood at the pre-budget cabinet meetings as business like and said ministers were protecting their own departments.

Minister Smith said the figures published today showed a big contraction in economic activity and in the revenue available to the Government and he said that has put particular pressure on every government department.

He denied that the Government did not do enough when it announced a series of cutbacks in July.

Minister Smith said one of the reasons the budget has been brought forward is to send out a clear message to the international community that Ireland will take the decisions necessary.

Click here for the Estimates of Receipts & Expenditure for 2009