Minister for Finance Brian Lenihan has said there will be no new taxes in the forthcoming Budget - apart from a carbon tax.
He said that two thirds of Government expenditure is on salaries and social welfare and that is where the cuts will have to be.
The minister was speaking before addressing the Leinster Society of Chartered Accountants pre-Budget lunch.
He said the Government will talk to the social partners and the Opposition but there may come a point where Government has to take decisions on its own and will do so for the sake of the country.
He also said that the Government had listened to the unions' analysis of the situation.
Mr Lenihan said it was important for people to understand that the adjustments in spending have nothing to do with the banking crisis.
He said the adjustments were due to the gap between receipts and expenditure.
Ireland is currently borrowing 12% of its annual wealth and if nothing is done the country would be borrowing 14 to 15% its annual wealth next year, according to the Minister.
He said that is not sustainable and that we have to stabilise the deficit.
