Minister for Finance Brian Lenihan has said there were clear signs of hope even in this time of crisis.

He made the comments in the Dáil as he announced the €6bn adjustment to public spending next year.

Mr Lenihan said his Budget was a 'substantial down payment on the journey back to economic health.'

Among the measures are a 4% decrease in non-pension social welfare payments, cuts in pay for top politicians, and a reduction in public service pensions.

Brian Lenihan told the Dáil the economy was returning to growth after a deep and prolonged recession, but that the gap between Government income and expenditure must be closed.

Pensions are untouched, but other welfare payments will be cut by 4%, and child benefit is reduced by €10.

€200m will create an extra 15,000 internship and work placement programmes, and another €14m will fund extra fuel allowance payments.

Civil service pay will not be cut, however the minister warned that savings will have to be delivered under the Croke Park Agreement.

The Taoiseach's pay will be cut by €14,000, and ministers by €10,000. The Government wants a salary cap of €250,000 on all salaries in the public sector and State agencies.

Public service pensions will be cut by an average of 4%, the employee PRSI ceiling is removed, the value of tax bands and credits will be reduced by 10%, and pension contributions will be subject to PRSI and the Universal Social Charge.

Stamp Duty is being cut to 1% on transactions up to €1m, and 2% over that, and it will apply to new and old houses.

DIRT goes up by 2%. The €10 travel tax drops to €3.

Petrol goes up by 4c/litre, and diesel by 2c/litre from midnight.

Online betting will be subject to the same betting duty as in bookie shops.

Mr Lenihan said under his proposals everybody pays, and those who can pay most will pay most.

Traumatic time for citizens

The Finance Minister told the Dáil this has been a traumatic and worrying time for the citizens of this country.

In his opening speech on Budget 2011, he said that amid the turmoil in the financial sector, it is easy to lose sight of the fact that economic activity has stabilised.

From a drop of 7.6% in 2009, GDP will record a small increase this year.

Mr Lenihan said economic recovery was beginning to take shape which as expected is export led.

Agriculture and agri food have strengthened recovery.

Domestic demand remains weak as households and businesses continue to work off the excesses of the boom, the minister added.

There are signs that conditions in the labour market are beginning to stabilise.

The Live Register has fallen for the third month in a row, the first since 2007.

Redundancies in the last three months were over 30% lower than in the same period last year, Mr Lenihan said.

Indications of Budget approval

There are indications that despite the painful measures contained in the package, it will secure Dáil approval.

Fianna Fáil TD Noel O'Flynn said that no budget that takes money away from people is pleasant but the Budget is very important and the Government side will vote for it.

Mr O'Flynn said the Opposition is hoping and praying that it will go through.

Labour's Joan Burton said there is a lot of trepidation about the Budget for ordinary families and that cuts today will 'simply go to the banks'.

She said it was obvious from the demeanour of independent deputies that they would support the Budget.

Fine Gael's Padraic McCormack said the Government has the numbers to pass the Budget but it will slow up the country.

He added that the finances of the State have to be brought into order.