Minister for Transport & Tourism Leo Varadkar has said increasing income tax was one of a menu of options the Government is considering for the upcoming Budget, but one it hoped it would not have to pursue.

Speaking in Killarney, Mr Varadkar said there will be an adjustment of €3.6 billion in spending cuts and tax increases in the Budget.

Fianna Fáil Senator Thomas Byrne said the Government has completely reneged on previous commitments that it would not cut the welfare budget or increase income tax.

The EU/IMF memorandum of understanding commits the Government to raise at least €1.5bn in extra tax revenue.