The Government is to bring out a three- to four-year plan, sometime in October, that would show what kind of expenditure cuts and tax increases will be required from the start of 2012 until the deficit target of less than 3% of GDP in 2015 is reached.

Minister for Finance Michael Noonan said the Government hoped that by 2014 most of the pain will have been endured and Ireland will have a strongly growing economy again - with people going back to work.

Speaking from Fine Gael's parliamentary party meeting in Galway, he said it was important that people had certainty so they can make decisions.

He said there were quite a lot of savings in the economy - and he said if people had certainty they would be in a better position to know if they could do the kind of purchasing that they need to do in their personal lives.

Mr Noonan said that there are a lot of people in their 30s who are putting off buying houses but have quite significant savings.

He said that those people do not know whether they are at the bottom of the market and they do not know what kind of charges will be imposed on them.

The minister said that the Government would hope to clarify all of this in October in a three- to four-year plan - and then be more specific in the Budget, which would be introduced in very early December.

'No soft options'

Mr Noonan said the Government would probably have to mark down growth rates for 2012, which, he said, would make the forthcoming Budget more difficult.

He mentioned as positives the interest rate reduction on Ireland’s bailout loans, and the fact that the bank restructuring was costing a lot less than had been thought.

But he said that on the downside the international situation was now running against us.

He said there were no soft options and he said that it is better that everybody in the principal Government party are fully aware of the kind of decisions that have to be taken in the Budget and for the next few years.

In relation to the advice from the ESRI today - that the Government should go further than the €3.5bn already committed to in the Budget, and instead look for tax increases or savings closer to €4bn - Michael Noonan said the target they were working with, and which was agreed with the European authorities - was a deficit of 8.6% of GDP.

He said that it may take more than €3.6bn to get to that. He said he was not in a position to give a definite figure.

Mr Noonan said that last June he said they might have to go somewhere between €3.6bn and €4bn to arrive at the 8.6% figure. He said that was still the position.

But he said that whether they would go further - as a matter of policy - to inspire greater confidence both domestically, and with the international community, was a matter of judgment.

He said that on the one hand you would balance the demand you would be taking out of the domestic economy against any kind of confidence boost you might get by going harder than those numbers would suggest.

And he said it was something he was thinking about but he certainly had not made up his mind on it just yet.

State assets

Regarding the disposal of State assets, Mr Noonan said that the responsibility for that was on Brendan Howlin's side of the Department.

He said that Mr Howlin would be bringing forward proposals to Government very shortly.

Mr Noonan said that the commitment in the Programme for Government was a disposal of assets amounting to €2bn.

But he said that would not include the disposal of assets in NAMA, the banks or any tranche of shares in the banks which the State owns.

He said that he was aware that the Government did not want to sell at the bottom of the market, saying that there would be no fire sales.

Mr Noonan said that neither party was approaching the issue on an ideological basis.

He said they hoped that the European authorities would allow them to invest some of the proceeds in capital projects for job-creation purposes.