Taoiseach Brian Cowen has predicted a 10% drop in living standards over the next two years.
The Taoiseach summed up the scale of the country's economic difficulties by saying that our living standards are based on revenue we had six years ago.
Mr Cowen was speaking after the Cabinet met yesterday for further discussion on measures to be included in next month's supplementary Budget.
Mr Cowen said the Government would try to be fair and was seeking to get the right balance between expenditure cuts and increased taxation.
He added that the model of taxation would have to be adapted to suit the new circumstances.
