Minister for Finance Michael Noonan has said the adjustment in the Budget will be "somewhat less than €3.1 billion".

He was speaking after the latest Exchequer returns showed the State's tax revenues are on target, while spending is running below expectations.

Mr Noonan said the Budget targets were to reach an Exchequer deficit of 5.1% of GDP next year and to achieve a small primary budget surplus, which is a surplus of income over spending before debt interest costs are taken into account.

He said these targets should be achievable with an adjustment of slightly less than €3.1 billion.

Minister for Public Expenditure and Reform Brendan Howlin said spending in the year to date is 2.7% below target, indicating the discipline required to meet spending targets was being maintained.

Mr Howlin said he expects it to be followed through to the end of the year.

He said that in bilateral negotiations with ministers from spending departments it was obvious that every €1 million cut had implications for programmes and services.

The Exchequer returns show the State took in €26.886 billion in the first nine months of the year, which is €4 million more than anticipated and 3% higher than the same period of 2012.

Government spending is down almost 5%.

VAT receipts bounced back strongly in September, running 5.2% or €80 million ahead of target for the month.

This was helped by the upsurge in car sales from the new 132 plates in July and August.

However, the VAT take for the year remains just under 2% lower than target.

This was made up for by better-than-expected corporation tax returns this year, with €2.63 billion taken in compared to a target of €2.39 billion.

Spending is also under control, with total spending for the year to date running 2.7% below target.

The returns show €9 million in Local Property Tax came in during September, bringing the total for the year to date to €200 million.

The deficit at the end of September was €7.1 billion, an improvement of almost €4 billion compared with this time last year.

There was an Exchequer surplus of €192 million for the month of September.