Press conference: Minister for Finance Brian Cowen last night insisted that yesterday's Budget was not the start of the general election campaign.

The Minister also denied that the 9.9 per cent increase in Exchequer spending for 2006 was inflationary at a time when the economy was already booming and about to receive a further multi-billion euro injection of funds released from SSIAs (Special Savings Incentive Accounts).

He said measures such as the €1.12 billion welfare package, the childcare provisions and the initiative for the elderly had been included in the Budget by the Government as they were "the right things to do" .

He said the measures were socially progressive in that those on lower pay received proportionally greater benefit.

Mr Cowen described his Budget as sensible and responsible. He said the inflation rate in Ireland was in line with that in the euro area although the forecast for next year has been adjusted from 2.5 to 2.7 per cent.

Mr Cowen said the increases set out in the Estimates last month ran to about 6 per cent. The Budget welfare package - the largest increase of its kind to date - would account for about 3 per cent of the overall spending increase.

The Minister and officials from the Department of Finance also defended the decision not to introduce legislation to close some tax shelters until 2007.

Asked if he was stalling on the measure to protect wealthy friends of Fianna Fáil, the Minister simply answered "No".

Donal McNally, second secretary at the budget and economic division of the Department of Finance, said the legislation involved in dealing with tax shelters was complex and the department wanted to get it right.

Those with whom the legislation would be dealing were "very well advised".

Mr Cowen stressed that he had not introduced an election budget. He said there had been a 9 per cent increase in spending last year as well.

The Taoiseach had already made clear that there would be no election next year and the Government was "here to complete a five-year mandate".

Mr Cowen said the big news in the economy this year was the rate of employment creation. There were 71,000 new full-time jobs and 20,000 part-time posts.

The Government wanted to continue to expand the economy and enhance public infrastructure in a sustainable way.

It also wanted to see the third-level education sector become a driver of the economy.

The Minister said only about 50 artists claiming the current tax exemption would be affected by the Government's decision to abolish this measure for earnings above €250,000.

"I do agree with the philosophy behind the exemption and the protection of cultural life, but we have reached the point where the country is a different place than it was in 1962."

Mr Cowen said that the €250,000 earnings figure represented the point where originality and artistic endeavour intersected with the principle of equity.

He was also in favour of reform of the budgetary process and maintained that he was prepared to go before the Oireachtas Committee on Finance to discuss future proposals.

However Mr Cowen insisted the Government was still the Government and there was no way that an Oireachtas committee could have an executive role.

He said the childcare measures set out in the Budget, such as the income-tax disregard for childminders, grants for new facilities and additional maternity benefits, were aimed at increasing capacity in the sector while reducing demand by allowing mothers to remain at home for longer.

"We are trying to increase options for families and not adopt a one-size-fits-all approach," he said.