The Minister for Finance, Mr McCreevy, has hinted at significant tax concessions in the December Budget.

Speaking at the launch of the National Treasury Management Agency's annual report yesterday, Mr McCreevy said the £350 million (€444 million) in tax concessions which he mentioned at a Cabinet meeting was very provisional.

"I was a bit amazed at comments in newspapers over last weekend. The taxation issue took about 50 seconds. I usually put forward some provisional figure. Over the last two years it was considerably lower than £350 million and we know where we ended up." Last year the total tax package came to some £581 million.

Mr McCreevy insisted that no row existed between Fianna Fail and the Progressive Democrats over the issue and added that no decision had been made.

However, he said he could not be more specific as the decisions involved are never made until not long before the Budget. "We also have to remember that the Budget will have an impact on the next partnership agreement," he added.

But overall he was very optimistic. "The economy is doing so well that we can run budgetary surpluses, have significant tax reductions, as well as fund the national development plan."

Precise expenditure at Budget time, he added, "also depends on how the economic situation is at that time and my assessment of how it will be next year".

The Minister hinted at considerable further changes to general pensions provision. He said making pension provision compulsory for private companies might be considered - although that was a "personal view".

He added that at the end of 1998 the debt to GDP ratio was 52 per cent and it will be 49 per cent or 50 per cent at the end of 1999. According to NTMA chief executive, Dr Michael Somers, the ratio would be 46 per cent at the end of this year, except for the impact of the bond exchange programme which added about £2.7 billion to the debt.

He added that last year Exchequer debts-service costs came in £222 million below the Budget estimate, with savings of £56 million against an externally-audited benchmark.

According to NTMA director, Mr Paul Sullivan, the buoyancy of the Exchequer revenues meant more cash on deposit and thus less borrowing had to be done than predicted.

The agency also made significant gains on foreign exchange transactions and some £110 million on currency swaps when it sold before the decline in the value of the euro.

Mr McCreevy underlined his preference for giving the NTMA responsibility for the management of at least some of the new pension fund being set up to help meet the costs of the State's massive future pensions bill. The fund will be the biggest in the State.

Mr McCreevy said it will have about £4 billion to £5 billion to invest within two years. That will be made up of £1.1 billion, derived from 1 per cent of GNP in both years, as well as significant proceeds from the flotation of Telecom Eireann.

"We have a chance to do something that other generations could not even think of. But even this size of investment means that the fund will only provide for 30 per cent of pension needs in 50 years' time. Around 3.45 per cent of GNP would need to be set aside every year to make full provision. The fund should also be allowed to grow for a period without it being dipped into until at least 2012 or 2015," he said.