It claims it's going to stay in office until 2002, but the Government yesterday bought substantial insurance against an earlier election date. Key areas of political pressure have received substantial allocations in the spending Estimates. And we haven't yet seen the fourth tax-cutting budget.

The Government's own spending targets are being breached dramatically, of course, but in times of growth and inflation much higher than expected voters are unlikely to quibble about that. The Government is to spend 13 per cent more in 2001 than it did in 2000.

The most sensitive of political issues, the health service, is to receive a 19 per cent rise. Education also receives a big rise, with primary level getting 13 per cent, secondary 16 per cent and third level 23 per cent.

An increase of 38 per cent in the CIE subvention, a 71 per cent increase in capital spending on public transport and £100 million for Dublin's light rail will all serve to improve the creaking public transport infrastructure, particularly in Dublin. Total Government spending, for both current and capital purposes, will rise by 13 per cent.

And that's only the Estimates. We haven't seen the tax cuts, the pension rises, the childcare improvements and other measures yet.

After a ritual warning yesterday that he couldn't go mad altogether on budget day, Mr McCreevy went on to question whether tax cuts had much of an inflationary effect at all.

There is no expectation of an ultra-conservative budget. A reduction in the upper and lower tax rates is likely, together with some expansion of the bands, and further moves on Mr McCreevy's plan to "individualise" the standard-rate tax band. The increase of the old-age pension to over £100 a week will be a further politically sweet move.

Michael Noonan of Fine Gael complained about the breaching of Government spending targets and said: "The quality of public spending is now more important than the quantity . . . Pouring money into the same failed structures will not deliver the level and quality of services that the citizens of this Republic are entitled to expect."

The Government is on record as agreeing. Mr McCreevy said as much in colourful language last year. Asked then why the substantial increases in health spending had not always been seen to deliver improved services, he remarked that he had often wondered about this himself. Just last weekend the Tanaiste told her party conference that the current "value-for-money audit" of the health services was the way to go.

Yesterday's 19 per cent rise in the allocation to the health services shows that while such musing on the nature of health economics is all very well, the Government is happy to produce the cash when circumstances demand.

The unshakeable public perception that there is a deeply unequal two-tier health service demanded a political response. Funding of the health services has now risen by 80 per cent since the Government came to office in 1997. The regularly promised structural reform has yet to come.

Mr McCreevy again called for "effective management to ensure that increased resources lead to better services". As well as the sound policy reasons, there is an electoral imperative for this, too: massive spending doesn't increase public confidence in the health services. Only when people notice the reduction in waiting lists and improvement in services will the issue be resolved politically.

While there are dramatically increased allocations for capital spending on roads, railways and other infrastructural projects, Mr McCreevy admitted that some of these projects were moving slowly. It is further evidence that in boom time money alone is not enough to resolve political problems.

However, faced with a Government promising substantial increases in public spending, the Opposition last night attempted to change the question. Michael Noonan pointed to the breach of the Government's own targets, echoing the point sometimes favoured by Ministers that quality, not quantity of spending, was what counted.

The overshooting of its targets is certainly dramatic. In 1997 the Government promised an average rise in total net current expenditure of just 4 per cent, but so far it has given us 6 per cent and counting. The rise in 2001 is to be 10.9 per cent over what was spent in 2000. That's a full 13 per cent rise over what was estimated for 2000. And the total spent in 2001 will undoubtedly end up larger than that estimated yesterday.

The Government is in the happy position that this will not precipitate a crisis in the public finances. The budget surplus will be well over £2 billion at the end of the year. With economic growth running at record levels, the Government can afford to go over its spending limits, continue to pay off the national debt and cut taxes.

Mr McCreevy repeated his view yesterday that it was the value of the euro and the price of oil which were the main influencers of Irish inflation. Tax cuts and spending rises in a small open economy had relatively small effects on the figure, he said.

Fine Gael last night concentrated on the value-for-money issue, while Labour dismissed the Estimates as "an election splurge".

Labour didn't quibble with the size of the proposed spend for next year, acknowledging it was large but claiming it was a one-off gesture "by a Government desperate to redeem itself in the eyes of the electorate".

The party's finance spokesman, Mr Derek McDowell, made the point that despite recent fevered attacks on Labour's spending plans by the Government, the increase in spending was close to his party's estimate of what was necessary.

Mr McCreevy was in confident, relaxed mood yesterday as he announced his Estimates and delivered himself of various views on the economy and the nature of public spending. If he was "humiliated" - as Derek McDowell said he was by the Government's abandonment of his 1997 spending targets - there was little sign of it.

His next budget, on December 6th, may be his last of this Government. However, the change in the timing of the tax year means the next budget would take place in October 2001. Mr McCreevy could yet be around for that, but if he isn't, he has provided money to help resolve key political problems. The task for the Government now is to turn that money into results.