The Budget will use a combination of spending cuts and limited taxation measures to reduce overall expenditure by €4 billion, the Minister for Communications, Energy and Natural Resources Eamon Ryan said this morning.
Among the taxation measures will be the introduction of a carbon tax, he said.
"Most of the emphasis is going to be on the spending side but we'll have to do further tax broadening measures," said Mr Ryan,
The Government is aiming for a budget deficit of 10.75 per cent of GDP this year and next, proportionately the worst in the euro zone and more than three times the EU's 3 per cent limit.
Taoiseach Brian Cowen signalled over the weekend the Government would not introduce a slew of new taxes in December despite recommendations from the Government-appointed Commission on Taxation earlier this month
Mr Ryan said a carbon tax would definitely be introduced in December but most of the Commission's other recommendations would take several years to examine with no decision yet on water charges, taxation of child benefit or the idea of a new property tax.
"This taxation commission report is bringing us in the right direction, getting away from just taxing labour or relying on speculative taxes on land and property and spreading out our tax base," Mr Ryan told RTE's Morning Ireland.
"The commission itself recognises that implementing all its recommendations would take a number of years . . . but there's also a reality facing us that we do have a budget problem coming in December, and while most of the emphasis will have to be on the spending side, we are going to have to do further tax-broadening measures, so there will be measures introduced in this year's budget.
Last week, Minister for Finance Brian Lenihan said he was not planning to raise taxes in December's budget for 2010, apart from the possible introduction of the carbon tax, a long-held target of the Green Party.
Reuters