SIGNIFICANT CHANGES in the Government's budgetary policy are expected following the publication this week of exchequer returns for the first half of the year.
The Cabinet meets tomorrow when there will be some preliminary discussion, although Ministers will not have advance details of the six-monthly figures.
The social partnership talks at Government Buildings are due to discuss the issue of pay on Wednesday, the same day that the exchequer figures are released.
The Government side in the talks is expected to use the newly-released data to highlight the need for pay restraint. However, it is thought unlikely any re-ordering of priorities in the public finances will be announced immediately after the figures are announced.
Opposition pressure on the Government is mounting, with Fine Gael's Richard Bruton demanding that the proposed ministerial pay rises be cancelled "immediately". Labour's Joan Burton said the increases meant the Government had "no moral authority".
Meanwhile, Gross National Product (GNP) figures for the first quarter of this year will be released today and, if they show a decline, this will mean the economy is technically in recession. The volume of GNP fell by 2.2 per cent in the fourth quarter of last year and a fall in two consecutive quarters meets the standard recession definition.
Speaking to reporters at New Ross, Co Wexford yesterday, Minister for Finance Brian Lenihan said it was "a well-known fact" that there was a drop in revenue, but stressed that this would require "savings" rather than cutbacks.
The Minister, who was attending the unveiling of a sculpture of the late US president John F Kennedy, said the Government would give "a clear lead".
Referring to the pay talks, Mr Lenihan said that, "everyone involved in social partnership has to reflect on the economic realities".
Asked if he was worried by the impending fall in revenue, Mr Lenihan replied: "That's in the public domain - that there has been a drop in revenue this year, and clearly on Wednesday we'll have a clearer picture of what the mid-year position is."
Asked about the possibility of cutbacks, the Minister said: "I think the word is savings, and of course if we don't start making savings this year we won't make progress for the inevitable work that has to be done next year."