MINISTER FOR Finance Brian Lenihan has categorically ruled out a supplementary budget or any additional increases in taxes during 2009.
He said yesterday there was "no question" of him introducing a supplementary budget to compensate for revenue shortfalls.
There has been increasing speculation that a "mini-budget" would be necessary next year to raise taxes in the event of a deeper deterioration of the economy.
Some forecasts predict a 4 per cent decrease in gross domestic product next year, a much sharper fall than has been predicted by the Department of Finance.
Mr Lenihan, who was speaking in the Dáil, said last month's Budget had increased the tax burden for 2009 considerably. He argued that, as a result, no additional taxes could be imposed on income, goods or services.
"An additional €2 billion in tax will be levied next year," he said. "Accordingly, an additional supplementary budget next year levying further taxation would in all probability inflict further damage on the economy."
He said that most of Ireland's discretionary taxes - including those imposed on houses, goods, alcohol and cigarettes - were "seriously down" in 2008.
"Increases in those taxes would not lead to any increased income for the State. The only option for the State in terms of further increases in taxation is increased taxation on income.
"Increases on income, above and beyond the levy proposed in the Finance Bill, would amount to a substantial disincentive to labour in the year ahead," he said.
If there was a deterioration in the public finances, he added, he would bring appropriate proposals to Government to address that. That was taken to mean further cuts in public sector spending.
Mr Lenihan was responding to questions about the forecasts made in the Budget and if they had been affected by the October exchequer returns this week, which showed further drops in State revenue.
Fine Gael's deputy spokesman on finance Kieran O'Donnell said the Minister's assumptions did not correspond with the opinion of many economic commentators, including Fás and the ESRI.
"Several economic commentators have predicted there will be a decrease in tax receipts of the order of 9 per cent," he said.
Mr O'Donnell called for the introduction of a supplementary budget as a matter of urgency. He claimed that otherwise the Government would introduce stealth taxes that would be highly unfair to the public.
