The Government will have a “fiscal space of €12 billion’’ if it is returned to power, Minister for Public Expenditure Brendan Howlin has said.

Denying that it was making excessive election promises, Mr Howlin said there was an initial fiscal space of €8.6 billion and, added to that, there was the balanced budget requirement of 0.5 per cent, allowing for an extra €1.4 billion.

“That brings it up to €10 billion, and the indexation of taxation will provide another €2 billion,’’ he added. “So the figures, confirmed by the Department of Finance and given to all the parties, is €12 billion, and I believe we should work on that.’’

Mr Howlin was speaking to journalists on Saturday at the Labour party conference in Mullingar.

He said the party would publish a detailed election manifesto in the next week which would be costed.

“People will want to know, in very clear detail, that what is on offer is affordable and can be provided for in the horizon of finances independently validated by the department,’’ he added.

Mr Howlin said €3 billion would be invested to fund the plan set out on the Universal Social Charge (USC) plan to give a real break to low and middle income earners in particular.

The remaining €9 billion would be invested in areas like health, education and childcare, he added.