The final Cabinet meeting before the summer break takes place today against the backdrop of increasing concern about the state of the public finances.
With some 50 items on the agenda, ministers will be briefed by the Taoiseach, Mr Ahern, and the Minister for Finance, Mr McCreevy, on projections that point to only a minimal increase in Government expenditure next year.
While many Government Departments have managed to stay within their budgets this year, Mr Ahern is expected to warn ministers against complacency.
With the Budget estimates campaign between Departments competing for funds well under way, Mr McCreevy is expected to place a limit of 7 per cent on the expenditure increase next year.
The discussion is likely to focus on the amount of borrowing required to fund capital expenditure.
While Mr McCreevy has already forecast an increase to 1.2 per cent next year in the general budget balance as a percentage of GDP, from 0.7 per cent this year, the deterioration in the public finances suggests he will have to increase that projection.
Senior ministers have effectively ruled out an increase in income tax, or restrictions to the special saving incentive scheme, or a reduction in the Government contribution to the national pension fund.
The all-day meeting at Government Buildings will conclude with a dinner for Cabinet members this evening. The Cabinet will not meet again until September 3rd.
The Minister for Health, Mr Martin, will brief Cabinet colleagues on an application by the VHI for an 8.5 per cent increase in premiums. The deadline for Mr Martin to veto the rise is Friday.
The VHI company's annual report, which will be presented to the Cabinet, shows it made a profit of about €40 million last year.
But while some Government figures are concerned about granting an increase to a company that is in a sound financial position, some informed sources said a move to veto the rise would only postpone a steeper rise in premiums later on.
Mr Martin, who has indicated a favourable stance on the application, met last night with the VHI chairman, Mr Derry Hussey.
In addition, Mr Martin will seek Cabinet approval for a report on medical manpower by the Hanly review group, which has proposed the downgrading of some regional hospitals and a renegotiation of the consultants' contract. Other major items for Government decision today include a proposal by the Minister for Justice, Mr McDowell, for a major reform of the Garda, the biggest since the force was established.
While the plan includes proposals to establish an independent Garda inspectorate, the Government is not expected to publish the proposals until next week.
There will also be a briefing by the Minister of State for Europe, Mr Dick Roche, on the Government's plans for Ireland's six-month presidency of the EU, beginning next January.
As part of those preparations, Mr Ahern travelled to Madrid yesterday to meet the Spanish Prime Minister, Mr José María Aznar.
Mr Ahern told a press conference that Spain supported Ireland's call for retention of the national veto on taxation in the European Union.
