The news that the Minister for Finance, Mr McCreevy, plans to hold public spending this year to around his 4 per cent limit is good for the economy. While his base may well be far higher than many had anticipated through increases to this year's figures, the Cabinet's broad overall endorsement of the 4 per cent limit will mean it will be very difficult for line departments to press home their case for yet higher spending in future years.

With the Exchequer finances booming there was, of course, room for a real giveaway. But Mr McCreevy's accountant's instincts appeared to have held sway.

The mandarins at the Department of Finance will certainly be pleased. It used to be said that it often took them six months to convert a new minister to their spending control mantra, so they must have been working overtime in Mr McCreevy's case.

The Minister remains under considerable pressure to give away large scale tax concessions. The call by the Tanaiste, Ms Harney, for "payback time" for the PAYE sector shows the kind of demands which he is facing in Cabinet.

Mr McCreevy, though, has always been reluctant to fuel the fires of inflation. And the fact that they are mere embers now, does not mean he is willing to be the one who takes the chances of reigniting them.

If the indications are correct that his tax cutting package may amount to £350 or £400 million rather than the £500 million which many have been pressing for, then the Government's coffers will be in even better shape.

Of course, this is an early line and with Ms Harney pressing for substantial - or 2 percentage point - cuts in the top and standard tax rates, there are no guarantees. Simply to implement these two measures would cost the Exchequer £318 million, which would not leave much scope for widening bands or allowances, never mind introducing a new 20 per cent rate of tax.

Spending less on tax cuts and spending increases than many had thought, means Mr McCreevy will be in a position to build up the reserve fund or pay off even more of the national debt than has already been expected.

But there is another direction for the funds to go. As is very clear by now, the EU structural funds are going to start running down - the only question left now is how far and how fast.

While there is a danger that to set up a fund at this stage would queer our pitch when it comes to the next round of negotiations for what is left of the funds, even to have the money earmarked in some way would make a difference.

As the ESRI pointed out repeatedly in its mediumterm review, the one obstacle to our continuing growth is bottlenecks, particularly in infrastructure.

Ireland needs serious investment in the transport infrastructure of Dublin and Galway and indeed other major urban centres. Without this the cities will simply jam up and became far less attractive locations for investment.

The job of attracting skilled emigrants and other workers would also become much more difficult.

There is an urgent need to get the LUAS system off the ground. The public inquiry has already been halted pending the outcome of a new study into the underground option in Dublin's city centre. There is an argument that the £1 billion, which it appears the Central Bank has on top of its requirements following monetary union, could be used in this kind of a one-off way.

While some in the Department and indeed the Central Bank are happy to see the money remain on deposit, there are others who argue it could be used to pay off the national debt.

However, the third option of using it to purchase something the country would only otherwise aspire too also has its attractions. After all, if you win the lotto, most people's instincts would be to spend at least a portion of the money on something that you would only otherwise dream of.

There are also serious investment needs in both education and telecommunications. Even as Ennis has won the headlines for becoming the Information Age town, other parts of the State are badly in need of broad-band telecommunications and indeed even ISDN lines.

While private investment will be needed for much of the telecommunications investment, there is an argument for a partnership between Government and business. Certainly more deregulation will be needed to allow competition to persuade the companies to commit the necessary capital. British Telecom and the German telecommunications service are moving away from us and making broad bands very widely available. In the coming years more and more companies will be conducting commerce over telecommunications lines.

At the moment our high tech companies are well placed in Ireland, but as software is increasingly sold over the Internet the need for broad bands will become obvious.

Using some of our surplus money to invest in education would also be a far-sighted move. After all it is the decision of previous administrations to invest so much in our system that has partly fuelled our recent growth. Training in languages as well as further emphasis on computer science is needed. We will also need more technicians for industry. As the traditional assembly-line work diminishes, more people should be trained as technicians particularly in electronics.

Of course, these sort of investments cost serious money. But at a time when the Exchequer is booming beyond most people's wildest expectations, it is surely time to lay down the foundations of future growth.