With Budget week almost upon us, speculation is mounting about who will benefit from the "give-aways". No doubt the Fianna Fail/Progressive Democrat coalition will try to do like every Government does and come up with a package that keeps everyone happy. But there are signs that the prudence may be one of the hallmarks of Charlie McCreevy's first package.

In a speech made on the night the estimates were presented, the Taoiseach, Mr Ahern, gave one clear signal. He said that "current economic conditions are better than normal, and the case for running a Budget surplus in these favourable circumstances is compelling. The medium-term outlook for the economy also points to the need to run Budget surpluses now."

The Taoiseach went on to point to the run-down of EU funds after 1999, after which the economy will still have major investment needs. Also, we will have to adhere to the fiscal disciplines of monetary union, due to commence on January 1st, 1999.

The Taoiseach continues: "This underlined the need to adopt more ambitious budgetary targets now, in order to allow us to address our future needs from a position of financial strength."

Now figures to be published tomorrow will show that Mr McCreevy has considerable room for manoeuvre. Before he even stands up on Budget day, he will probably have an overall Budget surplus of £550 million to £700 million.

This means that he can still afford to increase spending on Budget day by £150 million plus, give £350 million in 1998 terms in tax reductions and still bring in a healthy surplus for 1998. He will be helped by this by the fact that tax "give-aways" and extra spending in themselves lead to tax buoyancy.

Overall the Minister may well be able to announce that he is aiming for an overall Budget surplus of £200 million plus. In the light of the very arguments made by the Taoiseach, anything less would be imprudent.