Taoiseach Enda Kenny has warned that "unpalatable choices" have to be made if the Government is to achieve savings of €3.8 billion next year.
Speaking in Cork this evening, Mr Kenny said the country faces "an enormous challenge" in facing up to the economic crisis but added that the Cabinet has not yet signed off on the Budget.
"We have fixed goal posts in the sense of the requirement to…take €3.8bn out of the economy next year," he said.
"The choices are unpalatable. But I can tell you that we haven't signed off finally on the details of this yet. I have to say that the discussions around the Cabinet table have been very pragmatic and very realistic."
Commenting on the contents of a report from the Irish Taxation Institute today which said the take home pay of an average Irish family has been cut by as much as €600 a month, Mr Kenny said: "You don't need a report from the Irish Taxation Institute (ITI) to know that – you can feel it every day in politics."
"With over 400,000 people on the live register, people in distress over their mortgages, rising charges and the impact of all of them. But we have got to deal with our problems ourselves."
Mr Kenny acknowledged comments made earlier today by Minister for Social Protection Joan Burton who hinted that people on high salaries and pensions could be facing increases in taxation in next month's budget.
"In respect of Minister Burton's comments and comments from any other minister, these are all part of the discussions that take place around government," he said.
The Taoiseach said decisions on the issues raised by Ms Burton would be made in the coming days.
"That is a revenue matter and obviously we have to deal with expenditure adjustments as part of the budget which are the concern of every minister. It is in those areas that we have to make decisions over the next week or so."
"Obviously these are all matters to be discussed but were you to adopt a range of these you have to make pretty serious administrative changes with the revenue commissioners in order to implement them. But all of those things are being discussed – what you mentioned is a revenue issue not just an expenditure issue."
