This year’s budget adjustment will be less than the expected €2.1 billion, Minister for Finance Michael Noonan has said.

Mr Noonan’s comments come after exchequer numbers yesterday showed tax revenue running nearly €1 billion ahead of target.

The Minister said this year's budget deficit target of 4.8 per cent will be exceeded but he added that Ireland still needed to reduce its borrowing.

"We're still borrowing €800 million a month and we have to get our borrowing down and the way you do that is by reducing the deficit," he told RTÉ.

“Our objective is to get the deficit under 3 per cent and that required an adjustment of €2 billion. We’re still doing the adjustment of €2 billion, except the extra €1 billion yesterday now will be put into the pool to get the deficit down.”

Mr Noonan said the Government was looking at the tax rate and the Universal Social Charge and indicated tax relief could come in at the point where single tax payers start paying the high rate of tax—€32,800.

The Minister said the Government needed to avoid past mistakes of excessive tax cuts and spending increases and warned “if we are going to give additional relief beyond the adjustment that we are making that might require extra taxes”.

Earlier, Tánaiste and Labour Party leader Joan Burton said the Government is not in a position to reverse cuts made to social welfare in previous budgets.

Ms Burton, who is also Minister for Social Protection, said the Coalition was aiming to “cement the recovery” and do what it could to help middle and low income families.

“We are not going to be able to meet everybody’s pent up expectations all in one budget,” she said.

Asked on RTÉ’s Morning Ireland if cuts to social welfare would be reversed, Ms Burton said the basic rates had been maintained and she did not foresee any further reductions at this point in time.

The growing numbers of people going back to work and leaving the live register meant the total cost to the State of the social welfare bill had been reduced, she added.

However, when pressed on whether or not the cuts made in previous budgets would be reversed Ms Burton said: “We are not in a position as yet to do that”.

She said she had agreed with Taoiseach Enda Kenny in July that whatever relief was available would be targeted towards people on low and middle incomes.

They had agreed to be “careful” in their approach to budgetary matters.

Ms Burton said investment in housing would be a key part of the Government’s approach.

There would be a fresh programme to build new houses, along with a determination to see older stock refurbished.

She said the best way to deal with a property bubble was to increase the supply of social and affordable housing.