INTENSIVE negotiations between the Government parties are to recommence next week to agree on the Budget, which will be presented as one to tackle unemployment.
Progress is thought to have been made on agreeing the central elements of the package, although a key difficulty remains in paying for measures aimed at tackling long-term unemployment.
The Department of Finance is thought to have warned that the scope for tax and other concessions is limited.
Most private sector forecasters have estimated that a tax package of £200 million will be possible in the Department of Finance is understood to have argued initially that not much more than £100 million could be spent on tax reductions.
There are now indications that more money may be found for tax and PRSI relief.
This will allow an extension of the standard rate income tax band and an increase in the £50 PRSI allowance introduced last year, and increases ahead of inflation in other allowances.
New reliefs to employers' PRSI re also under discussion, as is lower corporation tax either through a cut in the standard 38 per cent rate or a special rate for small service sector companies.
There is little room for manoeuvre on the spending side.
The Government has already agreed a spending cap for 1996, which will allow around £100 million to be spent on Budget Day.
Outline agreement was reached before Christmas to allocate £80 million to social welfare and the bulk of the rest of the measures to tackle long-term unemployment.
The Minister for Social Welfare Mr De Rossa, is arguing that he should be allocated considerably more, according to some sources.
The Minister for Enterprise and Employment, Mr Richard Bruton and Mr De Rossa have both put forward proposals to tackle unemployment and are understood to have made progress in marrying the two plans.
Mr Bruton's proposals call for the exemption of incomes below £75 per week from tax and PRSI, reductions in employers PRSI, reforms to the social welfare code and an £80 subsidy for an employer taking on a long-term unemployed person.
Mr De Rossa's plan is thought to includes Democratic Left's proposals to target areas of urban deprivation, as well as reforms to the welfare code.
Sources say that final agreement on the package is likely towards the end of next week, probably following a meeting of the three party leaders.
It is not clear what level of exchequer borrowing is to be aimed for in the Budget, although the Government will want to keep within the Maastricht guidelines level of 3 per cent of Gross Domestic Product. It will also want to leave itself scope for a generous pre-election package in 1997.