The Coalition is expected to commit to eliminating the deficit by 2018 - the same year it hopes to achieve full employment - in its upcoming spring economic statement.
Taoiseach Enda Kenny on Wednesday said the spring statement will not be a “budgetary statement” but will “set out a strategy” for the coming years in areas like jobs, tax and banking.
Mr Kenny told Newstalk's Pat Kenny Show that the statement will set out the "parameters of where we want to be: creating a business environment, on taxation and on dealing with the banks".
It would outline the “direction of travel” over the next three to five years in areas like tax, employment and jobs, he said.
While the interview showed that broad tax outlines are on the agenda for the spring statement, it is understood discussions about what will be included are still ongoing in Government and have not yet been finalised.
Coalition sources noted Mr Kenny's statements during the interview on reducing income tax further in order to create employment and bring high end jobs back to Ireland.
Others suggested a "difference of emphasis" between Fine Gael and Labour, with Fine Gael making a greater play of broader tax initiatives.
The spring statement will outline the “fiscal space” which will show the potential funding available over the next number of years for tax cuts or spending increases, essentially trying to flush the Opposition into committing to reducing the deficit in the same timeframe as the Coalition or not.
“It’s getting them onto what we want to talk about,” said one well placed figure. “They’ll have to say if they’ll stick to our spending plans or not.”
However, sources across Government say the spring statement will contain no immediate tax changes, which will be a matter for October Budgets.
Mr Kenny said: “The budget will set out the targets for 2016 and that’s a continued reduction of income tax, a continued lessening of the tax burden on people, taking out 500,000 people out of USC altogether and other flexibilities that we can have will be determined by the Cabinet as we look at the figures on the economy during the course of this year.”
Fine Gael believes last October’s budget set a template to be followed in the next two budgets, although sources in Labour disagree and say there may be tax cuts over and above those already promised if the money is available.
