The spring economic statement is an opportunity for the Government to set out where it wants the country to be over the next number of years, according to the Taoiseach Enda Kenny.

Speaking on his way into a Cabinet meeting at Government Buildings on Tuesday, Mr Kenny said the statement would also outline the progress the country has made and “how we see the challenge up ahead”.

The statement will set out scope for €2 billion in tax cuts in the next three years.

The plan, which is being cast as the opening salvo in a long re-election campaign by Fine Gael and Labour, assumes that more than €600 million will be available for tax concessions in each of the next three years.

With the election due within a year, the adoption of common fiscal targets by the two parties marks an attempt to set the parameters of the economic debate for the campaign to come.

Mr Kenny would not comment on the extent of possible public sector pay rises.

“Obviously we’ve made it clear before that the Minister will engage with the trade unions to discuss a successor to Haddington Road and the reforms that are necessary to continue in the public sector generally to increase efficiency and provide better services for our people,” he said.

Minister for Public Expenditure Brendan Howlin described the spring statement as a "new departure" saying some would even call it "radical".

“The government is laying out the fiscal parameters for next year six months in advance of the budget so that we can have inclusive debate about the choices for a changed Ireland,” he said on his way into the Cabinet meeting.

He said the country had been on an incredible journey in the past four years and that there had been an incredible improvement from the “ruin” faced by the Government when it came to power in 2011.

There were real prospects now, he added, for a growing economy, for people to get back to work and for choices in prudent spending in order to have “sustainable public services that are not put at risk every few years because of boom and collapse.”

He would not comment either on the extent of public pay rises saying he had not tabled any figures.

“We obviously have to have a path to pay restoration that is sustainable and affordable, that doesn’t undo the really good work we’ve done both on the reform side and in having sustainable resources to pay for public services,” he said.

He called on other political parties to “make their case.”

“Do they accept these parameters, will they want more taxation and in what areas... so that we can have a real economic debate rather than the daft kite flying that we’ve had for the last number of years. And we heard it again over the weekend when Micháel Martin on the one hand attacked buying votes and on the other hand gave away literally billions - we’re still doing the sums - literally billions that he promised in giveaways. We’re moving away from that. That was old Fianna Fáil style politics,” he said.

Asked whether there would be any cuts to the universal social charge he said there would have to be a division between futher public expenditure and further tax reduction.

“I suppose one of the mistakes of the past has been to depend on high taxes on work and high taxes on property transactions. We’re not going back to that. We want to make work pay. We want everyone back in work because the Irish people want to work and we want to ensure they have decent standards of living when they do work so that means decent wages and reasonable taxation levels,” he said.

Mr Howlin and the Minister for Finance Michael Noonan will outline the plan in the Dáil at 2.30pm.