MOTOR TAX: Motorists are set to contribute at least an extra €82.5 million to the Government next year due to changes in Vehicle Registration Tax (VRT) and a three-cent increase in the price of diesel.

The cost of servicing and repair will also rise due to an increase in the rate of VAT to 13.5 per cent.

However, an expected rise in petrol prices did not materialise. And an extra €209 million is being allocated to national roads construction next year.

Prices of cars with two-litre engines are set to rise by about €2,000 from January as a result of the VRT changes. Mr McCreevy has included cars with engines greater than 1,901cc in the top band of 30 per cent. Previously the band covered cars over 2,001 cc.

The change in VRT is expected to bring in an extra €30 million while the rise in diesel prices will yield €52.5 million next year.

Mr McCreevy also extended the expiry date for the 50 per cent VRT refund scheme on environmentally friendly "hybrid" vehicles for a further two years.

Mr Cyril McHugh of the Society of the Irish Motor Industry said that while the Budget could have been worse for motorists, "we are disappointed with the changes to VRT".

"There may be options for some car importers to make changes to their orders for the coming year, but with the new rates coming into effect from January 1st, importers would have preferred a greater lead-in time for introduction."