The Minister for Finance has announced measures which he said would encourage people to save rather than spend. They were part of a wider attack on what he called "the inflationary psychology".
Mr McCreevy detailed an agreement with the Irish League of Credit Unions on taxing its members' dividends.
The deal - which was revealed in The Irish Times last month - includes new tax breaks to encourage saving which will also be extended to banks and building societies.
It will still be left to credit union members to decide whether or not to declare their dividends for tax. But a new Deposit Interest Retention Tax of 20 per cent has been introduced to encourage them to have tax deducted by their credit union.
In addition, members who put their shares in new medium-term savings accounts for a minimum of either three or five years will not pay DIRT on the first £375 (€476) or £500 of dividend income, respectively.
The measures are a concession from Mr McCreevy's attempt in his 1998 budget to impose DIRT on all credit union savings. A two-year stand-off with the credit unions ensued before he abandoned the proposal.
Yesterday he told the Dail: "The league has written to me stating that it has consulted widely within the movement and it is satisfied that there is general acceptance of the proposals." The measures will be introduced in the Finance Bill.
The Minister added that he plans to extend tax-free incentives for medium-term savings to other deposit-taking institutions.
"This will be discussed with the institutions concerned before the Finance Bill," he said. The move will head off possible objections from banks and building societies that credit unions are being given an unfair advantage.
Mr McCreevy also said that he will "consider suggestions for further savings innovations before the Bill is enacted." One building society, the EBS, has already made a proposal to the Government that would involve the State matching some of the funds put into medium-term savings accounts.
Another proposal was made by the Irish Association of Investment Managers. Yesterday it said the Minister had "not addressed in any meaningful way the need to increase the level of medium and long-term savings." But it welcomed his offer to consider other schemes.
