The Government will have about €600 million for new spending, plus €250 million for capital spending in the Budget, according to figures published on Wednesday.

This will mean that despite strong economic growth, the minority Government will be significantly restricted in terms of what it can unveil on Budget day.

Separately, there will be scope for tax cuts amounting to less than €350 million, according to the Government’s Mid Year Expenditure Report.

Both Minister for Finance Michael Noonan and Minister for Public Expenditure Paschal Donohoe said the CSO's recent reporting of huge jumps in GDP last year would not have any effect on Budget calculations.

Mr Noonan said that Budget would be based on growth of 5 per cent.

The expenditure ceilings published on Wednesday show the agreed spending limits for Government departments for next year, before any policy changes announced in the Budget. However, because provision has already been made for demographic pressures and other previous spending commitments, the Government will have little room for any major adjustment to most of these figures.

In all, before the Budget adjustments, the Government expects to spend a gross total of €56.7 billion next year.

High-level Government sources say that while the figures published may move a little when Budget day comes, there will be little scope for the sort of spending increases the previous government introduced its last budget. Then, a budget package of about €1.5 billion was bolstered by supplementary estimates - essentially top-ups for government departments’ budgets - of a further €1.5 billion.

Health overspend

It is also clear from the document that overspending of health budgets remains an acute concern for the Government, notwithstanding a recent €500 million top-up for the Department of Health’s allocation for this year.

Mr Donohoe warned that while economic growth was producing additional resources for public spending, the Government would not increase its spending plans in an unsustainable way.

“If we combine new politics with old habits, we’re going to end up with bad budgets,” Mr Donohoe told journalists in Government Buildings.

Mr Donohoe stressed he was committed to “sustainable improvements” in public services by targeted and planned increases in public spending, but insisted there would be no return to the big increases in spending of the boom years.

Mr Donohoe also insisted again there would be no deviation from the terms of the Lansdowne Road Agreement. The Government is on a collision course with rank and file gardaí and secondary teachers, both of whom are outside the terms of the agreement, and who are threatening industrial action over pay and allowances.

He said he would “not be able to meet” the huge variety of requests for extra resources. However, he said, he hoped TDs would accept the reality of the constraints the public finances face.

The Oireachtas has committed to a new system of formulating the budget, with all-party discussions and attempts to reach consensus about spending priorities during the summer at a new Oireachtas budget committee. However, that process will not be fully functioning for the forthcoming budget.

Mr Noonan said he expected a decision on the European Commission's case against Apple in late September or early October.