Self-employed people will receive a significant tax break in next month's Budget, the Minister for Finance Michael Noonan has said.

Mr Noonan confirmed he will attempt to bridge the gap between PAYE workers and the self-employed.

He said he would not be able to eliminate it this year, but insisted the measures announced next month will be a significant initiative.

Mr Noonan said this would be the first step in a three-year programme to have the difference equalised.

Currently if you are in employment you are entitled to an additional tax credit referred to as the PAYE credit of €1,650. Self-employed people cannot claim this. It is expected the new tax credit will be worth €150 and that would gradually increase over the next three years.

Mr Noonan confirmed the Government will reduce taxes in the upcoming Budget. He said he personal taxes are now “so high they are costing jobs”.

The Minister told Newstalk radio that reducing direct taxes would encourage emigrants to come home and lead to more people at work.

Mr Noonan said he was "very surprised" the Health Service Executive had requested €1.9 billion in additional funding in the Budget.

He said the organisation attended a two-day Budget consultation with interested groups where everyone agreed on the €1.5 billion additional spending parameter set out.

The Minister said he found it it “incredible” that the HSE wanted to “grab it all and €400 million more”.

Mr Noonan said this was an attempt to create a scenario where the HSE cannot be blamed if there was a problem in the health service later in the year.

Speaking later at the National Ploughing Championships in Co Laois Mr Noonan ruled out any increase in the €1.5 billion in tax cuts and spending increases planned by the Government.

Mr Noonan stated the only way that the €1.5 billion ceiling could be breached is by raising taxes and “I’m not in the business of raising taxes”.

The Minister said he had explained “very poetically” to his Cabinet colleagues that he was in the business of collecting taxes not spending them.

“If they are looking for expenditure, they need to speak to Brendan (Howlin),” he said.

The parameters of the Budget, which will be announced on October 13th, were set out in the Government’s Spring statement.

Mr Noonan said he saw the Budget as “not the last budget of this Government, but the first of the next business cycle.

“I’ll be saying that we will start a number of measures in this budget and if we re-elected we will continue them on into subsequent years if we are re-elected.”

When asked how the recovery could be spread to rural areas, he responded by stating that measures to help the self-employed will aid those in rural areas such as farmers and shopkeepers.

He said the recovery has spread from Dublin to the bigger cities and now economic hotspots such as Killarney, Kilkenny and Westport.

“We want the recovery inside the door of every family in the country,” he said.