Coupled with the 16bn that will be released from SSIA by summer 2007, the Budget tax cuts and spending will fuel the feelgood factor on which the government is banking for re-election.

Just one month into the year, tax receipts are so strong that only an economic meltdown could scupper Budget giveaways on a scale never seen before, according to leading economists. "We could be looking at a pre-election boom to beat all pre-election booms, " said Austin Hughes, chief economist at IIB Bank.

"It's going to be quite a year."

Exchequer returns published last week showed a 1.3bn surplus at the end of January, with tax receipts up a massive 22%.

"Receipts are so far ahead of target that, even on the basis of one month's data, it's possible to project a massive overshoot for the year, " said Dan McLaughlin, chief economist at Bank of Ireland. "The Budget arithmetic from last December is already redundant."

He believes that, in a bid to woo 750,000 voters on high and middle incomes, the government may even cut the 42% top rate of income tax in the run-up to the election.

"They'll have the money to do pretty much anything they want, " McLaughlin said.

Jim Power, chief economist at Friends First, estimates that the government may only need to borrow 1bn in 2006, compared to 3bn projected in December's Budget. This is because taxes will raise 1.5bn more than planned, while government spending, especially on big capital and infrastructural projects, will fall short of target by up to 500m.

"The generosity of last December's Budget will pale into insignificance compared with what's to come, " he said.

"There's no reason why the very positive trends that have come through in January won't continue throughout the year."

VAT, excise taxes, stamp duty and capital taxes are all expected to overshoot targets because of a boom in consumer spending, record house construction and the SSIAs.

"To get the slowdown required [for tax receipts to come in on Budget], the housing market would have to come to a juddering halt, " said McLaughlin. "I suppose that's possible but it's not likely."

Hughes believes the government's biggest challenge will be to temper expectations. "The numbers that came out last week have already put the Department of Finance on the back foot in terms of expectations, " he said. "It's risky to extrapolate, but you could argue that we're only at the early stages of an even bigger boom."