Whether this Budget, no matter how tough it is, can make a difference to Irish economic fortunes with global markets in such turmoil is open to debate. What is sure is that the Minister simply has to try to halt the slide in the public finances.

Looking at the options available to Brian Lenihan, any increase in the standard tax rate would alienate a large portion of the workforce, particularly given the settlement in the recent pay negotiations.

However, an increase in the top rate from 41 per cent now appears a possibility, if not a probability, and indeed, given the deterioration of government finances and the fact that there is a scheduled three and a half years to run until the next general election, even a change in the standard rate cannot be ruled out.

Another option is to leave the tax bands as they stand. These bands determine the amount of income taxable at the standard rate and are usually increased in line with inflation.

If the bands do not in­crease then this becomes a form of stealth taxation, although one that the Minister may argue is warranted given the crisis we are facing.

Something the Government has mooted in recent years, and again with increasing momentum in recent weeks, has been the abolition of the PRSI ceiling for employees.

At present, income earned over €50,700 is not subject to PRSI (at 4%). If this ceiling is removed, it would substantially reduce the take-home pay of middle income Ireland employees.

Any changes to the income tax rates or bands can be expected to take effect from 1 January 2009. So if that's the case, why did the Minister bring forward the date of the Budget?

The official statement at the time indicated that the Government wished to introduce changes to spending plans while simultaneously giving "clarity and confidence to investors and taxpayers alike".

It is important to remember that the announcement was made before the worst effects of the banking crisis were felt. The full extent of the exchequer deficit (€9.4bn) and the slump in tax revenues (€3.6bn behind target) had not yet been felt.

A commonly held view was that the Budget would introduce reforms to the stamp duty system, which would take immediate effect. Whatever the impact of external factors on the property market here, the Government has to be seen to be doing something to assist home owners.

For this reason, we would be surprised if further reform is not introduced, particularly to ease the burden for those trading up where the nine per cent rate represents a major financial burden.

Recent job losses in the manufacturing sector have emphasised the importance of attracting high end jobs to Ireland. The existing R esearch and Development (R&D) tax incentives have not gone far enough in encouraging further investment, indeed the uptake of the available tax credit has not been as significant as expected.

A widening of the scope of the incentives available is required to encourage companies to invest in Irish R&D, particularly given that we have one of the youngest populations in Europe.

Ireland has received a lot of exposure, some good and some not so good, arising from plans by several major UK based companies to migrate here. Notwithstanding this, the tax regime applicable to Irish holding companies is generally regarded as unduly complex.

For example, the taxation of foreign dividends could be simplified in order to provide greater clarity to foreign investors.

Un­fortunately, such changes are unlikely to be top of the minister's agenda and we are likely to be left with the existing unnecessarily complicated set of rules.

Changes to the capital gains tax (CGT) regime and the residential land rules are however possible, given the changed landscape. The provisions governing the deductibility of pension contributions may also be altered, which would be a further kick in the teeth to those already nursing large losses on their nest eggs.

Expect to see increases in all the social welfare categories confined to inflation. The books need to be balanced and even the severe cuts to public spending are unlikely to leave the Minister much room to manoeuvre.

The position in recent weeks has only gotten worse, with the ESRI predicting unemployment to reach eight per cent in 2009. This will automatically place an extra double burden on the exchequer with fewer people paying tax and more people claiming social welfare.

Expect a tough but reasonably fair Budget, one that seeks to limit increases in tax rates in order to avoid risking a further contraction in economic activity.

However, some increases are certain with the brunt likely to be borne by middle and high income earners. It will feel particularly painful after more than ten years of boom budgets.