"THE nation is fighting for its life." The message could not have been any clearer from Brian Lenihan last Tuesday.

Delivering what Labour's Joan Burton dubbed "the budget from hell" and Fine Gael's Enda Kenny called a "smash-and-grab raid", Lenihan made a politically dexterous move last Tuesday in letting everyone know there are more tough measures coming down the tracks in the December budget.

The government will seek to raise an additional €1.75bn from taxation in 2010. Lenihan said: "Options to raise this may include the taxation of child benefit, the introduction of a carbon tax, a form of property tax and significant further base broadening through the elimination of unnecessary reliefs and a review of all areas of tax-exempt incomes."

If Lenihan is telling us all in April that the government is contemplating these "options", you can be pretty sure that they are on the way in the December budget.

Alexander Haig, former US Secretary of State, once said: "The warning message we sent the Russians was a calculated ambiguity that would be clearly understood." Lenihan has just given us all a calculated warning that there will be more painful measures later in the year.

A government source told the Sunday Tribune: "The minister does not want to tax much more on income tax so he will raise money through other taxes. A lot of that will depend on the Commission on Taxation which is due to report back in July."

Taxing or means testing child benefit was signalled for December. Lenihan said: "The government does not think that it is fair to pay the same level of benefit irrespective of the level of income of the recipient."

Anecdotes about middle-class couples stashing away their child benefit as a de facto summer holiday fund are set to be confined to the past.

John Sweeney, a senior official in the National Economic Social Council (NESC), recently claimed child benefit, which costs €2.5bn annually, is hugely inefficient at tackling poverty because it is paid universally to all families regardless of their income. It is not clear how much means testing or taxing child benefit would yield for the government. There are also the logistical and bureaucratic problems means testing 640,000 mothers pose for the government.

There was little by way of a Green tinge to last week's budget, but a carbon tax is part of the programme for government so it is on the way. The Commission on Taxation is looking at a series of options for its implementation.

The Green Party is eager for the tax to introduce a 'holistic' carbon-pricing system and a number of options – ranging from higher excise duties on fuel to broader measures – are being considered. An ESRI report last year estimated that a carbon levy would cost households €208 a year, but warned that rural households could pay disproportionately as they have bigger houses and use more cars as they do not have access to public transport.

Government sources are reluctant to speculate on the amount or on how a property tax will be implemented as it is "politically sensitive".

It is understood that a range of options are being considered and they include implementing the tax on the basis of the purchase price of the property, where the property is located and the level of access to services at the property.

It has also been mooted that this tax will not be universal in the interests of fairness. The government may build in partial waivers and exemptions from this tax for those on low incomes.

Before last Tuesday's budget, up to 40% of earners were paying no income tax at all. Revenue data from some 2.4 million earners shows 38% are entirely exempt from income tax, and the top 20% of income earners pay 77% of all income tax.

In his speech, Lenihan said: "The challenge is to spread the burden in a fair manner to a wider range of income earners while avoiding economic disincentive effects."

The Commission on Taxation report in July will be a red-letter day for a lot of earners as it could provide a blueprint for further broadening of the tax base in the December budget.