Taoiseach Brian Cowen (l), with European Commission President José Manuel Barroso

Taoiseach Brian Cowen confirmed on Wednesday, that the budget will be in addition to the €2 billion pension levy announced last month and the €2 billion package of savings and tax measures contained in the 2009 budget announced last October.

Opposition parties were briefed yesterday by Department of Finance officials and have been asked by Minister for Finance Brian Lenihan to make their own suggestions about what should be in the budget.

The Emergency Budget was triggered by Tuesday's dire Exchequer Returns for February, which showed that the tax intake this year may fall to €34 billion,  compared with the target of €42.8 billion, which was set in Budget 2009, in October 2008.

The Government had budgeted spending of €55 billion but last week-end, its revised tax target was €37 billion.

"This leaves a gap of € 18 billion in the day to day costs of running our country. Everyone will need to pay more. We must close this gap," Cowen said.

The sudden governmental action, after a year of dithering, came on a day when the latest unemployment figures showed another stunning jump of 26,700. The total now stands at almost 353,000, bringing the unemployment rate to 10.4% of the workforce.

In the Dáil, the Taoiseach said that if the current rate of job losses continued, the number of unemployed could reach 450,000 by the end of the year. That would represent an increase of almost 300,000 people in just two years. It could in fact be a shattering 400,000 in two years.

Ulster Bank economist Lynsey Clemenger, said on Wednesday: "Given that we estimate that each additional 10,000 workers on the live register costs the exchequer about €150 million in social welfare benefits and lost tax revenue, the cost so far has been on the region of €2.5 billion. We anticipate that the total claiming unemployment benefit will average 460,000 in 2009, which implies an overshoot in spending of €1.25 billion, and a tax loss of about half that again, compared with the January budget estimates."

Finance Minister Brian Lenihan said earlier Wednesday, the exclusion of 40% of the workforce from the income tax net was something that would have to change. “Everybody will have to pay something,” the Minister said on RTÉ Radio’s News at One.

Revenue figures for 2008 show, that 32.8% of all income tax is paid by the top 2.8% of earners. The 6.36% of all earners who earn more than €100,000 a year pay 42.5% of all income tax, while the bottom 32.3% of earners pay no income tax at all.

Ireland's indirect taxes are high. For example, the cost of a new car in Ireland is about 30% above the Eurozone average, while the Government collects an average of 28% of the selling price of each new housing unit sold in the State, according to the then Minister for Finance Brian Cowen, in November 2004.

The average weekly industrial wage, on an annual basis is €32,000.

New property taxes, third level fees and a carbon tax, are under consideration.

As to a possible weed-out of 800 State agencies, known as quangos, the hundreds of advisers, constituency helpers, parliamentary assistants and so on, don't expect too much instant vision.

Just a week ago, the former social worker Mary Coughlan, who is currently Tánaiste (Deputy Prime Minister), had said the public finances are under control and ruled out further spending cuts or changes to the tax regime until next year’s budget.

Mary Coughlan also warned against talking down the economy, saying Ireland had to “make sure that our international reputation is not damaged to such an extent that we will not have access to borrowing requirements, that we will not have access to money for our banking systems”.

Speaking on RTÉ’s Morning Ireland programme last week, Coughlan said the Government had made a decision on the amount of expenditure for this year and “we must remain within that.”