Country braced for toughest budget in recent history

Public sector pay cuts, slashing social wefare and a new carbon tax will feature in budget 2010 later.

The Finance Minister is set to deliver one of the toughest budgets in decades in the Dáil this afternoon.

Four billion euro in savings is Brian Lenihan's target for this budget.

A third of that from public service pay - 4% of a cut for the lower paid, and as high as 20% for those best paid.

Another third from social welfare - every payment from teh dole to rent allowance to child benefit will be cut - payments to pensioners will be the only ones to escape.

And the final third will see cuts to services, cuts to capital spending on infrastructure, hikes in charges and a carbon tax which will see petrol and diesel prices go up around 5c a ltr.

Calls from business and the opposition for a stimulus - something to get people spending and restire confidence will probably be lacking - Brianlenihan will argue he simply doesn't have the money.