The Taoiseach Enda Kenny has re-iterated that the marginal rate of tax will be brought below 50%.

Mr Kenny was speaking on his way into a special Cabinet meeting this morning, during which ministers will put the finishing touches on the €1.5bn package of tax cuts and spending increases.

It is understood tax on cigarettes will be hiked, but duty on alcohol and petrol are expected to remain unchanged.

Ministers are also set to consider measures to ease the cost of childcare, with a second year of free pre-school expected to be considered too expensive.

Also among the chief sticking points is the amount of the extra spending power that will be soaked up in health.

The government has €750m to put into extra spending next year - but is trying to strike a balance between helping the health service to cope, while also leaving enough cash for other sectors which are more popular with the public.

Finance Minister Michael Noonan has indicated that income tax changes will be the focal point of Budget 2016.

Taoiseach Kenny says it is a priority for Government.

And Tánaiste Joan Burton says affordable housing is another of their main issues.

While the Agriculture Minister Simon Coveney says Budget 2016 will not be a 'big giveaway budget in the run up to an election'.

Mr Coveney says the coalition is not engaging in auction politics.

And Minister Coveney says he wants farmers to be given 'priority treatment'.