Any decision to reduce USC would be a political one, says Noonan

"You [the committee] have heard many opinions, and those opinions should be valued but there are other opinions as well. Political parties have felt the USC should be reduced," Mr Noonan said.

As reported in the Irish Examiner this morning, the European Commission in its latest report on Ireland's economy, warned against abolishing the USC which at its height brought more than €4bn in to the Exchequer.

Many economists, trade unions and even officials in the Department of Finance have also warned against phasing out the USC.

Shutting down tax breaks to vulture funds could double the available fiscal space from €1bn to €2bn for next year, the Dail's new Budgetary oversight committee has heard.

In total, the State could gain by between €10bn and €20bn if such loopholes over a period of 10 years are closed, it was claimed.

Independent TD Stephen Donnelly posed the question to Finance Minister Michael Noonan at the committee, calling for a closing of loopholes relating to Capital Gains Tax which such funds currently benefit from.

Mr Donnelly said Cerberus will walk away from its purchase of Nama's Northern Ireland loan book known as Project Eagle about €2.8bn better off because of the tax breaks.

“Cerberus will walk away with £2bn or €2.8bn paying literally no tax. If we shut this down, we could double the fiscal space,” he said.

Mr Noonan said this was a break introduced at a time to stimulate activity, but it was since being used in a way that was not intended.

He said the closing of the loophole could not be applied retrosepctively, according to advice received.

Mr Noonan commended Mr Donnelly's work in this area and requested he submit a suggested course of action to him and he will get his officials to examine it and discuss the matter with the Revenue Commissioners.

“It is too late in this cycle to affect the fiscal space for this Budget, but there are implications down the line,” Mr Noonan said.

Mr Donnelly said he was disappointed the Revenue Commissioners could not provide up to date figures as to how much money could potentially be involved to the committee.

Meanwhile, tax revenues were running at €449m ahead of target at the end of August, Mr Noonan has revealed.

This he said means the Government took in €1.7bn more in the first eight months of 2016 than it did in 2015.

Mr Noonan confirmed that the Budget will be announced on Tuesday October 11 as had been signalled in recent weeks.

Mr Noonan restated that the amount of additional spending available for the Budget will be in the order of €1bn, despite increased economic uncertainty following the Brexit vote.

He said the additional money will be split on a 2:1 basis betweeen spending increases and tax cuts.

He said he and the Government are not complacent to those external risks and insisted the mistakes of the past will not be repeated.

Mr Noonan was speaking during his appearance at the new Oireachtas Budgetary Oversight Committee, chaired by Fine Gael TD John Paul Phelan. The committee is also hearing from Revenue Commissioner officials.