Minister for Finance Brian Cowen is delivering his Budget 2007 speech in the Dáil.
He began by painting a rosy picture of our current situation.
"Growth is running at 5%, its ideal sustainable level," he said.
"There are more than two million people at work. Public finances have never been in better shape."
He said the economy will continue to grow next year and that unemployment will remain low at 4.4%, among the lowest levels in the EU.
The Minister added inflation will drop from the 2006 average of 2.7% to 2.6%, as long as growth levels in Ireland continued at the projected levels and the international economy remained strong, especially in the EU and US.