Speaking at the launch of Enterprise Ireland’s International Markets Week, Leo Varadkar also indicated there may be supports for the aviation sectors announced.

“Our Budget this week will see modest increases in welfare, reductions in personal taxation, and we expect to see a lot of those business supports like the Wage Subsidy Scheme continue,” he said.

“And that is in recognition of the fact that there are some sectors, particularly those sectors that you mentioned, tourism, hospitality, aviation, entertainment and the arts industry that are really only getting back into action at the moment, are not able to operate at full capacity, and we get that.

“We think they are going to need additional support, whether that is an aviation incentive to get routes restored, whether it is help with commercial rates, whether it is help with the wages, Government sees that that is something we’ll have to keep doing.

“It can’t go on forever, but it can go on into next year and that is what we intend to do,” he added.

Mr Varadkar reiterated that the Government intends to stick with the Budget parameters set out in recent weeks, despite a better than expected performance by the economy.

He said the overall package will be worth €4.7 billion, made up of a tax package of €500m and €4.2bn in additional spending, much of which has been pre-announced because it relates to changing demographics, keeping up with additional services and capital plans.

“So whether there is a temptation or not doesn’t arise, because we set those parameters and we are going to stick to them,” he said.

An increase in the fuel allowance and a widening of the eligibility criteria for the payment are also likely to form part of tomorrow’s Budget.

The final details will be signed-off on at a meeting of Cabinet, ahead of an announcement in the Dáil.

Meanwhile, Taoiseach Micheál Martin has said that the pandemic bonus, or extra bank holiday, will not be dealt with in the Budget tomorrow.

“I think we are going to see a focus across the board on costs for people in different areas, in health and in fuel and generally in welfare payments,” he said.

“I think we have a lot to do in childcare over the next number of years and Minister [for Children] O’Gorman is keen to in the first instance to consolidate the human resource question in childcare, in other words, supporting incomes for people who work in childcare; make it more attractive to both recruit and retain people in the early years education and also give support to parents and to try and curtail any increasing costs.”

After last year’s Budget was overshadowed by the Covid-19 crisis, this year it will take centre stage once again as one of the key set pieces in the political calendar.

The finishing touches were being applied over the weekend to the package which will include €1.5 billion of new measures.

A third of this will be allocated for tax changes and €1bn for new spending.

Much of that will be taken up with welfare increases, which will see €5 added to the State pension and a similar sum to weekly welfare payments like job seekers, carers and disability allowances.

In education there is likely to be 1,000 new SNA positions announced, as well as a broadening of the DEIS scheme to include more schools.

An increase in the student grant is likely to be on the cards which will be the first in ten years.

It is understood that Minister for Tourism Catherine Martin has secured €100m worth of new investment.

This will focus on marketing Ireland as a destination, as well as reinvigorating festivals and nightlife to boost the tourism sector which has been so severely hit by the pandemic.

Minister for Public Expenditure and Reform Michael McGrath said this Budget would be progressive.

He added it would seek to improve living standards as well as work towards both economic and social recovery in the aftermath of the pandemic.