Dublin  - Faced with falling tax receipts as a result of a slowing economy, Ireland's government announced budget cuts of 440 million euros (690 million dollars) for 2008 Tuesday afternoon.

Tax revenue in the first six months of 2008 was down by 8 per cent compared to the same period of 2007, a statement from Prime Minister Brian Cowen's office said, while expenditure had increased 11 per cent over the same period.

The government hopes to make further cuts of 1 billion euros in 2009.

"The outlook for tax revenues is to remain weak for the remainder of this year. Consequently a tax shortfall in the order of 3 billion euros has now been factored into the budgetary arithmetic for 2008," the statement said.

All government departments, apart from health and education, would have to reduce their pay rolls by 3 per cent by the end of next year, Finance Minister Brian Lenihan said.

A planned pay rise for government ministers, judges and civil servants has been shelved, and spending on consultants, advertising and public relations would be cut by half next year, Lenihan said.

The government also plans to review the cost of tribunals, such as the Mahon Tribunal currently probing former prime minister Bertie Ahern's finances, which was set up in
1997 to look into planning issues and could end up costing 300 million euros when it winds up later this year.

Lenihan said the government would look into how services could be shared to save costs and he announced a 45-million-euro cut to the foreign aid budget.

Cowen's statement said the cuts were intended to return Ireland to an annual 4-per-cent growth rate "as soon as possible."

The Dublin-based Economic and Social Research Institute think tank warned last month that the country's economy could slip into recession this year for the first time in over 20 years. (dpa)