Tánaiste and Labour Party leader Eamon Gimore has warned of tough decisions to be made in December's Budget.
However, he said the Government would "level with people" by telling them that while it will be difficult, they are going to get on with it.
Mr Gilmore told the opening of the Labour Party's think-in in Co Carlow that no Government wants to cut spending and increase revenue but that it has to be done for the sake of the country and for the next generation.
He said decisions would have to be taken that are necessary but are outside "the comfort zone of old ideas".
Mr Gilmore added that one challenge facing the Government is reform of social welfare, adding that while reform is not easy "we cannot go on as we are".
He said that on reform, Labour would be "the engine of Government, not a brake-car".
Earlier Mr Gilmore rejected criticism of his performance at Cabinet, which was printed in today's Irish Independent.
He said the Government would not be distracted by what he called "tittle-tattle".
He said he did not believe any Cabinet minister had made comments quoted in the article.
Minister for Communications, Energy & Natural Resources Pat Rabbitte also defended his party leader following a weekend poll that showed the party's popularity falling.
Speaking on RTÉ Radio, Mr Rabbitte said that Mr Gilmore was a very effective leader whose contribution at Cabinet level was invaluable.
This is the largest parliamentary Labour Party ever, with 37 TDs, 12 Senators and three MEPs.
As part of the party's think-in, the Minister for Public Expenditure and Reform Brendan Howlin will brief colleagues on progress towards the Budget, and on the Comprehensive Review of Expenditure he is carrying out.
The Ministers for Social Protection and for Education, Joan Burton and Ruairi Quinn, respectively, will also discuss job creation - a subject Labour stressed in opposition.
