The Minister for Finance, Brian Cowen, has told the Institute of Bankers that he will be prudent in his approach to his first Budget on 1 December.
Addressing the Institute of Bankers' annual dinner in Dublin, Mr Cowen said clear choices have to be made between current and future consumption.
He said he will continue to favour investment in infrastructure because that raises productivity and living standards for the future.
The minister said he agreed with a report from the International Monetary Fund today that forecast the Irish economy would grow by about 5% next year.
That report said the main challenge facing Mr Cowen is to manage the economic transition to slower growth in the future than we had in the past.
The IMF report advised the Irish Government to introduce a new property tax on homes and to tax second homes at a higher rate.
It also said that the mortgage interest tax relief should be abolished.
The Finance Minister acknowledged that continued economic growth in 2005 allows room for manoeuvre in the provision of public services, but warned that this room is still limited.
Mr Cowen also took bankers to task over recent financial scandals.
He said that unethical business practices, where they exist, or slipshod treatment of customers will undermine the banking industry if it is not addressed in a transparent fashion.
He added that customers have a right to feel comfortable in carrying out their financial services transactions and also have a right to believe they will be dealt with fairly.