In its Pre- Budget meeting with Finance Minister Brian Cowen, the SFA has called for a major initiative on childcare costs and speedier public sector reform.
The SFA's submission, entitled 'Costs and Competitiveness', also addressed pensions, tax treatment of R&D, and direct and indirect taxation.
The SFA called for a major review of the planning process for the provision of childcare and said the cost, which is three times the EU average, is a social time bomb.
The SFA proposed that any employer contribution to childcare should not be taxed as a benefit and that funding should be provided for more places, with tax concessions available to both community and private sectors.
SFA Director Pat Delaney said one of the key challenges of the budget is to regain competitiveness and eliminate the inflation differential with the rest of the euro zone.
He said the intensification of competition from low cost locations has exposed a sharp rise in Ireland's cost base.
The SFA said that costs such as electricity, insurance, commercial, waste and water rates are undermining Irish business, and that productivity in the indigenous sector stalled last year at 2.6%.
On pensions, the SFA called for greater incentives for those on moderate income to invest in their pensions and also tax reliefs for all at the higher rate, regardless of income.
On the 20% tax credit for incremental R&D expenditure, Pat Delaney said it was too complex and its restrictive nature proved a lack of incentive for non profit SMEs.
On local authority reform, the SFA wants the same accountability measures as other state bodies and also more accountability and better integration with the business sector .
The SFA called for customer performance targets and said that future commercial rate increases must not be in excess of inflation and must be tied to agreed performance targets.
