A new think tank, sponsored by the trade union movement, has advocated extending the period over which Ireland will correct its public finances by an additional two years.

The Nevin Economic Research Institute has said there is also a case for raising taxes gradually on all but the lowest incomes.

Under the plan agreed between the Troika and the Government, Ireland is to bring its deficit down to an acceptable level in three years time.

The institute said that adjustment should be made over five years.

It argues that the current plan will damage the economy so much existing targets will not be met.

The Institute said the discontinuation of proposed cuts in current and capital expenditure is justifiable to avert haemorrhaging domestic demand. It said a solidarity tax on the super rich and tax exiles would generate a good civic example and a sense of fairness.

The Nevin Economic Research Institute also called for a review of tax reliefs. It said there is a case for raising taxes on all but the lowest incomes over a long period.