The Nevin Economic Research Institute says extra government revenues should be invested in ways that will raise the long term productivity of the economy, rather than spent on tax cuts
In its latest quarterly commentary, the trade union-supported think tank says more investment on education, research and key infrastructure will give a better and longer boost to the economy.
The institute thinks the economy will grow by close to 6% this year, and 4% next year, with the number in work breaking the two million mark in the middle of next year, and the Government deficit falling to 1%.
But to keep long term growth going, and try to reverse a 20 year trend of falling productivity, it argues against cutting taxes in the budget, calling instead instead for the money to go towards more childcare, to enable parents to return to the workforce.
Strategic infrastructure, research and education are other areas it says public money can be invested in productively.
"The Institute urges the Government to prioritise long-term strategic investment over short-term giveaways such as tax breaks or tax cuts especially where these disproportionately benefit the better off," commented NERI director Dr Tom Healy.
"Budget 2016 must put the emphasis on investment for future prosperity and equality," he added.
