Minister for Finance Michael Noonan has told an Oireachtas committee he had "no expectation that taxpayers will be throwing their hats in the air on Budget night."
The minister made his comments before the new Oireachtas Budget Oversight Committee today.
Mr Noonan warned that there was "a lot of things that are desirable that are not affordable" in Budget 2017.
"It will not be possible to phase out USC completely over a three-budget cycle, but it would be possible to phase it out over a five-budget cycle," Mr Noonan stated at today's meeting.
He also said that anything done must reduce the impact on low- and middle-income people.
Admitting that the marginal tax rate is too high here, Mr Noonan said that he is reducing the Universal Social Charge instead of looking at income tax rates.
The minister said that the high marginal rates of tax discourage key employees coming to work with multinationals.
He also said that it deters young Irish abroad who want to come home as they realise that they cannot afford to do so.
Earlier, Mr Noonan said that despite the strong performance of the Irish economy, "the international outlook illustrates the need for caution."
Minister Noonan also indicated that he intends to publish the Finance Bill as soon as possible after Budget day and not later than two weeks after the Budget on 11 October.
"Indeed, in line with the Oireachtas Budget scrutiny report and in order to allow more time the Finance Bill will be shorter than in previous years and focus on key items of budgetary importance," he added.
The minister said the economy continues to perform strongly, driven by the improving labour market.
He noted that employment in the second quarter of 2016 has increased by 56,200 year-on-year while unemployment has fallen from a peak of over 15% to 8.3% in August.
He also said that domestic demand is growing strongly, with private consumption up 3.5% in the first half of the year.
However, the international outlook illustrates the need for caution, he added.
On Brexit, Mr Noonan said that he will meet the UK's Chancellor of the Exchequer this week.
The minister also told today's committee meeting that he met Philip Hammond in Bratislava, and a meeting was organised for Thursday next.
He said he may get a better read of the impact of Brexit after sitting down with the Chancellor for an hour or two.
Minister Noonan said the world is uncertain and Brexit is "obviously a big issue".
He said the Department of Finance is of the view that the initial assessment of the UK's vote to leave the EU had an adverse impact on Irish GDP of 0.5%, which he said has been built into the figures.
Mr Noonan pointed out that there is not a blue print for Brexit and no-one knows when the UK will invoke Article 50.
He said there is a lot of risk at the moment and the Government will not take chances, ensuring a low risk Budget with provisions for the future.
Today's Committee meeting also heard from the Assistant Secretary at Revenue, Gerry Howard, who defended the tax authority's handling of the Apple case.
Mr Howard said there was no departure from the applicable Irish law, no preference shown and the full tax due was paid.
He also told the Committee that the case was with the courts and it was up to them to make a judgment.
Noonan wants to refrain from creating 'hiccup' in housing market
Minister Noonan expressed his reluctance at giving out details on the help-to-buy scheme in the upcoming Budget.
He told the committee that he does not want to affect the market.
The minister explained that when the housing policy document was published in July, he asked the Department of the Environment not to reveal details of the help-to-buy scheme.
"If you were a couple buying a house and a big chunk of money was held out to you, you would defer your plans to buy", the minister explained.
He said that in order to ensure there would not be market disruption, the Department of Finance decided to backdate the scheme.
Mr Noonan said he remained reluctant to give out further detail because he does not want people who have paid deposits "pulling back".
He said that whatever the Government does will be retrospective, adding that the housing market has enough problems with supply issues.
He said he did not want to create some kind of hiccup in the market by announcing a help-to-buy scheme prematurely.
He also confirmed anything the department is doing in relation to the Budget and housing is with the full knowledge of the Central Bank.