The Chair of the Irish Fiscal Advisory Council has said that politicians need to explain how they would afford to build 40,000 houses a year and retain the €4 billion that was put into the health during the pandemic.

Sebastian Barnes said the money would have to come from increased taxation or through finding savings elsewhere on the spending side.

Mr Barnes' comments came after Tánaiste and Fine Gael leader Leo Varadkar told his party's Ard Fheis over the weekend that that Ireland needs to build 40,000 homes a year.

Mr Varadkar told the virtual meeting that he wants to set a target of 70% home ownership by the end of the decade, which is to be achieved through public and private investment.

He also said that the health services should retain the additional staff and billions of euro in extra funding which was provided to respond to the Covid-19 pandemic.

He said that Sláintecare, with its promise of affordable healthcare for all, must be implemented - including expanding medical card eligibility, while reducing expenses for medicines and hospital charges.

Speaking on Morning Ireland today, Sebastian Barnes said that the winding down of pandemic payments and the recovery in tax revenue will help, but warned that corporation taxes, which ordinarily would have cushioned the blow, will be under pressure going forward.

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Mr Barnes said it is hard to know how big the cut to corporation taxes will be.

He said the Government has factored in a €2 billion reduction but the Council thinks it would be more prudent to factor for a reduction of over €3 billion.

Sebastian Barnes said it seems likely that taxes will have to increase in Ireland, but "exactly how you do that is another question."

He said that politicians will not always like the message from the Council because it says they have to make some pretty hard and difficult choices.