"Better targeting" of measures to support households in the upcoming Budget would avoid adding to inflation, according to Chairman of the Fiscal Advisory Council Sebastian Barnes.

His comments are contained in a speech he is due to deliver to the Dublin Economics Workshop this evening.

The Fiscal Advisory Council repeats its view that the Government faces "a delicate balancing act" in the upcoming Budget.

At a speech this evening, Mr Barnes will say it is important for the Government to stick to its commitment that it is only temporarily going beyond its 5% spending limit.

It wants the Spending Rule to be made law and for it to apply beyond core expenditure.

The speech says much of the council’s advice has "gone unheeded" over the years.

It singles out what it describes as "an ambivalent approach to the budgetary framework" with the Department of Finance never consistently managing to publish five year ahead forecasts.

As a result, it says, "the public finances can be left adrift in the face of short-term political pressures and volatility of the economy."

This, it says, raises questions about how governments will navigate the challenges ahead.

Speaking on RTÉ's Morning Ireland, Mr Barnes said the Government is facing "a really difficult job in this Budget," as it must strike a balance between helping households in the economy, and not stoking higher inflation.

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"One way of achieving that balance and a better way is to target more of the support those lower income households - maybe people in rural areas, maybe older households - that are going to be much more badly hit by the higher fuel prices, compared to rich people who spend less of their income on these things and probably have more savings to fall back on," Mr Barnes said.

He said an increase in social welfare and pension rates is required to help to compensate those houses for higher energy costs.

Mr Barnes added that energy credits are a "much more sensible approach" by the Government when compared to energy price caps, saying that caps are "very risky in terms of the public finances".

"Saying today that you're going to cap them at a particular level, when you've got no idea what the prices are going to be, is a huge risk that the Government shouldn't take."

Mr Barnes said the Government has made a lot of progress over the 10 years that the Fiscal Advisory Council has been in place in terms of strengthening the fiscal framework.

However he added that advice on the merits of adding to rainy day fund has not been heeded.