Minister for Finance Michael McGrath has said he expects energy supports to be included in the upcoming Budget.

He said the Budget will balance protecting living standards while not stoking inflation.

Minister McGrath said the Government will act but energy companies need to do their bit.

Speaking on RTÉ's This Week programme, Mr McGrath said that he anticipates improvement given the dramatic fall in wholesale energy prices, which will begin to be seen to be passed onto retail customers, households and businesses.

"Ultimately, we want to reduce people's bills in the long term that they're consuming less energy... we also have given the commitment that any revenues that we collect from the windfall gains of energy companies will be given back to people.

"We need to decide what is the correct mix, but I do expect that the Government will be providing additional support to households in the context of the Budget," he said.

"We have a number of different levers at our disposal from tax and expenditure or different supports that we've used before and may use in the future. So we will decide what is the right mix, but we also want to see how the market is responding by passing on the wholesale reductions to consumers," he added.

It comes as the Irish Fiscal Advisory Council expressed concern about the Government's plans to breach its own spending limits in October’s Budget.

We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences

Two weeks ago the Government announced that it would increase core public spending by 6.1% next year. That smashes the 5% limit it set for itself under its own spending rules.

Speaking on the same programme, Chairman of IFAC Professor Michael McMahon said there was a need to take a more medium-term perspective.

"Five percent in euro terms is about what most economists would agree the amount we should expect the economy to grow, plus the amount on average we should see inflation.

"The value of a rule like that.. builds credibility and makes plans more predictable.. if you set your own rules, the benefits accrue when you stick to it. That's the risk that's being taken."

Prof McMahon said it was about making choices, and that the Government needed to decide who to support and how, but if they want to stick to their own rules, they need to make other decisions to counterbalance that.

He said it was not a simple flick of a switch, but things can change quickly in the macroeconomic environment, and that is where having a strong fiscal plan in place helps.

If you lose credibility, it can end up costing more when it comes to borrowing for future supports, which is another risk, Prof McMahon added.

He said that Ireland was already taking a risk on corporation tax reliance, as if disappeared it would be a great shock.

Minister McGrath said that the Government is listening carefully to IFAC, but has to strike a balance.

"We do believe that we have struck the right balance here between supporting households, supporting businesses, protecting living standards and protecting the real value of public services, while at the same time not stoking inflation at a time when it is falling," the minister said.

"When you look at this in the round from the beginning of last year, at the end of next year, we are projecting that we will have a budget surplus of around €30bn, we can be reasonably confident that that will be achieved. The farther into the future you go in terms of projections, the less certain they are."

He commented that IFAC supports a policy of setting up a long-term savings fund to meet known future costs, and argued that even when you strip away all of the windfall corporation tax receipts, the Government is still running a balanced budget, as reflected in the Summer Economic Statement.