The Minister for Public Expenditure and Reform has said that while the Government welcomes the dramatic reduction in the country's projected deficit, a lot of uncertainty remains.
Michael McGrath said the Government is focused on reducing the national debt as it finalises next year's budget.
Speaking on RTÉ's The Week in Politics, he said the €7 billion improvement projected in the deficit suggests that the economy has rebounded strongly due to the extent of pandemic support the Government has provided to households and to different sectors of the economy.
Mr McGrath said there is "a lot of uncertainty...and the easiest thing to do [would be for the Finance Minister] to go on a splurge and spend the improved deficit outturn".
He added "but it is still a deficit of over €13 billion and if we can reduce it faster and add less money to national debt that is not a bad thing for our children and for future generations."
A record amount of corporation tax and an underspend by some government departments will deliver a much lower deficit in the public finances than forecast.
A general Government deficit for this year of €13.2 billion is set out in the White Paper published on Friday night by the Department of Finance.
Minister McGrath said he is really satisfied the overall package of €4.7bn will allow "for really significant progress in housing, healthcare childcare, in tackling climate action and the very real cost of living pressures that people are addressing at this time".
He said the Budget will be progressive and will seek to improve living standards and is focused overall on working towards both economic and social recovery.
He said the Government wants to make progress on services including disability care, mental health and in other areas that came under significant pressure during the pandemic, and is also conscious of the impact of rising energy prices on people's lives.
Despite this, he said, carbon taxes will proceed as planned, although the impact on home heating oil and solid fuel prices will not take effect until next May.
He said the hope is that the Government will have "a very comprehensive package to support people to get through what we hope is a temporary period of escalating [energy] prices".
Minister McGrath said that the reform and strengthening of the health service, which took place during the Covid-19 pandemic, was as a result of a "step change in investment" designed to dramatically increase the capacity in community care and acute beds and critical care.
He said the Government sanctioned an increase in 16,000 healthcare professionals during this time and wants to see the continued implementation and delivery of that while also dealing with Covid-19.
