The Finance Minister Michael Noonan says tax cuts and spending increases on services are possible in every budget between now and 2020.
But in the coalition Spring Statement to the Dáil, Mr Noonan has warned this is only possible if the right policies are followed.
And he says those of the opposition are not the right ones.
He says he has agreed relaxed spending rules with the European Commission - meaning there will be at least €1.2bn and up to €1.5bn available for the next budget.
- "Any rowing back on reform measures...will cost jobs, reduce growth rates and people's living standards"
- Forcecast that Ireland will pass two million people employment mark next year
- Inward migration set to return from 2017
- Ireland has reached the end of austirety budgets "much earlier than planned"
- Government will be in a position for its second expansionary budget in October
Mr Noonan has told the Dáil that we cannot return to the boom and bust model - but he says with Fine Gael and Labour, there is room to improve living standards with more money in their pockets and better public services.
The Public Expenditure Minister Brendan Howlin says he plans to focus increases in spending in health, education and infrastructure.
Mr Howlin says he will publish a new capital plan in June.
He has also secured Cabinet approval to enter talks with public sector unions, to begin reversing the pay and pension cuts.
- "The economic crash has taught us that nobody owes Ireland a living"
- Look to increase current expenditure by an additional €600 to €750m
- 'We need to ensure remuneration and cost of Public Service more generally are managed to ensure that they remain sustainable'
- New EU fiscal rules "will serve as a tool" to help Ireland to responsibly manage the recovery
But Mr Howlin has again warned that public sector workers will not get it all back in one go.
